Financial accounting theory:
Saved in:
| Main Author: | |
|---|---|
| Format: | Book |
| Language: | English |
| Published: |
Toronto
Pearson Prentice Hall
2009
|
| Edition: | 5. ed. |
| Subjects: | |
| Online Access: | Inhaltsverzeichnis |
| Physical Description: | XII, 546 S. |
| ISBN: | 9780132072861 |
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| 245 | 1 | 0 | |a Financial accounting theory |c William R. Scott |
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| 264 | 1 | |a Toronto |b Pearson Prentice Hall |c 2009 | |
| 300 | |a XII, 546 S. | ||
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Record in the Search Index
| _version_ | 1804138601059975168 |
|---|---|
| adam_text | Contents
Preface
xi
Acknowledgments
xiii
1
Introduction
1
1.1
The Objective of This Book
1
1.2
Some Historical Perspective
1
1.3
A Note on Ethical Behaviour
10
1.4
The Complexity of Information
in Financial Accounting and
Reporting
11
1.5
The Role of Accounting
Research
12
1.6
The Importance of Information
Asymmetry
13
1.7
The Fundamental Problem of
Financial Accounting Theory
14
1.8
Regulation as a Reaction to
the Fundamental Problem
15
1.9
The Organization of This
Book
16
1.9.1
Ideal Conditions
16
1.9.2
Adverse Selection
16
1.9.3
Moral Hazard
17
1.9.4
Standard Setting
18
1.9.5
The Process of Standard
Setting
18
1.10
Relevance of Financial Accounting
Theory to Accounting Practice
21
2
Accounting Under Ideal
Conditions
24
2.1
Overview
24
2.2
The Present Value Model Under
Certainty
25
2.2.1
Summary
28
2.3
The Present Value Model Under
Uncertainty
29
2.3.1
Summary
35
2.4
Reserve Recognition Accounting
(RRA)
35
2.4.1
An Example of RRA
35
2.4.2
Summary
38
2.4.3
Critique of RRA
38
2.4.4
Summary
41
2.5
Historical Cost Accounting
Revisited
41
2.5.1
Comparison of Different
Measurement Bases
41
2.5.2
Accruals
43
2.5.3
Summary
45
2.6
The Non-Existence of True Net
Income
45
2.7
Conclusion to Accounting Under
Ideal Conditions
47
3
The Decision Usefulness
Approach to Financial
Reporting
58
3.1
Overview
58
3.2
The Decision Usefulness
Approach
59
3.2.1
Summary
60
3.3
Single-Person Decision
Theory
60
3.3.1
Decision Theory Applied
61
3.3.2
The Information System
64
3.3.3
Information Defined
68
3.3.4
Summary
68
3.4
The Rational, Risk-Averse
Investor
68
3.5
The Principle of Portfolio
Diversification
71
3.5.1
Summary
76
3.6
The Optimal Investment
Decision
76
3.6.1
Summary
78
3.7
Portfolio Risk
79
3.7.1
Calculating and Interpreting
Beta
79
3.7.2
Portfolio Expected Value and
Variance
81
3.7.3
Portfolio Risk as the Number
of Securities Increases
82
3.7.4
Summary
83
3.8
The Reaction of Professional
Accounting Bodies to the Decision
Usefulness Approach
83
3.8.1
Summary
87
3.9
Conclusions on Decision
Usefulness
87
4
Efficient Securities Markets
98
4.1
Overview
98
4.2
Efficient Securities Markets
99
4-2.1
The Meaning of Efficiency
99
4-2.2
How Do Market Prices Fully
Reflect All Available
Information?
101
4-2.3
Summary
104
4.3
Implications of Efficient
Securities Markets for
Financial Reporting
104
4-3.1
Implications
104
4-3.2
Summary
106
4.4
The Informativeness of Price
107
4-4-1
A Logical Inconsistency
107
4-4-2
Summary
110
4.5
A Capital Asset Pricing
Model
110
4.6
Information Asymmetry
114
4-6.1
A Closer Look at Information
Asymmetry
114
4-6.2
Summary
117
4.7
The Social Significance of
Securities Markets that Work
Well
118
4.8
An Example of Full
Disclosure
119
4-8.1
Introduction
119
4-8.2
Management Discussion and
Analysis
119
4.9
Conclusions on Efficient
Securities Markets
135
5
The Information Approach to
Decision Usefulness
143
5.1
Overview
143
5.2
Outline of the Research
Problem
145
5.2.1
Reasons for Market
Response
145
5.2.2
Finding the Market
Response
146
5.2.3
Separating Market-Wide and
Firm-Specific Factors
146
5.2.4
Comparing Returns and
Income
148
5.3
The Ball and Brown Study
149
5.3.1
Methodology and Findings
149
5.3.2
Causation Versus
Association
151
5.3.3
Outcomes of the BB Study
153
5.4
Earnings Response
Coefficients
153
5.4.1
Reasons for Differential Market
Response
154
vi
Contents
5.4.2
Implications
of
ERC
Research
159
5.4.3
Measuring Investors Earnings
Expectations
159
5.4-4
Summary
161
5.5
Unusual, Non-recurring, and
Extraordinary Items
162
5.6
A Caveat about the Best
Accounting Policy
164
5.7
The Information Content of
Other Financial Statement
Information
166
5.8
Conclusions on the Information
Approach
167
6
The Measurement
Approach to Decision
Usefulness
177
6.1
Overview
177
6.2
Are Securities Markets Fully
Efficient!
178
6.2.1
Introduction
178
6.2.2
Prospect Theory
180
6.2.3
Is Beta Dead?
183
6.2.4
Excess Stock Market
Volatility
185
6.2.5
Stock Market Bubbles
186
6.2.6
Efficient Securities Market
Anomalies
186
6.2.7
Implications of Securities
Market Inefficiency for
Financial Reporting
189
6.2.8
Discussion of Market
Efficiency Versus Behavioural
Finance
191
6.2.9
Conclusions About Securities
Market Efficiency
195
6.3
Other Reasons Supporting a
Measurement Approach
195
6.4
The Value Relevance of Financial
Statement Information
196
6.5
Ohlson s Clean Surplus
Theory
198
6.5.1
Three Formulae for
Firm Value
198
6.5.2
Earnings Persistence
201
6.5.3
Estimating Firm Value
204
6.5.4
Empirical Studies of the Clean
Surplus Model
208
6.5.5
Summary
209
6.6
Auditors Legal Liability
210
6.7
Asymmetry of Investor
Losses
212
6.8
Conclusions on the
Measurement Approach to
Decision Usefulness
216
7
Measurement Applications
228
7.1
Overview
228
7.2
Longstanding Measurement
Examples
230
7.2.1
Accounts Receivable and
Payable
230
7.2.2
Cash Flows Fixed by
Contract
231
7.2.3
The Lower-of-Cost-or-Market
Rule
231
7.2.4
Revaluation Option for Property,
Plant, and Equipment
232
7.2.5
Ceiling Test for Property,
Plant, and Equipment
232
7.2.6
Pensions and Other Post-
Employment Benefits
233
7.2.7
Summary
235
7.3
Financial Instruments
235
7-3.1
Introduction
235
7.3.2
Valuation of Debt and Equity
Securities
236
Contents
vii
7.3.3
Conclusion
239
7.3.4
Derivative Instruments
239
7.3.5
Hedge Accounting
243
7.3.6
Conclusion
248
7.4
Accounting for Intangibles
248
7.4.1
Introduction
248
7-4-2
Accounting for Purchased
Goodwill
249
7.4.3
Self-Developed Goodwill
252
7.4-4
The Clean Surplus Model
Revisited
254
7.4.5
Summary
255
7.5
Reporting on Risk
255
7.5.1
Beta Risk
255
7.5.2
Why Do Firms Manage Firm-
Specific Risk?
257
7.5.3
Stock Market Reaction to
Other Risks
258
7.5.4
A Measurement Approach to
Risk Reporting
260
7.5.5
Summary
262
7.6
Conclusions on Measurement
Applications
263
8
Economic Consequences and
Positive Accounting
Theory
273
8.1
Overview
273
8.2
The Rise of Economic
Consequences
275
8.2.1
Summary
276
8.3
Employee Stock Options
277
8.4
The Relationship between Efficient
Securities Market Theory and
Economic Consequences
283
8.5
The Positive Theory of
Accounting
284
8.5.1
Outline of Positive Accounting
Theory
284
8.5.2
The Three Hypotheses of
Positive Accounting
Theory
287
8.5.3
Empirical PAT Research
290
8.5.4
Distinguishing the
Opportunistic and Efficient
Contracting Versions of
PAT
294
8.6
Conclusions on Economic
Consequences and Positive
Accounting Theory
296
9
An Analysis of Conflict
304
9.1
Overview
304
9.2
Understanding Game
Theory
305
9.3
A Non-Cooperative Game
Model of Manager—Investor
Conflict
306
9.3.1
Summary
312
9.4
Some Models of Cooperative
Game Theory
313
9-4-1
Introduction
313
9.4-2
Agency Theory: An
Employment Contract Between
Firm Owner and Manager
313
9.5
Manager s Information
Advantage
325
9.5.1
Earnings Management
325
9.5.2
Controlling Earnings
Management
329
9.6
Discussion and Summary
331
9.7
Agency Theory: A Bondholder-
Manager Lending Contract
332
9.7.1
Summary
335
9.8
Implications of Agency Theory
for Accounting
335
9.8.1
Is Two Better Than One?
335
9.8.2
Rigidity of Contracts
339
Contents
9.9
Reconciliation
of
Efficient
Securities Market Theory with
Economic Consequences
341
9.10
Conclusions on the Analysis of
Conflict
341
10
Executive Compensation
356
10.1
Overview
356
10.2
Are Incentive Contracts
Necessary?
357
10.3
A Managerial Compensation
Plan
360
10.4
The Theory of Executive
Compensation
372
10.4.1
The Relative Proportions of
Net Income and Share Price
in Evaluating Manager
Performance
372
10.4.2
Short-Run and Long-Run
Effort
374
10.4-3
The Role of Risk in Executive
Compensation
377
10.5
Empirical Compensation
Research
381
10.6
The Politics of Executive
Compensation
383
10.7
The Power Theory of Executive
Compensation
386
10.8
The Social Significance of
Managerial Labour Markets that
Work Well
389
10.9
Conclusions on Executive
Compensation
389
11
Earnings Management
11.1
Overview
402
11.2
Patterns of Earnings
Management
405
402
11.3
Evidence of Earnings
Management for Bonus
Purposes
406
11.4
Other Motivations for Earnings
Management
411
11.4.1
Other Contracting
Motivations
411
11.4-2
To Meet Investors Earnings
Expectations and Maintain
Reputation
413
11.4.3
Initial Public Offerings
414
11.5
The Good Side of Earnings
Management
415
11.5.1
Blocked Communication
415
11.5.2
Theory and Empirical
Evidence of Good Earnings
Management
416
11.6
The Bad Side of Earnings
Management
422
11.6.1
Opportunistic Earnings
Management
422
11.6.2
Do Managers Accept Securities
Market Efficiency?
425
11.6.3
Implications for
Accountants
426
11.7
Conclusions on Earnings
Management
427
12
Standard Setting:
Economic Issues
443
12.1
Overview
443
12.2
Regulation of Economic
Activity
444
12.3
Ways to Characterize Information
Production
446
12.4
Private Incentives for
Information Production
447
12.4-1
Contractual Incentives for
Information Production
447
Contents
ix
12.4.2
Market-Based
Incentives
for
Information Production
449
12.4.3
Securities Market Response to
Full Disclosure
450
12.5
A Closer Look at Market-Based
Incentives
452
12.5.1
The Disclosure Principle
452
12.5.2
Signalling
456
12.5.3
Financial Policy as a
Signal
459
12.5.4
Private Information
Search
460
12.5.5
Summary
461
12.6
Sources of Market Failure
462
12.6.1
Externalities and
Free-Riding
462
12.6.2
The Adverse Selection
Problem
463
12.6.3
The Moral Hazard
Problem
464
12.6.4
Unanimity
465
12.6.5
Summary
465
12.7
How Much Information Is
Enough?
466
12.8
Decentralized Regulation
468
12.9
Conclusions on Standard Setting
Related to Economic Issues
469
13
Standard Setting:
Political Issues
483
13.1
Overview
483
13.2
Two Theories of Regulation
484
13.2.1
The Public Interest
Theory
484
13.2.2
The Interest Group
Theory
485
13.2.3
Which Theory of
Regulation Applies to
Standard Setting?
486
13.3
Conflict and Compromise
486
13.3.1
An Example of Constituency
Conflict
486
13.3.2
Comprehensive Income
489
13.3.3
Conclusions Regarding
Comprehensive Income
491
13.4
Rules-Based versus Principles-
Based Accounting Standards
492
13.5
Criteria for Standard Setting
493
13.5.1
Decision Usefulness
493
13.5.2
Reduction of Information
Asymmetry
493
13.5.3
Economic Consequences of
New Standards
494
13.5.4
The Political Aspects of
Standard Setting
495
13.5.5
Summary
496
13.6
International Integration of
Capital Markets
496
13.6.1
Convergence of Accounting
Standards
496
13.6.2
Effects of Customs and
Institutions on Financial
Reporting
497
13.6.3
Enforcement of Accounting
Standards
499
13.6.4
Benefits of Adopting
High Quality Accounting
Standards
500
13.6.5
Should Standard Setters
Compete?
501
13.6.6
Summary of Accounting for
International Capital Markets
Integration
502
13.7
Conclusions and
Summing Up
503
Bibbgraphy
513
Index
531
Contents
|
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| spelling | Scott, William R. 1931- Verfasser (DE-588)124685943 aut Financial accounting theory William R. Scott 5. ed. Toronto Pearson Prentice Hall 2009 XII, 546 S. txt rdacontent n rdamedia nc rdacarrier Accounting Textbooks Accounting Canada Textbooks Rechnungswesen (DE-588)4048732-5 gnd rswk-swf Kanada Rechnungswesen (DE-588)4048732-5 s DE-604 Digitalisierung UB Bayreuth application/pdf http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=017105670&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA Inhaltsverzeichnis |
| spellingShingle | Scott, William R. 1931- Financial accounting theory Accounting Textbooks Accounting Canada Textbooks 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 |
| topic | Accounting Textbooks Accounting Canada Textbooks Rechnungswesen (DE-588)4048732-5 gnd |
| topic_facet | Accounting Textbooks Accounting Canada Textbooks Rechnungswesen Kanada |
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