Financial reporting issues
Professor Claudio Romano
6 points * 39 hours per semester * First, second, summer semester * Caulfield, Sydney, Singapore, Hong Kong (not offered in all locations in all semesters)
Objectives On completion of this subject students should have developed an understanding of which the traditional role of financial accounting which will provide the basis for understanding the nature of the financial reporting revolution and will express concern that the historical and current methodological developments relating to financial accounting are inadequate; the implications of the notion that the purpose of financial statements is to provide useful information; by examining the relationship between prices and earnings based on interaction between the nature and equilibrium between process reducing prices and the information system reducing earnings; the major research perspectives that have merged in financial reporting relating to the exact content of financial information; by focusing on the potential usefulness of accounting information; the structures available that influence financial reporting in a regulated environment; by reviewing the basic elements of a methodological theory of the standard-setting process for financial accounting and reporting.
Synopsis The aim of this course is to ascertain the extent to which existing accounting theories do in fact provide a basis for determining the content of external financial reports and resolving accounting controversies; the subject is not designed as one in which highly structured methods and rules are applied to various topics in order to find one `correct' solution or answer for problems or issues. Rather, it is more a possibilities quest, in which various controversial conceptual and practical issues will be reviewed and analysed, with due recognition to the reality of alternative value judgements. Given the history of recent developments in the profession and business practices, no other approach is considered feasible or warranted. Specifically the subject will provide students with the opportunity to further develop skills of analysis, evaluation and synthesis in the areas of financial accounting and reporting and, in the process create an awareness of some current developments in accounting regulation.
Assessment Assignment (8000 words): 35% * Oral: 15% * Final examination (3 hours): 50%
Prescribed texts
Watts R L and Zimmerman J L Positive accounting theory Prentice-Hall, 1986