ACT 810D — Accounting Theory

• discuss the regulatory, conceptual and ethical framework of accounting
• demonstrate an understanding of the theoretical foundations of accounting
• explain the normative, positive and critical theories of accounting
• analyse the development of accounting standards
• apply accounting standards in the treatment of accounting transactions
• distinguish between the concepts of income and value measurements
• assess the various alternatives to historical cost accounting
• demonstrate an understanding of contemporary issues in financial reporting
• appreciate the professional and ethical requirements of corporate reporting and the consequences of unethical behavior

Accounting

• discuss the regulatory, conceptual and ethical framework of accounting
• demonstrate an understanding of the theoretical foundations of accounting
• explain the normative, positive and critical theories of accounting
• analyse the development of accounting standards
• apply accounting standards in the treatment of accounting transactions
• distinguish between the concepts of income and value measurements
• assess the various alternatives to historical cost accounting
• demonstrate an understanding of contemporary issues in financial reporting
• appreciate the professional and ethical requirements of corporate reporting and the consequences of unethical behavior

The Environment and Regulation of Accounting and Reporting

• Nature and environment of financial accounting
• Historical overview of accounting
• Regulatory framework of financial reporting
• The IASB's Conceptual framework for financial reporting
• Current developments in financial reporting standards
• Current developments in corporate reporting
• Implications of changes in accounting regulation on financial reporting
• Professional and ethical duty of an accountant
• Social and environmental reporting
• Sustainability reporting and the Global Reporting Initiative (GRI)
• Integrated reporting and the International Integrated Reporting Council (IIRC)
• Internet reporting and the eXtensible Business Reporting Language (XBRL)

The Role of Accounting Theory

• Evolution and developments of the theoretical foundations of accounting
• What is theory
• Hypothesis
• Theories, law and theorems
• Positive fact and normative opinions
• Normative and positive theories
• Accounting theory, economics and law
• Systems and Political Economy-oriented Theories
• Proprietary theory
• Entity theory
• Fund theory
• Decision theory and information usefulness

Accountability and Systems-Oriented Theories

• Auditing’s market role
• Theories of Accountability
• Stakeholder theory
• Legitimacy theory
• Institutional theory
• Mimetic Isomorphism
• Coercive Isomorphism
• Normative Isomorphism
• Decoupling
• Agency theory

Accounting Standards

• Introduction to regulation and constructionism
• The nature of accounting standards
• Standard based on rules or on principles
• The IASB and the accounting standard setting process
• Current and future accounting standards (IASs and IFRSs)
• International accounting and the convergence process (IASB and FASB)
• Overview of IFRSs

Measurement and Valuation

• The concepts of capital, income and value measurements
• Objectives of income measurements
• The concepts of capital maintenance
• Historical cost accounting
• Adjustments for general price-level changes
• Current purchasing power accounting
• Current cost accounting
• Fair value accounting