WITH CONTRIBUTIONS FROM G E O F F F R O S T. m» ' Will

Transcription

1 JAYNE ALLAN SCOTT G O D F R E Y H O D G S O N H O L M E S ANN TARCA WITH CONTRIBUTIONS FROM G E O F F F R O S T m» ' Will

2 BRIEF CONTENTS Preface x Acknowledgements xii Part 1 Accounting theory I 1. Introduction 3 2. Theory and method Accounting theory construction Measurement theory 68 Part 2 Alternative models of accounting Adopting an accounting perspective Historical cost Current cost accounting Exit price accounting 224 Part 3 Empirical research in accounting Positive theory and capital market research A positive theory of accounting discretion 298 I I. Behavioural research in accounting 341 Part 4 Accounting regulation and specific issues Standard setting in a political environment The conceptual framework Assets, liabilities and owners' equity Measurement of assets and liabilities Profit Revenue and recognition Expense and matching Social and environmental reporting 630 Glossary 665 Index 673 Brief contents

3 CONTENTS Preface x Acknowledgements xii Part I Accounting theory 1. Introduction 3 Overview of accounting theory 4 Content outline 13 Additional readings 15 Endnotes Theory and method 16 Imposing order 17 A range of accounting theories 18 Theory formulation Testing a theory 29 Summary 40 Questions 41 Additional readings 43 Endnotes Accounting theory construction 47 Pragmatic theories 48 Syntactic and semantic theories 49 Normative theories 52 Positive theories Different perspectives 56 Scientific approach applied to accounting 59 Summary 61 Questions 63 Additional readings 64 Endnotes Measurement theory 68 What is measurement? 69 Scales 69 Permissible operations of scales 71 Types of measurement 73 Reliability and accuracy Measurement in accounting 78 Summary 84 Questions 85 Additional readings 85 Endnotes 90 Part 2 Alternative models of accounting Adopting an accounting perspective 93 Accounting viewpoints 94 I The boundary assumptions 95 Proprietary theory 99 Entity theory 102 Physical capital concept 108 Fund theory/cash flows 109 Commander theory 113 Investor theory 114 Enterprise theory 114 The reporting entity concept 118 Summary 121 Questions 124 Additional readings 126 Endnotes 129 Historical cost 131 Basic concepts 132 Defence of historical cost 139 How objective is historical cost? 149 Criticisms of historical cost accounting 155 Summary 162 Questions 164 Problems 165 Additional readings 168 Endnotes 171 Current cost accounting 174 Rationale for current cost accounting 175 Financial capital versus physical capital 178 Current cost a global perspective 186 Criticisms of current cost 189 In support of current cost 190 Summary 200 Appendix 7.1: Edwards and Bell system 202 Questions 216 Problems 216 Additional readings 220 Endnotes 222 Exit price accounting 224 In support of exit price accounting 225 Criticisms of exit price accounting 232 A mixed measurement system and international standards 238 Summary 239 Appendix 8.1: An example o/cce 241 Questions 246 Problems 246 Additional readings 248 Endnotes 253

4 Part 3 Empirical research in accounting Positive theory and capital market research 257 Philosophy of positive accounting theory 258 Strengths of positive theory over normative theory 259 Scope of positive accounting theory 261 Capital market research and the efficient markets hypothesis 261 Impact of accounting profits announcements on share prices 266 Association studies and earnings response coefficients 272 Trading strategies 283 Mechanistic or behavioural effect 286 Summary 290 Questions 292 Additional readings 292 Endnotes A positive theory of accounting discretion 298 Background: early demand for theory 299 Contracting theory 300 Agency theory 301 Ex post opportunism versus ex ante efficient contracting 313 Information perspective and signalling 315 Political processes 317 Empirical tests 320 Evaluation of the theory 328 Summary 331 Questions 333 Additional readings 334 Endnotes Behavioural research in accounting 341 Behavioural accounting research: definition and scope 342 An overview of approaches to understanding information processing 345 Lens model studies the evidence 350 Process tracing studies the evidence 353 Format and presentation of financial statements 353 Probabilistic judgement studies the evidence 355 Accounting and behaviour 360 Limitations of BAR 361 Summary 362 Questions 363 Additional readings 364 Endnotes 366 Part 4 Account regulation and specific issues Standard setting in a political environment 371 Development of the Australian standard-setting process 372 Adoption of international accounting standards in Australia 375 Regulation debate in Australia 383 Standard-setting approaches 394 Summary 399 Questions 400 Additional readings 401 Websites 402 Endnotes The conceptual framework 411 What is a conceptual framework? 412 Why have a conceptual framework? 413 Objectives of conceptual frameworks 416 A new conceptual framework project for the IASB and FASB 426 A critique of conceptual framework projects 428 Summary 43 7 Questions 439 Additional readings 440 Endnotes Assets, liabilities and owners' equity 448 Assets 449 Liabilities 458 Owners' equity 466 Accounting for specific financing arrangements 471 Summary 472 Questions 474 Problems 476 Additional readings 479 Endnotes 483 Vlll

5 15. Measurement of assets and liabilities 484 Why does it matter how we measure assets and liabilities? 485 What do we measure? 486 Approximations of true value 492 Measurement concepts: guidance from standard setters 498 Summary 502 Questions 503 Problems 505 Additional readings 507 Endnotes Profit 513 What is profit? 514 Business profit 514 Profit under uncertainty 520 Evidence on usefulness of price level adjusted data 537 Summary 540 Appendix 16.1: Calculation of profit 542 Questions 553 Problems 555 Additional readings 558 Endnotes Revenue and recognition 562 Nature of revenue 563 Recognition of revenue 565 Guidance from standard setters 573 Revenue recognition and measurement standard setters' current activities 579 Summary 584 Questions 585 Problems 586 Additional readings 591 Endnotes Expense and matching 598 Nature of expense 599 Recognition criteria and matching 603 Criticisms of matching 610 Summary 615 Questions 616 Problems 618 Additional readings 620 Endnotes Social and environmental reporting 630 What is social and environmental reporting? 631 What motivates corporate social responsibility? 634 A theoretical framework for corporate social responsibility 637 Social and environmental reporting 640 Accounting and reporting issues 649 Summary 656 Questions 656 Additional readings 658 Endnotes 662 Glossary 665 Index 673