Introductory description

This module explores the shaping of contemporary financial accounting practice, its rationales and frameworks. It will support students to critically engage with, reflect on, and get ready to actively contribute to, the past, present and future development of accounting and finance expertise.

Module aims

Outline syllabus

This is an indicative module outline only to give an indication of the sort of topics that may be covered. Actual sessions held may differ.

Why regulate accounting? Why standardise financial reporting?
IFRS and the role of a conceptual framework
Objectives, qualitative characteristics and elements of financial reporting
Understanding objectivity and financial reporting quality
Accounting, textuality, and reality construction
Power and the circulation of accounting inscriptions
Accounting and the production of organisational spaces
Financial reporting and organisational accountability
What determines accounting choices? Positive accounting theory; economic consequences of accounting choices; the Efficient Market Hypothesis and accounting.

Learning outcomes

By the end of the module, students should be able to:

• Demonstrate an advanced and critical understanding of the rationale behind the current system of regulation, standardisation and external auditing of financial reporting, including professional ethics.
• Demonstrate a comprehensive understanding of the role of normative, descriptive, and predictive theory in the formation and investigation of accounting practice.
• Demonstrate a critical and nuanced understanding of the issues relating to accounting representation in the current system
• Critically reflect upon personal assumptions about authority and accountability in financial reporting
• Critically evaluate current accounting practice and regulatory content

Indicative reading list

Deegan, C & Unerman, J. (2009) Financial Accounting Theory McGraw-Hill
Hines, R.D (1988) “Financial Accounting: In Communicating Reality, We Construct Reality” Accounting, Organizations and Society, 13 (3) pp.251-261 (Classic piece)
International Accounting Standards Board (IASB) (2018) Conceptual Framework for Financial Reporting London: IASB
Murphy, T., O’Connell, V. and Ó hÓgartaigh, C. (2013) "Discourses surrounding the evolution of the IASB/FASB Conceptual Framework: What they reveal about the "living law” of accounting", Accounting, Organizations and Society, 38:72–91
Pelger, C. (2016) "Practices of standard-setting - an analysis of the IASB's and FASB's process of identifying the objective of financial reporting", Accounting, Organizations and Society, 50:51-73
Wagner, J.W. (1965) “Defining Objectivity in Accounting” The Accounting Review July p. 599-605 (Historical Relevance)
Watts, R., and J. Zimmerman, (1990). Positive accounting theory: a ten year perspective. The Accounting Review 65:131-156.
Wyatt, A. R. (2004) “Accounting Professionalism: They Just Don’t Get It!” Accounting Horizons 18 (1) pp. 45-53 (Enron and Andersen)

Research element

The module encourages students to engage directly with research articles and involves the working through of problems on the basis of concepts drawn from various strands of accounting theory.

Interdisciplinary

The module utilises accounting theory broadly considered, giving particular attention to approaches drawn from other social sciences such as sociology, history, and philosophy.

International

The module engages with the internationalisation of the accounting profession by focussing on the work of the IASB in the manufacture of international accounting standards.

Subject specific skills

Explain and evaluate the contingency of current technical regulations based on an understanding of the evolving and reactive regulatory system of international financial reporting (e.g. due process, politics, history of financial reporting concepts)
Explain and evaluate the social, organisational, institutional, and epistemological factors that impact on the technical and ethical practice of financial reporting (e.g. professional ethics, national differences representationalism, power-knowledge)
Identify and assess ethical issues relating to the practicing of financial reporting disclosure
Explain and evaluate the conceptual issues underpinning the technical regulations relating to measurement and the IASB conceptual framework (including a critical understanding of the scope of financial reporting and issues of relevance and faithful representation)

Transferable skills

Written communication
Numeracy