Course Outline ACCO 440 PDF

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Course Outline ACCO 400 Course Outline ACCO 400...

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Accounting Theory Accounting in Society

Course Outline Fall 2021 ACCO 400, section C Department of Accountancy John Molson School of Business Concordia University

General Information Class Times: Lectures -- Asynchronous, online delivery of through Moodle

Discussion meetings – Remote, on Zoom, Tuesdays 15:00 – 16:15 Alternatively, Remote, on Zoom, Tuesdays 20:00 – 21:15 (All times referred to in this course outline are Montreal Time - ET) Instructor:

Charles Draimin, PhD

Email:

[email protected] Please ensure that any email sent to me has ACCO400 Section C in the subject line. Otherwise, my response may be delayed.

Office hours: Person-to-person meeting by appointment on Zoom. Territorial acknowledgement: I would like to begin by acknowledging that Concordia University is located on unceded Indigenous lands. The Kanien’kehá:ka Nation is recognized as the custodians of the lands and waters on which we gather today.

Course Description This course examines the theoretical foundations of the contemporary approach to financial reporting, and the political and pragmatic considerations in the development of the conceptual framework underlying current accounting standards. Alternative theories of accounting are discussed and controversial areas are emphasized. Prerequisite: ACCO 320

Objectives Accounting is beyond mere bookkeeping. Accounting numbers are socially constructed. All stakeholders have their own interests and incentives which will influence the construction of the accounting numbers. Hence, one needs a critical mindset when preparing and using accounting numbers. The primary goal of this course is to advance your understanding of the development of accounting, by exposing you to new topics and their impact on accounting and accountants. The aim is to develop your ability to analyze financial reporting practices critically. One technique we will use emphasizes the importance of underlying assumptions in evaluating a theory: for example, we take in turn the perspective of the various stakeholders of the accounting world: the preparers (managers), the users (shareholders, investors, debtholders), the regulators (standard-setters), and the government (the public interest). An understanding of the social construction of accounting numbers, as well as of the importance of ethical and responsible behaviour of accountants are the main guiding principles for all topics discussed. By the end of this course, you should have gained an understanding of the different theories we have studied. More importantly, you will have learned to think in a conceptual way, to foster the ability to abstract from the particulars of the situation, and to be able to explain why financial accounting practices are the way they are in terms of underlying theories. Finally, you should be able to apply proper theories to critically analyze current issues being considered in contemporary accounting literature.

Instructional and Learning Methods This senior level course focuses on inculcating a culture of self-learning. The instructor is a facilitator who encourages students to engage in the process of self-learning. While I use asynchronous video lectures to illustrate some financial accounting theories and conceptual issues, your reading followed by discussion during synchronous class meetings will be the key modes of learning. The most effective learning takes place through a process of self-discovery through careful reading of the texts and interaction with peers and the instructor. Your own preparation and the effort you exert will determine how much you learn from this course.

Required Materials • • • •

Lecture slides with voice over and close caption: Yuja posted in advance on Moodle Readings (detailed in the schedule below): available in electronic version through Concordia Library reserves https://reserves.concordia.ca/ares/ Notes that students take during remote classes Additional material posted on Moodle

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Class Schedule Listed below are required readings that students need to read in preparation for each lecture. Readings are available through the Course reserves on the Concordia library website at https://reserves.concordia.ca/ares/. Week Week 1

Date Sep 7

Topic and required readings Introduction and History of Accounting Chapters 1, 3, and 4 of Chatfield, M. (1974) “A History of Accounting Thought” Hinsdale, Ill: The Dryden Press.

Week 2

Sep 14

Standard Setting and Political Issues Chapters 13.2, 13.5, 13.8 of Scott, W. R. & O’Brien, P. C. (2019) Financial Accounting Theory, 8 th edition.

Week 3

Sep 21

Investors and Shareholders Chapters 4.2, 4.3, 4.6, 4.7, 5.2, 6.1, 6.2.1, 6.2.2, 6.2.6, 6.3 of Scott, W. R. & O’Brien, P. C. (2019) Financial Accounting Theory, 8th Edition. Composition of groups (self selection).

Week 4

Sep 28

Creditors Chapters 8.2, 8.3, 8.4, 8.5 of Scott, W. R. & O’Brien, P. C. (2019) Financial Accounting Theory, 8th edition. O’Brien, P. C., and Scott, W. R. (2012) Contract theory, CPA Journal, April. Submit group project topic

Week 5

Oct 5

The Stewardship Role of Accounting Numbers O’Connell, V. (2007) Reflections on Stewardship Reporting, Accounting Horizons 21(2): 215-227. Pages 364–368 of Shivakumar, L. (2013) The Role of Financial Reporting in Debt Contracting and in Stewardship, Accounting and Business Research 43(4): 362-383. Pages 60–62 & 66–67 of Air Canada Notice of 2019 Annual & Special Meeting of Shareholders & Management Proxy Circular.

Week 6

Oct 12

Managers (1/2) – Earnings Management Chapters 11.1, 11.2, 11.3, 11.4 from Scott, W. R. & O’Brien, P. C. (2019) Financial Accounting Theory, 8th edition. Sections 1, 3, and 4 from Graham, J. R., Harvey, C. R., and Rajgopal, S. (2005) The economic implications of corporate financial reporting, Journal of Accounting and Economics 40, 3‒73. The professor posts questions for the midterm assignment on Moodle. The group project proposal is due via link on Moodle by Oct 12 at 12 noon

Week 7

Oct 19

Managers (2/2) – Corporate Disclosure Pages 1–4 of Cazier, R.A. & Pfeiffer, R.J. (2016) Why are 10-K Filings So Long? Accounting Horizons 30(1): 1–21. Blogpost: The Corrosive Effect of Offshore Financial Centers on Multinational Firms’ Disclosure Strategy, by Ben Amar W., He L., Li T., and Magnan M., October 9, 2018, https://sites.duke.edu/thefinregblog/2018/10/09/the-corrosive-effect-of-offshore-financial-centers-onmultinational-firms-disclosure-strategy The midterm assignment is due via link on Moodle by October 19 at 12 noon

Week 8

Oct 26

Hot Topics Session: TBA

Week 9

Nov 2

Corporate Governance Chapter 1 from Larcker, D., and Tayan, B. (2016) Corporate governance matters, Pearson Ed. Hot Topics written assignment is due via link on Moodle by Nov 2 at 12 noon

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Week 10

Nov 9

The Auditor Brewster, B. E., Butler, J. B., & Watkins, A. L. (2019) Eliminating biases that jeopardize audit quality, Journal of Accountancy. CPAB Audit Quality Insights Report: Annual Inspections Results 2018, http://www.cpabccrc.ca/Documents/News%20and%20Publications/2018%20Annual%20Inspections%20Report%20EN.pdf Selling, T. I. (2015) On the coexistence of professionalism and commercialism in CPA firms. The CPA Journal, May. Farrell, S. (2019) Watchdog finds work of Patisserie Valerie auditor unacceptable. The Guardian, July 10.

Week 11

Nov 16

Ethical Accounting Chapter 2 from Duska, R., Duska, B. S., Ragatz, J. (eds) (2011) Accounting Ethics, UK: West Sussex. Code of Ethics of CPA Quebec, http://legisquebec.gouv.qc.ca/en/ShowDoc/cr/C-48.1,%20r.%206

Week 12

Nov 23

International Dimensions Sections 1, 2, 3, 4, 10 from De George, E. T., Li, X., and Shivakumar, L. (2016) A review of the IFRS adoption literature, Review of Accounting Studies 21:898‒1004.

Week 13

Nov 30

Wrap up and Q&A The group project’s final report is due, via a dedicated link on Moodle by 12 noon Montreal time.

Course Evaluation The final grade for the course is based on the following components: A. Individual work 1. Midterm assignment (due Week 7) 2. Hot topics essay (due Week 9) 3. Final exam (date to be determined) B. Group project 1. Proposal (due Week 6) 2. 2. Full report (due Week 13) TOTAL

15% 15 40 10% 20

70%

30 100%

A. INDIVIDUAL WORK (70%) 1. One midterm assignment (15%), due Week 7 The professor will post on Moodle the assignment questions on the day of class in Week 6. Each student is to complete the assignment individually and to submit it via a dedicated link on Moodle by 12 noon Montreal time on the day of class in Week 7. Late submissions are penalized by 5% of the assignment grade for every hour late. No submission is accepted 24 hours after the deadline, at which point the grade will be zero. 2. One hot topics essay (15%), due Week 9 The essay is an individual reflection on the discussion in the Hot Topics session of Week 8. It will be no shorter than 450 words and no longer than 500 words. The essay is to be submitted via a dedicated link on Moodle by 12 noon Montreal time on the day of class in Week 9. Late submissions are penalized by 5% of the assignment grade for every hour late. No submission is accepted 24 hours after the deadline, at which point the grade will be zero.

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3. Final exam (40%), date to be determined The final examination is scheduled in the regular examination period. At a date to be announced later, the professor will post on Moodle the exam questions. The exam is to be completed individually and submitted via a dedicated link on Moodle by a date to be announced later. It will be open book inclusive of all material covered since Week 1 of the course (except for the Hot Topics session). The exam is common across all ACCO 400 sections. B. GROUP PROJECT (30%) The group project enables students to analyze a financial reporting issue of interest to them. Groups are self- selected and should be submitted on Moodle by Week 3 before class. Requests to change groups afterwards will not be entertained. Groups have no more and no less than 5 members. Each group chooses its topic; the only requirement for the topic is that it must be related to financial reporting and disclosure. By Week 4, each group must confirm its topic with the professor on Moodle. The group proposal is to be submitted via a dedicated link on Moodle by 12 pm Montreal time of the day of class in Week 6. The final report is to be submitted via a dedicated link on Moodle by 12 pm Montreal time of the day of class in Week 13. No submission is accepted 24 hours after the deadline, at which point the grade will be zero. To find a topic, students can read recent business press articles and blog posts (e.g., CFO.com, Wall Street Journal, Business Week, The Economist, Bloomberg.com, Matt Levine’s Money Stuff blog, John Hughes’s IFRS blog). Students can do a keyword search for a topic idea on Factiva (a database that covers primary public news sources and is available through the Concordia Library website). 1. Group project proposal (10%), due Week 6 The group proposal is to be submitted via a dedicated link on Moodle by 12 noon Montreal time of the day of class in Week 6. The proposal is an outline of the final report and includes its primary ingredients. The instructor will provide feedback on each proposal. The proposal’s grade depends on the extent to which it respects the following formatting and content requirements.

Formatting requirements (these also carry over to the final report): • •

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Display the topic, in the form of a question, on the title page. The proposal’s length should not exceed a title page plus three one-sided text pages plus any appendix pages (e.g., tables, graphs) and one page of references. Use Times New Roman font, 12point, 1.5 line spacing, 1-inch margin on all four sides, Letter-size paper. Organize the text into logical sections with headers. Use plain English and short sentences. Clearly define acronyms. Display page numbers at the bottom, centred. Do not use bullet points. Do a spell and grammar check before handing in the text. Do not directly quote from other articles or sources but paraphrase. Display the cited articles and sources in an alphabetized reference section. Do not cite Wikipedia pages. Citations and references should follow the APA style. Failure to provide proper references is plagiarism, a grave academic offence (see Concordia’s Code of Conduct below).

Content requirements: •

The introduction (1 page): The introduction provides an outline of the following: o What is the topic about? Be specific in defining the topic and describe what the project does. Give only the background information necessary for understanding the topic.

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Why is the topic important? Explain why anyone should care about the project. Think about users interested in the project and why they would care to know the answer(s) to the project question. o What is the main argument? Provide a succinct summary of the main arguments used for developing the answer(s) to the project question. The main argument (2 pages): The main argument provides the outline of the analysis. o Focus on the question. Include only elements in the main argument that address the question. o Present and explain the arguments. Show how the arguments relate to the question. Be neutral and consider all possible sides of an argument. Explain why the arguments make sense. o Use simple logic and common sense. o Do not regurgitate class material but apply it (e.g., to a new situation, accounting topic). Do not provide a conclusion: at the stage of the proposal, it is too early to conclude anything. o

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• • •

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2. The final report of your group project (20%), due Week 13 The final report is to be submitted via a dedicated link on Moodle by 12 pm Montreal time of the day of class in Week 13. The final report’s grade depends on how it respects the following formatting and content requirements. The final report’s formatting requirements are the same as those for the proposal, except for the length requirement: the final report in 14 (minimum) to 15 (maximum) pages of text. References, appendices, graphs, tables, figures should come at the end and do not count towards the 14 to 15 pages of text. In terms of content requirements: • The final report has to address the comments the professor provided on the proposal. • The final report fully develops the introduction and main argument. • The final report’s introduction includes a brief preview (one paragraph in length) of the answer(s) to the project question. • The final report includes a conclusion (about ½ page in length), which provides the answer(s) to the project question and tells the reader what to take away. The conclusion has to be objective and rely on what the main development has to say about the answer(s) to the project question. If the main development does not allow for a clear answer to the project question one way or another, this should be recognized in the conclusion. Late submissions are penalized by 5% per day of being late. This penalty applies to all members of the group without exception.

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Feedback and Grading At the end of the course, the instructor will submit a letter grade for every student registered. Using the grade point equivalents listed below, Grade Point Averages (GPA) are calculated for the evaluation of academic achievement, Honours standing, prizes, and academic standing. A student’s final grade will be determined based on their total marks earned. Numeric grade 90-100 85-89 80-84 77-79 73-76 70-72 67-69 63-66 60-62 57-59 53-56 50-52 0-49

Letter grade A+ A AB+ B BC+ C CD+ D DF, FNS

Grade points 4.30 4.00 3.70 3.30 3.00 2.70 2.30 2.00 1.70 1.30 1.00 0.70 0

Outstanding

Very good

Satisfactory

Marginal pass Poor-Failure

Note: D- is the minimum requirement to pass the course.

Behaviour All individuals participating in courses are expected to be professional and constructive throughout the course, including in their communications. Concordia students are subject to the Code of Rights and Responsibilities of Concordia University, which applies when they are physically and virtually engaged in any University activity, including classes, seminars, meetings. Students engaged in University activities must respect this Code when interacting with any Concordia community members, including faculty, staff, and students, whether such interactions are verbal or in writing, face-to-face or online/virtual. Failing to comply with the Code may result in charges and sanctions outlined in the Code. The most common offence under the Academic Code of Conduct is plagiarism, defined as “the presentation of the work of another person as one’s own or without proper acknowledgement,” including the following: (i) material copied word for word from books, journals, Internet sites, professors’ course notes; (ii) paraphrased material that closely resembles the source; (iii) the work of a fellow student, an answer on a quiz, data for a lab report, a paper or assignment completed by another student; (iv) a paper purchased from any source; and (v) a translation into a different language of another person’s work without citing the source. Plagiarism is not limited to words alone; it can refer to copying images, graphs, tables, ideas, oral presentations, computer assignments, and artistic works. The following are student responsibilities: • Consistently do the required work for each lecture (e.g., readings, videos) • Actively participate in remote synchronous classes, ensuring that their full name appears on the screen. If students wish to keep their video off, they should add a recent photo or avatar to their profile.

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Consistently work on the group project; immediately, openly, and respectfully address any disagreements with teammates (working through disagreements is a necessary part of learning to work in a team). Comply with the Code of rights and responsibilities and the Code of conduct. Write examinations without using unauthorized material.

If students take a religious holiday during the term, they should advise the professor early on to coordinate course requirements. Accessibility and Support Services The It is the responsibility of the course instructor to create a fertile learning environment that is as accessible and inclusive as possible. Students with accessibility needs requiring academic accommodations should contact an advisor from the Access Centre for Students with Disabilities (ACSD) to set up an accommodation plan. Concordia University offers many support services to students free of charge. The linked web page is a good facility that guides students to a specific support service that can provide appropriate assistance. Sexual violence, including sexual harassment and assault, is not tolerated at Concordia. Students should review Concordia’s policy on sexual violence to learn about awareness, prevention, support for survivors/victims, responding to disclosures, and reports and complaints. They can contact the Sexual Assault Resource Centre for information and support at [email protected] or 514 848-2424 x 3353.

Intellectual Property (IP) Content belonging to instructors shared in online courses, including, but not limited to, online lectures, course notes, and video recordings of classes remain the intellectual property of the faculty member. It may not be distributed, published or broadcast, in whole or in part, without t...