ACC4030 (3 CH) Accounting Theory

Summer 2019 105 Drake, T/R 4:15pm-6:45pm

CONTENTS INSTRUCTOR ......................................................... 1

COURSE DESCRIPTION........................................... 1

COURSE OBJECTIVES ............................................. 2

COURSE MATERIALS .............................................. 2

COURSE FORMAT .................................................. 3

ASSESSMENT OF LEARNING .................................. 3

MISSED EXAM AND LATE SUBMISSION POLICY .... 4

ATTENDANCE POLICY ............................................ 5

ELECTRONIC DEVICE POLICY ................................. 5

OUT-OF-CLASS COMMUNICATION ....................... 5

REFERENCING STYLE FOR WRITTEN WORK .......... 5

CLASS SCHEDULE ................................................... 6

IMPORTANT DATES ............................................... 6

INTENDED LEARNING OUTCOMES ........................ 7

ACADEMIC INTEGRITY POLICY .............................. 7

STUDENT SERVICES AND SUPPORTS ................... 11

ABOUT THE INSTRUCTOR .................................... 12

INSTRUCTOR Name: Debbie Mortimer, B. Comm. (Hons.), M. Acc., FCPA, FCGA Office: 356 Drake Centre Phone: NA – email only Email: mortimer@umanitoba.ca Office hours: Thursdays 3pm-4pm, or by appointment COURSE DESCRIPTION This course examines the principles and postulates of accounting theory. We will examine efficient securities market theory, positive accounting theory, agency theory, some behavioral finance theories and other relevant theories. This course is required for students majoring in accounting. The skills and competencies you gain in this course will be essential for continuing on to a professional accounting designation.

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COURSE OBJECTIVES The main objectives of this course are:

- To describe and explore various theories that underlie financial accounting and reporting. - To explain and illustrate the relevance of these theories in order to understand the practice

of financial accounting and reporting. - To critically examine the broader implications of financial accounting for the fair and

efficient operation of our economy. - To give an understanding of the current financial accounting and reporting environment

from the standpoint of the investor and the manager. - Increase awareness of how theories relate to, or contradict, real world events - Develop an interest in current events and issues facing the profession - Understand how scholarly research tests theories and can assist policy development

The skills and competencies you gain in this course will be essential for continuing on to a professional accounting designation. COURSE MATERIALS Text and Website Information: Financial Accounting Theory, William R. Scott. Prentice Hall. 2012. Seventh Edition. ISBN: 978-0-13-

298466-9 Please note that while the text is the primary source of information for the course, class discussions are important. Thus, you are responsible for the text material and class discussions for examination purposes. The course will be set up UM Learn. Here you will find lecture notes, assignments, additional reading material URL links (to articles to be discussed in class and/or for the group project), textbook solutions, and practice exams. Follow the instructions below to log on to UM Learn:

1. The UM Learn website address is: https://www.umanitoba.ca/d2l 2. Sign in using your University of Manitoba UMnetID. (If you do not have a UMnetID, go to the

Iridium website at: https://iridium.umanitoba.ca/ and click on Create UMnetID.)

3. From your Summer 2019 list of courses, click on ACC-4030.

research

Real world: -events

-current practice -profession

theory

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Please respect copyright laws. Photocopying textbooks or other reading material is a violation of copyright laws and is unethical, unless permission to copy has been obtained.

COURSE FORMAT This course will require class discussion. It is expected that students will read the required reading before class. Class time will consist of demonstrations problems and class discussions using instructor created questions and/or textbook questions. Thus, it is encouraged to bring your textbook to class. ASSESSMENT OF LEARNING Course grade is based upon: 12% Group article project, due August 8, 4:15pm (via drop box in UM Learn) 8% In Class Written Assignments/Discussion (8 @ 1% each) 30% Midterm Exam, 2.5 hours – Chapters 1-7, Tuesday, July 23 4:15pm-6:45pm; 105 Drake 50% Final Exam, 3 hours – Chapters 1-13, Saturday, August 10 9am-12pm; 136 Art Lab

The date for voluntary withdrawal is July 30.

Final grades are based on the student’s weighted mark and performance relative to other students. The following are the tentative grade cut-offs:

Cumulative Marks Grade GPA

90-100 A+ 4.5

85-89 A 4.0

75-84 B+ 3.5

70-74 B 3.0

65-69 C+ 2.5

60-64 C 2.0

50-59 D 1.0

Below 50 F 0.0

These tentative cut-offs are subject to adjustment up or down depending on the relative performance of the current class compared to prior classes that have taken the course with the same instructor.

Group Article Project The purpose of this group project is to apply concepts and theories covered in this course to practical issues. In assigned groups of 3-4 people, you will be required to select one article from a predetermined list of articles chosen by the instructor. Permalinks to the electronic version of these articles will be posted on UM Learn. Note you will need to log into the UM Library system to access these articles. Your project should consist of two parts: summary and analysis. Summary:

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For this part you are expected to answer four questions: 1. What are the questions being addressed? 2. How does this study build on previous studies or prior literature? 3. What methodology did author(s) use to investigate the research questions? 4. What are the main findings and conclusion of the study?

Analysis: For this part, you are expected to cover (but not limited to) the following questions:

1. How does this study relate to what you have learned in this course? 2. Does it extend or update what you have learned, or contradict what you have learned? Explain. 3. Do you think this article would have any practical implications for accounting practitioners,

policy makers, standard setters, capital market players (e.g., shareholders, creditors, managers, auditors, analysts, etc.)? Why or why not?

The total length for the article review should not exceed 5 pages double-spaced, minimum 11 point font.

Submission of the project should be done via the UM Learn drop box function. Please submit one file per

group in word or pdf format. Pages format will not be accepted. Each group member will have an option to evaluate each other group member’s performance. If one or more members did not contribute fully he or she should be given a contribution score of less than 100% (minimum = 0%). Your individual grade will be equal to the grade assigned for the group project, multiplied by your individual average contribution score as determined by the other group members. Please submit your evaluation via e-mail by August 10 at 4pm. Note if you do not submit a group evaluation it will be assumed you are giving each member a 100% contribution score.

In Class Written Assignments Starting June 27, you will be required to submit a written answer to a specific question, designed by the instructor. You will be given class time for this task. You will be allowed to discuss the question with your fellow students. Then you will form your own individual response for submission by the end of class. Submissions can be done electronically, via UM Learn, or via handwritten paper submission. Note: handwritten paper submissions are encouraged, as this will provide practice for the midterm and final exam, which will be paper handwritten based. These assignments are optional. If you choose not to submit an assignment, the weight of the assignment will be added to the final exam. Grading will be on a pass fail basis. The “correct” answer is not necessarily required to receive a “pass”. There are 10 assignments scheduled for 1 point each to a maximum of 8 points. Midterm and Final Exam The midterm and final exam will consist of multiple choice, short answers and/or long answer questions consisting of both quantitative and qualitative questions. The exams will be paper based, thus, legible handwriting is appreciated. MISSED EXAM AND LATE SUBMISSION POLICY For students who miss the midterm for legitimate reasons, the weight of the midterm exam will be allocated to the final examination (ie you will be writing an 80% final examination). Absence from exams

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will required appropriate documentation. If you miss the midterm for non-legitimate reasons you will be given a score of 0 (zero). There will be NO DEFERRED MIDTERM exam privileges. Students who miss the final exam must apply to the Undergraduate Program Office in their faculty for possible deferred examination privileges.

Any request for re-reads of term examinations and assignments must be made, in writing, within 10 working days of the class when it was returned. No late submissions of any term work will be accepted without prior consent of the instructor.

ATTENDANCE POLICY It is encouraged that you attend classes on a regular basis, as class discussions are important to vet and fully understand theories. Also, class discussions are examinable. ELECTRONIC DEVICE POLICY Use of laptops, tablets, phones, etc. are encouraged. Please remember to keep all devices on silent or vibrate. Please keep the use of your devices relevant to the course materials and discussion. If you are expecting a phone call, you are more than welcome to come to class, but just leave the room when that call comes through (and please remember to put your phone on vibrate).

Please obtain the permission of the instructor prior to audio/video-recording a lecture. OUT-OF-CLASS COMMUNICATION If needed, I will post announcements regarding important course or class related news on UM Learn. Thus, it is encouraged that you check UM Learn’s “Announcements” on the main course page on a regular basis. REFERENCING STYLE FOR WRITTEN WORK For the group article project, if you use references other than the textbook or the article itself, it is expected you will reference your source using APA or MLA format. Please visit https://owl.purdue.edu/owl/research_and_citation/apa_style/apa_formatting_and_style_guide/general_format.html for format examples/help.

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CLASS SCHEDULE Tentative Course Schedule Date Topic Readings June 25 Course Outline and Course Introduction Chp. 1 Accounting Under Ideal Conditions Chp. 2 June 27 Accounting Under Ideal Conditions

In class assignment – chapter 2 Groups Assigned

Chp. 2

July 2 Decision Usefulness Approach to Financial Reporting In class assignment – chapter 3

Chp. 3

July 4 Efficient Securities Markets In class assignment – chapter 4

Chp. 4

July 9 Value Relevance of Accounting Information In class assignment – chapter 5

Chp. 5

July 11 Measurement Perspective on Decision Usefulness In class assignment – chapter 6

Chp. 6

July 16 Measurement Perspective Applications In class assignment – chapter 7

Chp. 7

July 18 Article Discussions – posted on UM Learn July 23 Midterm Exam – Chapters 1-7 – 4:15-6:45 July 25 The Efficient Contracting Approach of Decision Usefulness

In class assignment – chapter 8 Chp. 8

July 30 An Analysis of Conflict In class assignment – chapter 9 VW date

Chp. 9

Aug 1 Executive Compensation Chp. 10 Earnings Management

In class assignment – chapter 10/11 Chp. 11

Aug 6 Standard Setting – Economic Issues In class assignment – chapter 12

Chp. 12

Aug 8 Standard Setting – Political Consequences and/or Review Chp. 13 Aug 10 Final Exam 9am-12pm, 136 Art Lab

Group Evaluation due by 4pm

IMPORTANT DATES Tuesday, July 23 Midterm Exam, 2.5 hours – Chapters 1-7, 4:15pm-6:45pm; 105 Drake Tuesday, July 30 Voluntary Withdrawal date Thursday, August 8 Group article project, due, 4:15pm (via drop box in UM Learn) Saturday, August 10 Final Exam, 3 hours – Chapters 1-13, 136 Art Lab

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INTENDED LEARNING OUTCOMES

AACSB Assurance of Learning Goals and Objectives. The Asper School of Business is proudly accredited by AACSB. Accreditation requires a process of continuous improvement of the School and our students. Part of “student improvement” is ensuring that students graduate with the knowledge and skills they need to succeed in their careers. To do so, the Asper School has set the learning goals and objectives listed below for the Undergraduate Program. The checked goal(s) and objective(s) will be addressed in this course and done so by means of the items listed next to the checkmark.

Goals and Objective in the Undergraduate

Program

Goals and Objectives Addressed

in this Course

Course Item(s) Relevant to these Goals and Objectives

1 Quantitative Reasoning

A. Determine which quantitative analysis technique is appropriate for solving a specific problem.

Identify type of question (notably, present value accounting (Chp 2), decision making (Chp 3), and incentive compensation (Chp 9)) Quantitative analysis in assignments and exams

B. Use the appropriate quantitative method in a technically correct way to solve a business problem.

Application of present value accounting (Chp 2), decision theory (Chp 3), and utility functions (Chp 3 & 9) Quantitative analysis in assignments and exams

C. Analyze quantitative output and arrive at a conclusion.

Interpretation of actual stock prices to theoretical stock prices (Chp 4), and decisions based on utility function results (Chp 3 & 9) Quantitative analysis in assignments and exams

2 Written Communication

A. Use correct English grammar and mechanics in their written work.

Qualitative analysis in assignments and exams (notably Group Project)

B. Communicate in a coherent and logical manner

Qualitative analysis in assignments and exams (notably Group Project)

C. Present ideas in a clear and organized fashion.

Qualitative analysis in assignments and exams (notably Group Project)

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3 Ethical Thinking

A. Identify ethical issues in a problem or case situation

Identify motivations for various management, investor and regulator decisions (Chp 4-13) Qualitative analysis in assignments and exams

B. Identify the stakeholders in the situation.

Identification of stakeholders in capital and labour markets (Chp 4-13) Qualitative analysis in assignments and exams

C. Analyze the consequences of alternatives from an ethical standpoint.

Evaluation of consequences to capital and labour markets of various management, investor and regulator decisions (Chp 4-13) Qualitative analysis in assignments and exams

D. Discuss the ethical implications of the decision.

Discuss impacts to capital and labour markets of various management, investor and regulator decisions (Chp 4-13) Qualitative analysis in assignments and exams

4 Core Business Knowledge Entire course

ACADEMIC INTEGRITY POLICY It is critical to the reputation of the Asper School of Business and of our degrees that everyone associated with our faculty behave with the highest academic integrity. As the faculty that helps create business and government leaders, we have a special obligation to ensure that our ethical standards are beyond reproach. Any dishonesty in our academic transactions violates this trust. The University of Manitoba General Calendar addresses the issue of academic dishonesty under the heading “Plagiarism and Cheating.” Specifically, acts of academic dishonesty include, but are not limited to:

using the exact words of a published or unpublished author without quotation marks and without referencing the source of these words

duplicating a table, graph or diagram, in whole or in part, without referencing the source paraphrasing the conceptual framework, research design, interpretation, or any other ideas of

another person, whether written or verbal (e.g., personal communications, ideas from a verbal presentation) without referencing the source

copying the answers of another student in any test, examination, or take-home assignment providing answers to another student in any test, examination, or take-home assignment taking any unauthorized materials into an examination or term test (crib notes) impersonating another student or allowing another person to impersonate oneself for the purpose

of submitting academic work or writing any test or examination stealing or mutilating library materials accessing test prior to the time and date of the sitting changing name or answer(s) on a test after that test has been graded and returned

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submitting the same paper or portions thereof for more than one assignment, without discussions with the instructors involved

Group Projects and Group Work Many courses in the Asper School of Business require group projects. Students should be aware that group projects are subject to the same rules regarding academic integrity. All group members should exercise special care to ensure that the group project does not violate the policy on Academic Integrity. Should a violation occur, group members are jointly accountable unless the violation can be attributed to specific individuals. Some courses, while not requiring group projects, encourage students to work together in groups before submitting individual assignments. If it’s unclear whether it is allowed, students are encouraged to seek clarification from the instructor to avoid violating the academic integrity policy. In the Asper School of Business, all suspected cases of academic dishonesty in undergraduate courses are reported to the Dean's office and follow the approved disciplinary process. See following table for typical penalties for academic dishonesty in the Asper School.

Typical Penalties for Academic Dishonesty in the Asper School

If the student is from another Faculty and the academic dishonesty is committed in an Asper course, the student’s Faculty could match or add penalties beyond the Asper School’s. F-DISC on transcript indicates the F is for disciplinary reasons.

ACADEMIC DISHONESTY PENALTY

Cheating on exam (copying from or providing answers to another student)

F-DISC in course Suspension from taking Asper courses for 1 year Notation of academic dishonesty in transcript

Sharing exam questions electronically during exam

F-DISC in course Suspension from taking Asper courses for 2 years Notation of academic dishonesty in transcript

Possession of unauthorized material during exam (e.g., cheat notes)

F-DISC in course Suspension from taking Asper courses for 1 year Notation of academic dishonesty in transcript

Altering answer on returned exam and asking for re-grading

F-DISC in course Suspension from taking Asper courses for 1 year Notation of academic dishonesty in transcript

Plagiarism on assignment F-DISC in course Suspension from taking Asper courses for 1 year Notation of academic dishonesty in transcript

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Submitting paper bought online F-DISC in course Suspension from taking Asper courses for 1 year Notation of academic dishonesty in transcript

Inappropriate Collaboration (collaborating with individuals not explicitly authorized by instructor)

F-DISC in course Suspension from taking Asper courses for 1 year Notation of academic dishonesty in transcript

Group member had knowledge of inappropriate collaboration or plagiarism and played along

F-DISC in course Notation of academic dishonesty in transcript

Signing Attendance Sheet for classmate

F-DISC in course Notation of academic dishonesty in transcript

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STUDENT SERVICES AND SUPPORTS The University of Manitoba provides many different services that can enhance learning and provide support for a variety of academic and personal concerns. You are encouraged to visit the below websites to learn more about these services and supports. If you have any questions or concerns, please do not hesitate to contact your instructor or the Undergraduate Program Office.

For Information on… …follow this link

Admission, Registration, Tuition Fees, Important Dates, Final Exams, Graduation, and Transcripts

Registrar’s Office

Academic policies & procedures, regulations, Faculty-specific information, degree and major requirements

Academic Calendar

Help with research needs such as books, journals, sources of data, how to cite, and writing

Library Resources

Tutors, workshops, and resources to help you improve your learning, writing, time management, and test-taking skills

Writing and Learning Support

Support and advocacy for students with disabilities to help them in their academic work and progress

Student Accessibility Services

Copyright-related questions and resources to help you avoid plagiarism or intellectual property violations

Copyright Office

Student discipline bylaws, policies and procedures on academic integrity and misconduct, appeal procedures

Academic Integrity

Policies & procedures with respect to student discipline or misconduct, including academic integrity violations

Student Discipline

Students’ rights & responsibilities, policies & procedures, and support services for academic or discipline concerns

Student Advocacy

Your rights and responsibilities as a student, in both academic and non-academic contexts

Your rights and responsibilities

Full range of medical services for any physical or mental health issues

University Health Service

Information on health topics, including physical/mental health, alcohol/substance use harms, and sexual assault

Health and Wellness

Any aspect of mental health, including anxiety, stress, depression, help with relationships or other life concerns, crisis services, and counselling.

Student Counselling Centre

Support services available for help regarding any aspect of student and campus life, especially safety issues

Student Support Case Management

Resources available on campus, for environmental, mental, physical, socio-cultural, and spiritual well-being

Live Well @ UofM

Help with any concerns of harassment, discrimination, or sexual assault

Respectful Work and Learning Environment

Concerns involving violence or threats, protocols for reporting, and how the university addresses them

Violent or Threatening Behaviour

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ABOUT THE INSTRUCTOR

Debbie Mortimer, B. Comm. (Hons), M. Acc., FCPA, FCGA Debbie obtained her Bachelor of Commerce Degree and Masters of Accounting Degree from The University of Manitoba and subsequently obtained her Certified General Accountant Designation. Her work experience includes 2 years of public practice, and over 21 years of lecturer/instructor experience at various universities. Currently, Debbie works at The University of Winnipeg in the Business and Administration Department of the Faculty of Business and Economics instructing various courses. She also owns her own educational consulting business, Accounting and Computer Consulting and Training Group (ACCTG). Through this business Debbie performs such work as course development, training, seminar delivery and writing engagements. She is involved with the Chartered Professional Accountant’s Association education program executing various contract work. She has been involved with the Certified General Accountants Association at both the provincial and national levels for over 15 years. At the national level, Debbie has served as a member of the National Education Committee and was involved in the development and assessment of the Professional Capstone courses. Debbie was awarded a fellowship award from the Certified General Accountants Association of Canada in 2006, the highest award given by the Association.