Financial Accounting Theory_OS 2014-2015 1

SYLLABUS
[ACCT 11401] FINANCIAL ACCOUNTING THEORY
Odd Semester 2014/2015
Credit: 3
Prerequisite: [ACCT 11301] Advanced Accounting



Lecturers:

Dr. Evony Silvino Violita, [coordinator]
Center of Islamic Economics and Business FEUI
evony@ui.ac.id, evony.silvino@gmail.com
08129607364 (mobile),
(021)7272425 ext.157 (office)

























UNIVERSITAS INDONESIA
FACULTY OF ECONOMICS AND BUSINESS
International Undergraduate Program


Financial Accounting Theory_OS 2014-2015 2
SUBJECT DESCRIPTION

This course aims to discuss frame of reference which influence and explain a
fundamental of financial accounting practice. Various of those reference might have
been inconsistently explained and concluded among them. Lecturing material consists
of introduction and approach for accounting theory formulation, its revolution as well
as the application of accounting policy.


SUBJECT OBJECTIVES

In terms of cognitive skills, by studying this subject, the students will improve the
ability:
1. Students are able to analyse financial report for company as an business entity
based on accounting framework.
2. Students are able to evaluate accounting treatment and practice as a recent and
future phenomenon.
3. Students has a good theoretical in accounting practice and procedure, to be
applied for recent business situation as well as contemporary issue in the future.

In addition, students will improve:
Analytical skill
Academic writing skill
Presentation skill
Team work skill
Active discussion skill

Generic Skills to be Developed
Intensity Level
Low Moderate High
Evaluation of ideas, views, and evidence X
Synthesis of ideas, views, and evidence X
Strategic thinking X
Critical thinking X
Self motivation and management X
Problem solving skills X
Collaborative learning and teamwork X
Negotiation and bargaining X
Written communication X
Oral communication X
Case analysis X


SUBJECT MATERIAL(S)

1. Godfrey, Jayne, Allan Hodgson, Ann Tarca, Jane Hamilton, and Scott Holmes.
Accounting Theory, 7
th
Ed. John Wiley & Sons, Inc. 2010. (GOD)
Financial Accounting Theory_OS 2014-2015 3
2. Scott, William R. Financial Accounting Theory, 6
th
Ed. Pearson Prentice Hall,
2012. (WRS)
3. Schroeder, Clark, and Cathey. Financial Accounting Theory and Analysis, 9th
Edition. John Wiley & Sons, Inc. 2009. (SCC)
4. Paik, Gyung. The Value Relevance of Fixed Asset Revaluation Reserves in
International Accounting. International Management Review, 2009. (Paik,
2009)
5. McCarthy, Mark G., and Douglas K. Schneider. Classification of Financial
Instruments with Characteristics of Both Debt and Equity: Evidence Concerning
Convertible Redeemable Preferred Stock. Academy of Accounting and
Financial Studies Journal, 2001. (McCarthy and Schneider, 2001)
6. Mintz, Stephen M. Proposed Changes in Revenue Recognition under U.S.
GAAP and IFRS. The CPA Journal, 2009. (Mintz, 2009)
7. Martin, Jim. Accounting for Expenses. The CPA Journal, 2009. (Martin,
2009)
8. Caylor, Marcus L. Strategic Revenue Recognition to Achieve Earnings
Benchmark. Journal of Accounting & Public Policy, 2010. (Caylor, 2010)
9. Ikatan Akuntan Indonesia, Standar Akuntansi Keuangan, Jakarta: Salemba
Empat, 2009 (PSAK)


REFERENCES

Copeland, Lawrence S., Exchange Rate and International Finance, Harlow, England:
Addison-Wesley, 2nd Edition, 1995 (C)
Krugman, Paul R., and Maurice Obstfeld, International Economics, Theory and Policy,
New York: Addison-Wesley, 5th Edition, 2000 (KO)
Eiteman, David K, Arthur I. Stonehill, and Michael H. Moffet, Multinational Business
Finance, New York: Addison-Wesley, 9th Edition, 2001 (ESM)
Tucker, Alan L., Jeff Madura, and Thomas C. Chiang, International Financial Market,
New York: West Publishing Company, 1998 (TMJ)
Hallwood and McDonald, International Money and Finance (HM), 2000.
Mishkin, F. (M) Financial Markets, Institutions, and Money. 1995
Articles regarding Asia Crisis


ASSESSMENT

Final grade consists of
a. Quiz 10%
b. Group Presentation 10%
c. Participation 10%
d. Individual Paper 10%
e. Mid-term Examination 30%
f. Final Examination 30%

100%

Financial Accounting Theory_OS 2014-2015 4

CLASSROOM ORGANIZATION

One 150-minute lecture per week (total: 14 weeks).
Students should be active in discussion and every participation will be noted down
to support assessment.
Quiz will be conducted anytime
Students who do not attend the class within 30 minutes will be checked as absent.

Teaching Methods consist of:

Lecture yes
Class discussion yes
Individual Project & paper yes
Group project & paper yes
Presentation yes
Case analysis yes
Tutorial no
In-class experience exercise yes
Collaborative learning yes

Teaching method consists of lecture, students presentation, class discussion, case
analysis, problem solving, and cooperative learning.


CLASS ASSIGNMENT

Group/Individual assignment

LECTURER POLICY

Assignment should be handed in no later than due date. Any late work will be assessed
a penalty of five (5) point a day (max. two days). Work handed in late than three days
will be marked for zero (0).

Financial Accounting Theory_OS 2014-2015 5


CLASS TIMETABLE


Session


Topic

Sub-Topic

Reference
1 Introduction
Accounting
Theory
Construction
Overview of Accounting
Theory
Pragmatic Theories
Syntactic and Semantic
Theories
Normative Theories
Positive Theories
Other Perspectives and Issues
GOD Bab 1
GOD Bab 2
SCC Bab 1
2 Applying Theory to
Accounting
Regulation

The Theories of Regulation
Relevant to Accounting and
Auditing
How the Theories of
Regulation Apply to
Accounting and Auditing
Practice
The Regulatory Framework for
Financial Reporting
The Institutional Structure for
Setting Accounting and
Auditing Standards
GOD Bab 3
WRS Bab 13
(Sub Bab 13.2)
SCC Bab 4

3 A Conceptual
Framework

The Role of Conceptual
Framework
Objectives of Conceptual
Frameworks
Developing a Conceptual
Framework
A Critique of Conceptual
Framework Projects
Conceptual Framework for
Auditing Standards
GOD Bab 4
PSAK
KDP2LK
SCC Bab 2

4 Measurement
Theory
Importance of Measurement
Scales
Permissible Operations of
Scales
Types of Measurement
Reliability and Accuracy
Measurement in Accounting
Measurement Issues for
Auditors
GOD Bab 5

Financial Accounting Theory_OS 2014-2015 6

Session


Topic

Sub-Topic

Reference
5 Accounting
Measurement
Systems
Income and Capital
Measurement System
Historical Cost Accounting
Current Cost Accounting
Financial Capital versus
Physical Capital
Exit Price Accounting
Value in Use versus Value in
Exchange
A Global Perspective and IFRS
Issues for Auditors
GOD Bab 6
SCC Bab 5


6 & 7 Assets






Liabilities and
Owners Equity
Asset Defined
Asset Recognition
Asset Measurement
Challenges for Standard Setters
Issues for Auditors


Proprietary and Entity Theory
Liabilities Defined
Liability Measurement
Challenges for Standard Setters
GOD Chapter 7
GOD Chapter 8
PSAK 16
(revised in
2011)
PSAK 19
(revised in
2010)
PSAK 50
(revised in
2010) and
PSAK 55
(revised in
2011),, except
Derivatives
Paik (2009)
McCarthy and
Schneider
(2001)
8 & 9 Revenue





Expenses
Revenue Defined
Revenue Recognition
Revenue Measurement
Challenges for Standard Setters
Issues for Auditors

Expenses Defined
Expenses Recognition
Expenses Measurement
Challenges for Standard Setters

GOD Chapter 9
GOD Chapter
10
PSAK 23
(revised in
2010)
PSAK 34
(revised in
2010)
Mintz (2009)
Martin (2009)
Caylor (2010)

Financial Accounting Theory_OS 2014-2015 7

Session


Topic

Sub-Topic

Reference
10 Positive Theory of
Accounting Policy
and Disclosure
Contracting Theory
Agency Theory
Agency Problems
Signaling Theory
Political Process
Agency Cost
Empirical Test of Theory and
Evaluating the Theory
Issues for Auditors
GOD Chapter
11
WRS Chapter 9

11 Capital Market
Research
Philosophy of Positive
Accounting Theory
Strenght of Positive Theory
Scope of Positive Accounting
Theory
Capital Market Research and
the Efficient Market
Hypothesis
Impact of Accounting Profits
Announcements on Share
Prices
Trading Strategies
Issues for Auditors
GOD Chapter
12
WRS Chapter 4
and Chapter 8
(Sub Chapter
8.2)
SCC Chapter 4

12 Behavioural
Research in
Accounting (BAR)

Definition and Scope
Why is BAR Important?
Representativeness: the
Evidence
Accounting and Behaviour
Limitation of BAR
Issues for Auditors
GOD Chapter
13

13 Standard Setting

Standard Setting: Economics
Issues
Standard Setting: Political
Issues
WRS Chapter
12 and 13
(except sub
chapter 13.2)

14 Emerging Issues in
Accounting and
Auditing
Factors Influencing Accounting
and Auditing Research,
Regulation and Practice
Application of Fair Falue
Accounting during Global
Financial Cricis
Future International
Acoounting Standard Setting
Arrangements
GOD Chapter
14
SCC Chapter 17

Financial Accounting Theory_OS 2014-2015 8

Session


Topic

Sub-Topic

Reference
Sustainabiity Accounting,
Reporting and Assurance
Other Non Financial
Accounting and Reporting
Issues