Accounting 425

Accounting Theory

PREREQUISITE: ACC 302 with a minimum grade of "C"

COURSE OBJECTIVES:

The primary purpose of this course is to help you to acquire a more professional understanding of generally accepted accounting principles (GAAP) covered in previous accounting courses, particularly Accounting 301 and 302, as well as the contemporary problems encountered by the accounting profession in formulating these principles.

Specifically, we hope to accomplish these objectives:

(1) to know the existing GAAP used by the profession and to understand the reasoning behind them;

(2) to understand the development of accounting theory and the search for accounting principles by the accounting profession;

(3) to understand the significance of the conceptual framework project of the FASB and how it can be used to solve accounting problems;

(4) to understand the social and political ramifications of standard-setting;

(5) to understand the accountant's position in society from an historical, professional, ethical and legal perspective.

(6) to assess your written communications and critical thinking skills. Students will be considered to be competent in written communications skills when they:

1. identify and state a purpose for writing,

2. organize and express information and ideas in a manner appropriate to the purpose,

3. use coherent, clear, and concise sentence and paragraph structure,

4. use a style appropriate to the purpose, and

5. use correct grammar, punctuation, spelling and capitalization.

REQUIRED TEXTS:

1. The Wall Street Journal

2. FASB Accounting Standards--Original Pronouncements, Volume I, II and III (2006/2007 edition).

READING LIST

ACC 425

History:

1. "Development of Accounting Standards," JOA Centennial Issue, May, 1987, p.110.

2. "Establishing Financial Accounting Standards." (My Office)

3. "Pacioli Revisted," JOA Centennial Issue, p. 195.

4. "Trueblood Committee," JOA Centennial Issue, p. 101.

5. "Wheat Committee," JOA Centennial Issue, p. 134.

6. "Cohen Commission," JOA Centennial Issue, p. 259.

7. "Public Oversight Board," JOA Centennial Issue, p. 43.

8. "GASB," JOA Centennial Issue, p. 218.

9. "Anderson Committee," JOA Centennial Issue, p. 77.

10. "Treadway Commission," JOA Centennial Issue, p. 336.

11. “A Perspective on the Public/Private Approach," Accounting Horizons, Mar 95, pp.52-67.

SEC:

12. "The SEC and the Profession, l934-1984..," JOA, July l984, p. 68.

13. SEC, Chapter 15 and misc. pages through 119 (My Office)

Self-Regulation:

14. "The AICPA Division for Firms," JOA, August l984, p.98.

15. N/A

16. (read numbers 6, 7, 9 and 10 again)

17. N/A

Search for Accounting Principles:

18. "Some Thoughts on Substantial Authoritative Support," JOA, April 1969, p. 44.

19. "Politics of Establishing Accounting Standards," JOA, February 1977, p. 76.

20. SEC, misc pages 141-148. Also read #12 again.

Conceptual Framework:

21. Extract from SEC Chairman Levitt’s 1999 Speech, JOA, December, 1998, p.12.

22. "Myths and Realities," JOA, March 1985, p. 62.

23. "An Evaluation by Solomon," JOA, June 1986, p. 114.

Pronouncements:

24. (FAS 19) "Oil and Gas: A Compromise Method," JOA, June 1985, p. 116.

25. (FAS 87) "Accounting for Pensions," JOA, April 1986, p. 53.

26. (FAS 89) "Let's Stop Eating Our Seed Corn," Harvard Business Review, January l981, p. 128.

27. (FAS 52) "Wake-Up Call...I.A.S. are on the Way," JOA, July 1993, p.80.

Ethics and Legal Responsibilities of the Accountant:

28. "Legal Responsibility."

29. SEC, misc pages 120-133.