Faculty of Management
Accounting Theory
MGT4160Y– Spring 2017
Mondays, 18:00 – 20:50| ROOM: N616
INSTRUCTOR
OFFICE HOURS
Yutao Li, PhD.
[email protected]
Phone 403-571-3360 ext. 2129
Mondays, 16:30 – 17:45 or appointment arranged by email
COURSE MATERIALS
1. Scott, W.R. 2015. Financial Accounting Theory, 7th Edition. Pearson Prentice Hall: Toronto.
ISBN-13: 9780132984669 (Order from Bookstore.uleth.ca)
2. Library and Web Resources: Knotia: (Go the www.uleth.ca/lib/ -> Resources tab (at top) > Databases by
Subject > Management – Accounting/Finance > Knotia.ca > CPA Canada Standards and Guidance Collection
(CPACHB) > the plus sign beside Accounting (from the left hand side list). Then select (depending on what
you are looking for):
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The plus sign beside either Part I “International Financial Reporting Standards” and then "2014 edition"
to see the table of contents for 2014 IFRS, which is now Canadian GAAP for publicly accountable
enterprises, or
Part II "Accounting Standards for Private Enterprises" or
The Conceptual Framework for Financial Reporting – not part of the standards, but provided by the
IASC for use by managers and accountants where there is no IFRS, and as a basis for harmonizing new
and existing standards. The Framework is included as one of the items under the "2014 Edition"
heading in Part I of the Financial Accounting Handbook, which is the IFRS section.
You may find the discussion under "impact" within the "Financial Reporting in Canada under IFRS
2013 (FRICIFRS) also helpful and interesting - this is also available under Knotia.
SEDAR: www.sedar.com/homepage_en.htm . This is the official website for publicly listed companies in
Canada to provide required and voluntary filings, including annual reports, proxy state
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RECOMMENDED MATERIALS
Your participation in class discussion and understanding of course material will be markedly improved by
keeping up on current business events and issues. This can be easily done by spending a few minutes reading
business sections of newspapers such as The Globe and Mail or the Financial Post; and/or other sources such as
the Wall Street Journal, CFO, BusinessWeek, and The Economist. All of these other than the Wall Street
Journal can be accessed either in whole or in part for free through their websites; The Wall Street Journal can be
accessed for free via ABI-Inform, included as one of the Accounting/Finance databases on the Library Website.
PREREQUISITES/ CO-REQUISITES/EQUIVALENTS
- Pre-requisites: MGT 3100 and one of either WRIT 1000 or a university-level English course (3.0 credit
hours). Note: All pre-requisite courses must have a minimum “C-“ grade
- Co-requisites: ECON 3030, MGT 3101, and MGT 3160
COURSE DESCRIPTION
The study of theoretical constructs such as efficient markets, agency and economic consequences which impact
the preparation and use of accounting information. Focus is on applying the theories to understand and analyze
current issues in accounting practice. The course is designed to provide students with the opportunity to
exercise and improve skills in critical thinking, persuasive writing and oral communication.
COURSE LEARNING OBJECTIVES
This course is intended to improve your understanding of why accounting “looks” the way it does, so that you
can better understand the forces shaping the evolution of accounting, as well as the ways in which accounting
may be both helpful and misleading to investors and/or manipulated by managers. Unlike many accounting
courses, this course will emphasize “why” rather than “how”.
Some specific course objectives include:
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To help you better understand what characteristics are believed to make accounting information useful to
investors, and the assumptions underlying these beliefs;
To examine how alternative accounting measurement bases differentially affect accounting information
characteristics;
To consider the implications of market efficiency (or lack of efficiency) for the role of accounting
information in markets and the informativeness of market prices
To familiarize you with some current controversies about accounting standards;
To better understand the financial reporting regulatory framework in Canada;
To better understand International Financial Reporting Standards (IFRS);
To extend your ability to find, evaluate, and present evidence related to accounting issues, particularly
evidence from accounting research; and
To further develop your skills in team building, persuasive writing, reasoning, and oral and written
communication.
INSTRUCTIONAL AND LEARNING METHODS
This senior level course focuses on incubating a culture of self-learning. The instructor is a facilitator who
encourages students to engage in the process of self-learning. While I use lectures from time to time to illustrate
some financial accounting theories, issues and applications, self-reading, class discussion, group presentations
and assignments will be the key modes of learning for you. The most effective learning takes place through a
process of self-discovery via personal reading, interactions with peers and the instructor both in and after class,
and preparation for the group presentation and project. What you gain from this course depends very much on
YOU. Your own preparation and the effort you exert will determine how much you learn from this course.
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COURSE GRADE
Components of your course grade, and their respective weights are as follows, with additional details provided
below.
Class Participation/Prep. (Group and Individual)
15% - Ongoing
Debate (Group and Individual)
Guidelines”
15% - See “Debate” section below and “Debate
Assignments (Group)
15% - See “Group Assignments” section below
Midterm (Individual)
20% - Feb 13
Final exam (Individual; Comprehensive)
35% - Tues, Apr 18
Total
100%
Debate (15%): Two groups will sign up for and debate a particular topic in class on the date shown in the
schedule. Each individual in a group will prepare at least one argument for their group's side of the debate,
while the team as a whole will be responsible for other debate components, including discussion of relevant
standards and regulations, coordination of individual arguments, and A/V aids.
A summary of each team's arguments and audio-visual aids must be submitted in advance of the debate. I
strongly encourage you to come talk to me prior to finalizing your arguments to get some feedback. I may also
be able to help locate relevant evidence if you are having problems. The type and amount of help I provide will
in part depend on your own efforts before coming to see me.
Details on what is required, the details of how and when to submit related documents, the debate structure, and
the debate evaluation form are provided via the course website in the Debate Guidelines document. Please
make sure you consult this before preparing your debate material so that you are clear on what is expected
of you and when to provide the related materials. Also remember I have provided a reading list with a few
articles for each debate to help you get started – check the website for debate resources.
Class participation and preparation (15%): Class participation and preparation is an integral part of this
course. You are expected to have read the required readings in order to actively participate in class discussion.
Each student bears the responsibility of contributing to the understanding of the topics being studied. Class
participation provides you an opportunity to develop skills in oral communication, presenting your point of
view, helping your colleagues to learn, and learning from your colleagues. These skills are as valuable as the
accounting techniques you will learn from the course. It is important to note that failure to participate can have
a significant negative impact on your final grade of the course. Merely attending the class is not sufficient.
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Three (3) of your marks will be based on your group's in-class comments related to the debates (other
than the one in which you are on a debate team), including comments related to questions I may pose.
Each non-debating group will develop comments and questions on each debate. Each group will provide
a written summary of the questions and comments they made before leaving the class; you must be
present for the entire debate to be eligible for the corresponding participation marks. Marks will be
provided based on the insightfulness of the questions and comments, the degree to which they reflect
advance preparation for the debate (such as by reviewing the readings prior to the debate), and analysis
of the debating teams' logic and evidence. Explicitly note in your questions and comments if you are
drawing on readings by noting the author you are referring to.
Twelve (12) of your participation marks will be awarded based on active and thoughtful involvement in
discussions other than for your group’s in-class comments noted above (I refer to this as "free-form
participation"). You earn the 12 % of “free-form participation” mark if you speak thoughtfully at least
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in 8 classes. For example, if you speak thoughtfully in 6 classes, you “free-form participation” mark will
be 9% (6/8 * 12% = 9%).
Negative contributions showing lack of preparation will lower the participation grade.
Please note that both thoughtful questions and comments count as active participation. Note that
questions and comments related to things other than course topics do not count, for example questions
on the structure or coverage of exams. Simply asking for answers for assigned questions also does not
count.
To be eligible for marks for participation, you must submit a slip of paper with your name and a brief
summary of your comments before you (or I) leave the class in question.
You will not receive participation marks for just attending class.
Group Assignments (15%): There will be four equal weighted assignments over the term, which will help you
learn course concepts and refine your research skills, as well as how to answer questions better. These
assignments will be based on chapter material or will ask you to use press releases or company information to
answer some questions. Some research may be required. The due dates for the assignments will be noted on the
assignment, and will be typically roughly one week after the assignment is given out. Assignments will be
assessed on writing quality - I expect good quality spelling, grammar, and sentence structure. Marks may be
reduced by up to 10% for writing problems.
You are free to consult the instructor in developing your answers, but should not consult other groups or sources
other than your textbook, Knotia, or resources provided by the instructor for the term, unless directed to do so.
Each group's worst assignment mark will be dropped. Groups should include only the names of those students
who participated in developing the answers for the assignment. Any incidents of cheating or plagiarism will
result in a 0 on the assignment, and this 0 will be counted as part of your fully marked assignments (i.e. it
cannot be half weighted). This 0 will be given to all group members whose name was on the assignment, unless
one group member takes responsibility and the others can convincingly claim they had no knowledge of the
plagiarism.
Mid-term (20%) and Final Exam (35%): Students will primarily be asked to apply what has been discussed or
presented in class or in the assigned readings to various scenarios and situations, including articles from the
business press. Practice on the assigned problems and any practice problems provided, as well as attention to
class discussion should enable you to be prepared for most exam questions. The final exam is comprehensive. If
your performance on the final exam is better than your performance on the midterm or for some reasons you
miss the mid-term exam, the weight of the mid-term exam will be transferred to the final exam automatically.
However, I strongly encourage everyone to write the mid-term exam as the course material after the mid-term
exam tends to be more challenging than that before the mid-term.
Note that you should not make travel plans on the final exam date. See “Course Policies” section, point 3.
Appeal of Marks for Any Coursework: You can appeal the mark for any coursework I evaluate other than the
final exam if I receive your appeal in writing within 7 working days of me making the mark or evaluation
available. Your appeal must include a written explanation of what you want remarked and why. I will remark
any appealed item in its entirety and correct all marking errors that I find. As a result, your mark may go up,
down, or remain unchanged. Note that you can only appeal the way any marking key was applied, not the
marking key itself.
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Group Work Peer Evaluation: At term end, groups can request a peer evaluation of the contribution of the
other members of his/her group to the work done by the group. Differential weighting of group members’ effort
will usually be applied only if two or more of a group’s members request it. However, in exceptional cases
where one group member requests differential weighting and provides compelling evidence (as discussed
below) that a group differential should be applied I will consider it.
If differential weighting is performed, each individual’s mark for group work will typically be weighted by the
group’s assessment of his/her contribution to that work. However, the final determination of the weight used
will be at my sole discretion.
All requests for differential weighting should be accompanied by supporting evidence. In particular, I will be
looking for written documentation that group member goals and deadlines were set by consensus, that you
discussed concerns with group members about their failure to meet goals and deadlines as soon as possible, and
that you gave members an opportunity to address any concerns. E-mail works well in providing such
documentation. If you have not given other group members fair warning of concerns prior to requesting
differential weighting, I will apply less of a differential than requested.
LATE ASSIGNMENTS
You must present evidence of illness or emergency affecting 3 or more days of the week before a particular
assignment is due to have a valid reason for not participating in developing solutions for a particular
assignment. If you provide valid documentation of this, the weight will be evenly distributed among the other
assignments.
All other issues related to late submissions or items not submitted will be dealt with on a case-by-case basis.
GRADING SCHEME
Percent Mark
95-100
86-89
78-81
70-73
62-65
50-57
Letter Grade
A+
AB
C+
CD
Percent Mark
90-94
82-85
74-77
66-69
58-61
0-49
Letter Grade
A
B+
BC
D+
F
COURSE POLICIES
1. Prerequisites. It is the responsibility of students to check the prerequisites for courses before registration.
If students are found to be registered in a course for which they do not have the prerequisites and they have
not received prior permission from the appropriate program chair, they can be de-registered. If this occurs
after the drop/add date, tuition will not be refunded.
2. Midterm Examination: If your performance on the final exam is better than your performance on the
midterm or for some reasons you miss the mid-term exam, the weight of the mid-term exam will be
transferred to the final exam automatically.
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3. Final Examinations. Students who are unable to write a Registrar-scheduled final exam due to extenuating
circumstances or for other reasons beyond their control, must: (1) complete a Special Final Examination
Request Form (2) enclose evidentiary support of legitimate absence (e.g. doctor’s note for severe illness),
and (3) submit all compiled documentation to their respective Academic Advisor for review. The final
decision for the student’s Special Final Examination Request will be made at the Dean’s level. Requesting
an alternate final examination time for personal reasons (e.g. work commitments, holidays, traffic, the
purchase of a non-refundable airline tickets etc.) is not a legitimate reason for missing a final exam.
4. Conduct of Examinations: The instructor may articulate regulations for late entry to and early exit from
the examination room. Instructors may also prescribe or restrict materials that may be used during the exam.
No material aids including such items as: mobile phones, computers, or other digital devices, may be
brought into the examination site without prior approval from the instructor. Please see additional
examination
policies
in
the
2016/2017
University
Calendar
page
82-83
(www.uleth.ca/ross/sites/ross/files/imported/academic-calendar/2016-17/part04.pdf).
5. Student Conduct: The University’s policies are described in the calendar and all students are expected to
read, familiarize, and comply with them. Special care should be taken to understand the Student Discipline
Policy for academic and non-academic offenses as listed in part 4, sections 4 through 8 of the 2016/2017
Academic Calendar (www.uleth.ca/ross/sites/ross/files/imported/academic-calendar/2016-17/part04.pdf).
Students will respect the basic standards of intellectual integrity, including, but not limited to, refraining
from plagiarism, cheating or duplicating someone else’s work. In addition, students are expected to take an
active role in encouraging other members of the academic community to refrain from academic dishonesty,
and are asked to advise the instructor if they are aware of any such violations. This provision applies to any
work submitted as a group project.
6. Academic Dishonesty and Plagiarism: Academic Dishonesty and Plagiarism will not be tolerated and will
automatically result in a zero grade for the submission. Any student caught plagiarizing may also be subject
to additional University sanctions. The University of Lethbridge subscribes to an electronic plagiarism
detection service. Students may be required to submit their written work in electronic form for plagiarism
checking.
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Tentative Class Schedule (Note that you should omit reading any sections except for
sections 7.5.4 and 7.6 within a chapter that are marked as “can be skipped” with an
asterisk, i.e.. section 4.5.2; 6.4; 6.5;6.10; 8.10.3; 9.3.2; 9.3.4; 12.8.2; 12.9.3; 13.6)
Below is a tentative outline. Recognizing that teaching excellence requires a degree of
flexibility and responsiveness to both students' needs and emergent circumstances,
adjustments to the course outline may sometimes be necessary, provided that no student
is disadvantaged by the change.
Day
Advance Reading and Class Activities
Jan. 9
Hand out course syllabus;
Discuss course objectives and requirements;
Ch. 1: Introduction to Accounting Theory
Ch. 2: Accounting Under Ideal Conditions
Jan. 16
Ch. 2: Accounting Under Ideal Conditions
Ch. 3: The Decision Usefulness Approach to Financial Accounting
Group Formation Confirmed by Email by 9:00 PM today;
Debate Topic Sign-up Starts at 11:00 pm today
Group Assignment 1 handed out (Accounting under Ideal Conditions)
Ch. 4: Efficient Securities Markets
Ch. 5: The Value Relevance of Accounting Information
Group Assignment 2 Handed Out – covers any topics from Chapters 3-5
(outside class)
Debate Topic Sign-up closes at 11:00 pm today;
Ch. 5: The Value Relevance of Accounting Information
Jan. 23
Jan. 30
Feb. 6
Feb. 13
Feb 20
Ch. 6: The Measurement Approach to Decision Usefulness
(Omit Section 6.10 - all parts)
Ch. 7: Measurement Applications
Mid-term Exam (chapters 1 - 6)
Consultation session for group debate
Family day: No class
Feb. 27
Ch. 7: Measurement Applications
Ch. 8: The Efficient Contracting Approach to Decision Usefulness
Mar. 6
Debate 1: Accounting standard-setters should continue to assume that
securities markets are semi-strong efficient
Debate 2: Fair-value accounting contributed to the 2007- 2008 financial crisis
Ch. 8: The Efficient Contracting Approach to Decision Usefulness
Ch. 9: An Analysis of Conflict
Group Assignment 3 Handed Out (outside class) – Covers any topics from
Chapters 7-9
Mar. 13
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Mar. 20
Debate 3: The Adoption of IFRS has generally been beneficial for users of
accounting information
Ch. 10: Executive Compensation
Mar. 27
Ch. 11: Earnings Management
Ch. 12: Standard Setting: Economic Issues
Group Assignment 4 handed out – Covers any topics from Chapters 10-12
Ch. 12: Standard Setting: Economic Issues
Ch. 13: Standard Setting: Political Issues
Assignment 4 due at 11:59 pm on April 9 by email
Apr. 3
Tues, Apr. 18 Final Exam
Note: Other readings may be added in various weeks to reflect current issues in accounting
theory.
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