Financial accounting theory:
Saved in:
| Main Author: | |
|---|---|
| Format: | Book |
| Language: | English |
| Published: |
Toronto
Prentice-Hall
2003
|
| Edition: | 3. ed. |
| Subjects: | |
| Online Access: | Inhaltsverzeichnis |
| Physical Description: | XIII, 509 S. Ill., graph. Darst. |
| ISBN: | 0130655775 |
Staff View
MARC
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Record in the Search Index
| _version_ | 1804140617641492480 |
|---|---|
| adam_text | CONTENTS
Preface xi
CHAPTER 1 Introduction 1
1.1 The Objective of This Book 1
1.2 Some Historical Perspective 1
1.3 The Complexity of Information in
Financial Accounting and Reporting 6
1.4 The Role of Accounting Research 6
1.5 The Importance of Information Asymmetry 7
1.6 The Fundamental Problem of Financial Accounting Theory 8
1.7 Regulation as a Reaction to the Fundamental Problem 9
1.8 The Organization of This Book 10
1.8.1 Ideal Conditions 10
1.8.2 Adverse Selection 11
1.8.3 - Moral Hazard 12
1.8.4 Standard Setting 13
1.9 Relevance of Financial Accounting Theory to Accounting Practice... 13
CHAPTER 2 Accounting Under Ideal Conditions 16
2.1 Overview 16
2.2 The Present Value Model Under Certainty 16
2.3 The Present Value Model Under Uncertainty 21
2.4 Reserve Recognition Accounting 29
2.4.1 An Example of RRA 29
2.4.2 Critique of RRA 33
2.4.3 Summary 35
2.5 Historical Cost Accounting Revisited 35
2.5.1 The Challenge of Historical Cost Accounting 36
2.5.2 Accountants Reaction to the Challenge 39
2.5.3 Summary 39
2.6 The Non-Existence of True Net Income 40
2.7 Conclusion 41
CHAPTER 3 The Decision Usefulness Approach to Financial Reporting 51
3.1 Overview 51
3.2 The Decision Usefulness Approach 52
3.3 Single-Person Decision Theory 53
3.3.1 Decision Theory Applied 53
3.3.2 The Information System 57
3.3.3 Information Defined 60
iv Contents
3.3.4 Conclusion 60
3.4 The Rational, Risk-Averse Investor 61
3.5 The Principle of Portfolio Diversification 63
3.6 The Optimal Investment Decision 69
3.7 Portfolio Risk 72
3.7.1 Calculating and Interpreting Beta 72
3.7.2 Portfolio Expected Value and Variance 74
3.7.3 Portfolio Risk as the Number of Securities Increases 75
3.7.4 Summary 76
3.8 The Reaction of Professional Accounting Bodies to the
Decision Usefulness Approach 76
3.9 Conclusions on Decision Usefulness 80
CHAPTER 4 Efficient Securities Markets 91
4.1 Overview 91
4.2 Efficient Securities Markets 92
4.2.1 The Meaning of Efficiency 92
4.2.2 How Do Market Prices Properly Reflect All
Available Information? 94
4.2.3 Summary 96
4.3 Implications of Efficient Securities Markets for
Financial Reporting 97
4.3.1 Implications 97
4.3.2 Summary 99
4.4 The Informativeness of Price 99
4.4.1 A Logical Inconsistency 99
4.4.2 Summary 102
4.5 A Capital Asset Pricing Model 102
4.6 Information Asymmetry 105
4.6.1 The Concept of Information Asymmetry 105
4.6.2 Summary 108
4.7 The Social Significance of Properly Working
Securities Markets 108
4.8 Examples of Full Disclosure 110
4.8.1 Introduction 110
4.8.2 Management Discussion and Analysis 110
4.8.3 Future-Oriented Financial Information 119
4.9 Summary and Conclusions 128
CHAPTER 5 The Information Perspective on Decision Usefulness 137
5.1 Overview 137
5.2 Outline of the Research Problem 138
5.2.1 Reasons for Market Response 138
Contents v
5.2.2 Finding the Market Response 140
5.2.3 Separating Market-Wide and Firm-Specific Factors 141
5.2.4 Comparing Returns and Income 142
5.3 The Ball and Brown Study 144
5.3.1 Methodology and Findings 144
5.3.2 Causation versus Association 146
5.3.3 Outcomes of the BB Study 147
5.4 Earnings Response Coefficients 148
5.4.1 Reasons for Differential Market Response 148
5.4.2 Implications of ERC Research 154
5.4.3 Measuring Investors Earnings Expectations 154
5.4.4 Summary 156
5.5 Unusual, Non-recurring and Extraordinary Items 156
5.6 A Caveat about the Best Accounting Policy 158
5.7 The Information Content of RRA 160
5.8 Summary and Conclusions 164
CHAPTER 6 The Measurement Perspective on Decision Usefulness 174
6.1 Overview 174
6.2 Are Securities Markets Efficient? 175
6.2.1 Introduction 175
6.2.2 Prospect Theory 176
6.2.3 Is Beta Dead? 179
6.2.4 Excess Stock Market Volatility 180
6.2.5 Stock Market Bubbles 181
6.2.6 Efficient Securities Market Anomalies 181
6.2.7 Implications of Securities Market Inefficiency
for Financial Reporting 187
6.2.8 Conclusions About Securities Market Efficiency 188
6.3 Other Reasons Supporting a Measurement Perspective 189
6.4 The Value Relevance of Financial Statement Information 190
6.5 Ohlson s Clean Surplus Theory 191
6.5.1 Three Formulae for Firm Value 191
6.5.2 Earnings Persistence 195
6.5.3 Estimating Firm Value 198
6.5.4 Empirical Studies of the Clean Surplus Model 202
6.5.5 Summary 204
6.6 Auditors Legal Liability 204
6.7 Conclusions 205
CHAPTER 7 Measurement Perspective Applications 213
7.1 Introduction 213
7.2 Longstanding Measurement Examples 213
vi Contents
7.2.1 Accounts Receivable and Payable 213
7.2.2 Cash Flows Fixed by Contract 214
7.2.3 The Lower-of-Cost-or-Market Rule 214
7.2.4 Ceiling Test for Capital Assets 215
7.2.5 Push-Down Accounting 216
7.2.6 Conclusions 216
7.3 More Recent Fair-Value-Oriented Standards 216
7.3.1 Pensions and Other Post-Employment Benefits 216
7.3.2 Impaired Loans 217
7.4 Financial Instruments 218
7.4.1 Introduction 218
7.4.2 Valuation of Debt and Equity Securities 219
7.4.3 Derivative Instruments 221
7.4.4 Hedge Accounting 225
7.4.5 The Joint Working Group Draft Standard 228
7.5 Accounting for Intangibles 230
7.5.1 Introduction 230
7.5.2 Accounting for Purchased Goodwill 231
7.5.3 Self-Developed Goodwill 236
7.5.4 The Clean Surplus Model Revisited 237
7.5.5 Summary 238
7.6 Reporting on Risk 238
7.6.1 Beta Risk 238
7.6.2 Stock Market Reaction to Other Risks 240
7.6.3 A Measurement Perspective on Risk Reporting 242
7.6.4 Conclusions 244
7.7 Summary and Conclusions 244
CHAPTER 8 Economic Consequences and Positive Accounting Theory 259
8.1 Overview 259
8.2 The Rise of Economic Consequences 260
8.3 Employee Stock Options 262
8.4 Accounting for Government Assistance 267
8.4.1 The PIP Grant Accounting Controversy 269
8.4.2 Summary 270
8.5 Stock Market Reaction to Successful-Efforts Accounting
in the Oil and Gas Industry 270
8.6 The Relationship Between Efficient Securities Market Theory
and Economic Consequences 272
8.7 The Positive Theory of Accounting 273
8.7.1 Outline of Positive Accounting Theory 273
8.7.2 The Three Hypotheses of Positive Accounting Theory 276
8.7.3 Empirical PAT Research 279
Contents vii
8.7.4 Distinguishing the Opportunistic and Efficient
Contracting Versions of PAT 283
8.7.5 Conclusions 286
CHAPTER 9 An Analysis of Conflict 298
9.1 Overview 298
9.2 Understanding Game Theory 299
9.3 A Non-cooperative Game Model of Manager-Investor Conflict.. 300
9.3.1 Summary 305
9.4 Some Models of Cooperative Game Theory 305
9.4.1 Introduction 305
9.4.2 Agency Theory : An Employment Contract Between
Firm Owner and Manager 306
9.4.3 Agency Theory : A Bondholder-Manager Lending
Contract 315
9.5 Implications of Agency Theory for Accounting 318
9.5.1 Holmstrom s Agency Model 318
9.5.2 Rigidity of Contracts 319
9.6 Reconciliation of Efficient Securities Market Theory with
Economic Consequences 321
9.7 Summary and Conclusions 322
CHAPTER 10 Executive Compensation 335
10.1 Overview 335
10.2 Are Incentive Contracts Necessary? 336
10.3 A Managerial Compensation Plan 338
10.4 The Theory of Executive Compensation 345
10.5 The Role of Risk in Executive Compensation 348
10.6 Empirical Compensation Research 350
10.7 The Politics of Executive Compensation 353
10.8 Summary 356
CHAPTER 11 Earnings Management 368
11.1 Overview 368
11.2 Evidence of Earnings Management for Bonus Purposes 369
11.3 Other Motivations for Earnings Management 377
11.3.1 Other Contractual Motivations 377
11.3.2 Political Motivations 379
11.3.3 Taxation Motivations 379
11.3.4 Changes of CEO 380
11.3.5 Initial Public Offerings 382
11.3.6 To Communicate Information to Investors 383
11.4 Patterns of Earnings Management 383
viii Contents
11.5 Why Does Earnings Management Persist? 384
11.6 The Good Side of Earnings Management 385
11.7 The Bad Side of Earnings Management 389
11.8 Summary and Conclusions 392
CHAPTER 12 Standard Setting: Economic Issues 411
12.1 Overview 411
12.2 Regulation of Economic Activity 412
12.3 Private Incentives for Information Production 413
12.3.1 Ways to Characterize Information Production 413
12.3.2 Contractual Incentives for Information Production 415
12.3.3 Market-Based Incentives for Information Production 417
12.3.4 Securities Market Response to Full Disclosure 418
12.3.5 Other Information Production Incentives 420
12.3.6 Conclusions 427
12.4 Sources of Market Failure 428
12.4.1 Externalities and Free-Riding 428
12.4.2 The Adverse Selection Problem 429
12.4.3 The Moral Hazard Problem 429
12.4.4 Unanimity 430
12.4.5 Conclusions 430
12.5 How Much Information Is Enough? 431
12.6 Decentralized Regulation 432
12.7 Summary 432
CHAPTER 13 Standard Setting: Political Issues 447
13.1 Overview 447
13.2 Two Theories of Regulation 448
13.2.1 The Public Interest Theory 448
13.2.2 The Interest Group Theory 449
13.3 Standard Setting in Canada and the United States 450
13.3.1 The Canadian Institute of Chartered Accountants 450
13.3.2 The Ontario Securities Commission 452
13.3.3 The Financial Accounting Standards Board 453
13.3.4 The Securities and Exchange Commission 455
13.4 The International Accounting Standards Board 456
13.4.1 Establishment and Objectives of the IASB 456
13.4.2 Structure of the IASB 457
13.4.3 Authority of the IASB 457
13.5 Relationship to Theories of Regulation 459
13.6 Conflict and Compromise 460
13.6.1 An Example of Constituency Conflict 460
13.6.2 Comprehensive Income 464
13.6.3 Conclusions 465
Contents ix
13.7 Criteria for Standard Setting 466
13.7.1 Decision Usefulness 466
13.7.2 Reduction of Information Asymmetry 466
13.7.3 Economic Consequences of New Standards 467
13.7.4 The Political Aspects of Standard Setting 468
13.7.5 Summary 468
13.8 Conclusions 469
Bibliography 484
Index 499
|
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| id | DE-604.BV024602899 |
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| indexdate | 2024-07-09T22:02:50Z |
| institution | BVB |
| isbn | 0130655775 |
| language | English |
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| physical | XIII, 509 S. Ill., graph. Darst. |
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| spelling | Scott, William R. 1931- Verfasser (DE-588)124685943 aut Financial accounting theory William R. Scott 3. ed. Toronto Prentice-Hall 2003 XIII, 509 S. Ill., graph. Darst. txt rdacontent n rdamedia nc rdacarrier Rechnungswesen (DE-588)4048732-5 gnd rswk-swf Rechnungswesen (DE-588)4048732-5 s 1\p DE-604 HBZ Datenaustausch application/pdf http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=018576145&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA Inhaltsverzeichnis 1\p cgwrk 20201028 DE-101 https://d-nb.info/provenance/plan#cgwrk |
| spellingShingle | Scott, William R. 1931- Financial accounting theory Rechnungswesen (DE-588)4048732-5 gnd |
| subject_GND | (DE-588)4048732-5 |
| title | Financial accounting theory |
| title_auth | Financial accounting theory |
| title_exact_search | Financial accounting theory |
| title_full | Financial accounting theory William R. Scott |
| title_fullStr | Financial accounting theory William R. Scott |
| title_full_unstemmed | Financial accounting theory William R. Scott |
| title_short | Financial accounting theory |
| title_sort | financial accounting theory |
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