Imperfection of the accounting regulation
- Credits: 8
- Ending: Examination
- Range: 0P + 0C + 4S
- Year: 1
- Faculty of Economic Informatics
Teachers
Included in study programs
Teaching results
Upon finishing the course, the student will acquire knowledge, competences, and skills necessary for identification and assessment of past, current and/or future deficiencies of selected accounting regulations which have, or could have, a negative impact on the confirmatory and/or predictive value of the accounting information. Consequently, the student will be able to: a) focus their research within a domain of accounting and auditing on such imperfections, b) reduce the level of noise and biases in another accounting related research areas or areas using its data.
Knowledge
The student is deemed to enhance his/hers current understanding of the requirements of the regulatory frameworks for the accounting information and the auditing with the knowledge on the existence of bias and noise in such frameworks – either arising from their insufficient scope, form over the substance, ambiguity, inconsistence among the provisions, gaps, and lack of interpretative practice. In addition, he/she will acquire knowledge on the scope of the reflection of these issues in current academic research focused on this area and on its possible impact on the relevance of accounting data even in other fields of academic research.
Competences
Following acquired theoretical knowledge on the bias and noise perceived in accounting information and following the confrontation among the provisions of various regulations (and between such regulations and the results of their application in the financial statements, the student will be able to independently assets the accounting regulation and identify its weak points. In addition, he/she will be able to evaluate the research potential of the said problematic: a) from the point of view of its possible contribution to further enhancement of the theory and/or practice, and b) its position within mainstream and emerging topics of the academic literature.
Skills
Upon finishing the course, the students will be able to choose a topic and to prepare a draft of the scientific article with a focus on a certain imperfections of the selected accounting regulatory framework .
Indicative content
International and national accounting regulatory frameworks in place. Market and book value of US based companies. Reflection of loss of relevance of accounting data in academic research. General overview of culprits and examples of bias and noise in accounting regulation. Lack of the scope of the interests of accounting regulations. Compromises and form over the substance in accounting regulations. Ambiguity of accounting regulations. Contradictions among the various provisions of accounting regulations. Gaps in provisions of accounting regulations and the lack of interpretative practice. Accruals, profit or loss and cash-flows. 0Estimates and judgements. Study on the compliance of financial statements with accounting regulations. Proposal for solving selected imperfections.
Support literature
1. Leuz, C. – Wysocki, P. D. (2016). The Economics of Disclosure and Financial Reporting Regulation: Evidence and Suggestions for Future Research. JOURNAL OF ACCOUNTING RESEARCH 54 (2), pp.525-622.
2. Melloni, G Caglio, A. Perego, P. (2017). Saying more with less? Disclosure conciseness, completeness and balance in Integrated Reports. JOURNAL OF ACCOUNTING AND PUBLIC POLICY 36 (3) , pp.220-238.
3. Li, S. Q. (2010). Does Mandatory Adoption of International Financial Reporting Standards in the European Union Reduce the Cost of Equity Capital? ACCOUNTING REVIEW 85 (2) , pp.607-636.
4. Kagan, R. A. Thornton, D. Gunningham, N. (2003). Explaining corporate environmental performance: How does regulation matter? LAW & SOCIETY REVIEW 37 (1) , pp.51-90.
5. Healy, P. M. Palepu, K. G. (2001). Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature. JOURNAL OF ACCOUNTING & ECONOMICS 31 (1-3) , pp.405-440.
6. Beyer, A. et al. (2010). The financial reporting environment: Review of the recent literature. JOURNAL OF ACCOUNTING & ECONOMICS 50 (2-3) , pp.296-343.
7. International accounting standards and accounting quality
8. Barth, M. E. Landsman, W. R. Lang, M. H. (2008). JOURNAL OF ACCOUNTING RESEARCH 46 (3) , pp.467- 498.
Syllabus
1. International and national accounting regulatory frameworks in place 2. Market and book value of US based companies 3. Reflection of loss of relevance of accounting data in academic research 4. General overview of culprits and examples of bias and noise in accounting regulation 5. Lack of the scope of the interests of accounting regulations 6. Compromises and form over the substance in accounting regulations 7. Ambiguity of accounting regulations 8. Contradictions among the various provisions of accounting regulations 9. Gaps in provisions of accounting regulations and the lack of interpretative practice 10. Accruals, profit or loss and cash-flows 11. Estimates and judgements 12. Study on the compliance of financial statements with accounting regulations 13. Proposal for solving selected imperfections
Requirements to complete the course
52 hours: seminars
52 hours: preparation for the seminars
52 hours: preparation of the team project
8 hours: participation in colloquium
44 hours: preparation for the final exam
Student workload
Achievement of at least 51 % of the total points attributed for the team project and at least 51 % of points attributed for the final exam.
Date of approval: 10.02.2023
Date of the latest change: 08.01.2022