ACCY 303Institutions and RegulationSpring 2000
Professor: / Rajib Doogar / TA: / Keejae HongOffice: / 225C David Kinley Hall / Office: / 205 Survey
Phone: / 244-8083 / Phone: / 333-6412
E-mail: / / E-mail: /
Office hours: / Tuesday and Thursday 1:30-2:30 p.m.
(or by appointment) / Office hours: / TBA
Course url:
Required Text and Materials
(1) / SEC Regulation of Public Companies (SEC) by A. Afterman (Prentice Hall),ISBN # 0-13-037185-8
(2) / The FASB – The People, the Process, and the Politics, 4th edition (FASB) by P. Miller, R. Redding, and P. Bahnson (Irwin) ISBN# 0-256-20741-0
(3) / Financial Accounting Standards Board: Statement of Financial Accounting Concepts (SFAC)(Wiley) ISBN# 0-471-19784-X
(4) / An Introduction to Applied Professional Research for Accountants (APR) by D. Ziebart (Prentice Hall) ISBN# 0-13-755233-5
(5) / CPA Profession: Opportunities, Responsibilities, & Services (CPA) by H. Magill, G. Previts, and T. Robinson (Prentice Hall) ISBN# 0-13-737792-4
(6) / Course Readings Packet available from Dup-It, 808 S. Sixth Street, 337-7000
(7) / Assignment and Worksheet Packet available from Dup-It, 808 S. Sixth Street, 337-7000
Optional Materials
(1) / Current edition of Intermediate Accounting text, such as ones authored by Kieso and Weygandt (preferred) or Hartman, Harper, Knoblett, and ReckersCourse Abstract and Objectives
Various institutions regulate the specification and application of accounting methods. These institutions include governmental institutions, such as the Securities and Exchange Commission (SEC) and the Internal Revenue Service (IRS); as well as private institutions, such as the American Institute of Certified Public Accountants (AICPA) and the Financial Accounting Standards Board (FASB). The combined activities of these institutions have a significant and widespread influence on the practice of accounting. To succeed in the profession of accountancy, students must develop an understanding of the institutional, regulatory, and legal environment that affects accounting. In addition, students must understand the accounting rules, standards, and practices that these institutions promulgate. In order to accomplish this, students also must develop applied research skills using library services and computerized search systems.
The objectives of this course include the following:
- Understand various aspects of regulation theory and practice applied to accountancy.
- Examine regulation of accounting procedures for external reporting to the public.
- Understand the role of the CPA profession
- Examine regulation of accounting procedures in an international environment.
Upon completion of this course, the student will have a better understanding of the role of regulation in accounting. Students will be familiar with conducting applied research across a number of accounting contexts. Since this course is intended to assist the student in professional preparation, communication skills, analytical and problem-solving skills, as well as technical accounting skills, will be stressed.
My commitment to you: I recognize that you are investing time and energy in this course with the goal of improving your understanding of accounting institutions and regulation. This course has been designed explicitly to help you realize this goal. However, if at any time you feel dissatisfied with your learning in Accountancy 303, please discuss those concerns and feelings with me. You can do this after class or during office hours. In addition, you also may make an appointment to see me at a mutually convenient time. I will do my best to help you by explaining the material or by suggesting additional resources and options. I am here to help you learn.
“Project Discovery” Pedagogy
This course is part of the accounting curriculum known as “Project Discovery” (PD). Project Discovery courses are taught very differently from many other college and high school courses, which primarily employ a “Lecture/Exam” format. You are probably very good at learning within the “Lecture/Exam” format—you know how to read a textbook that delivers facts and ideas in a very concentrated manner and to take notes during a lecture that delivers facts and ideas in a similar manner. You also have learned how to memorize those facts and ideas—either by keeping up during the semester or by “cramming” just prior to exams. During the exams you primarily demonstrate this learning by reproducing the facts and ideas gained from your lecture notes and readings.
In contrast to this traditional method of learning, Project Discovery courses do not employ a “lecture/exam” format. Reading assignments are not a concentrated delivery of facts and ideas. They have one or more key points to make—they use facts and arguments to support those key points. We read articles, not to memorize the facts (as you would a textbook), but to understand the key points and to evaluate the persuasiveness of the arguments. We then discuss the readings in class. Through this discussion, an even greater understanding will be gained. When each class session is over, you should be conversant in the key ideas presented in the readings and related discussion, and be able to respond to related questions on written assignments, quizzes and examinations.
Success in this course will require that you adapt to a different way of learning. Learning in this course is not passive—you cannot wait for the professor or the textbook to “spoon-feed” you the important concepts and ideas. Learning will be active—you will learn by personal analysis of the readings and by interactions with other students and the professor; both in class and in preparation of individual and group assignments.
Success in this course requires reading all assigned articles before class. Without reading the assigned readings, the class discussion will be incomprehensible. In addition, you will not be able to meaningfully participate in the discussion (class participation represents a significant portion of your grade). In addition, since so much of the learning occurs through class discussion and debate, attendance in class is paramount to your success.
Class Routine
Classes will be conducted using lectures, discussions, active learning exercises, and student presentations. Each student is expected to be prepared: study the assigned reading material, prepare the homework assignment, and participate fully in discussions and learning exercises. In group assignments, all members are expected to contribute equally. Poor performance in this class is generally linked to inadequate preparation for class meetings.
Grading
Points will be allocated as follows:
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ACCY 303Institutions and RegulationSpring 2000
Written Assignments (20 points each unless indicated otherwise)Reaction Paper 1
SEC Internet Assignment (10 points)
Reaction Paper 2
Reaction Paper 3 Reaction Paper 4 / 90
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ACCY 303Institutions and RegulationSpring 2000
In-Class Assignments (7 out of 8 @ 20 points each)5 Pause/Reflection Exercises
3 Applied Research Exercises / 140
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ACCY 303Institutions and RegulationSpring 2000
Quiz Question Preparation (8 out of 9 @ 5 points each) / 40Quizzes (3 @ 50 points each) / 150
Group Project Presentations (3 @ 30 points each)
Comment Letter
Applied Research Project 1
Applied Research Project 2 / 90
Group Project Written Reports (3 @ 50 points each)
Comment Letter
Applied Research Project 1
Applied Research Project 2 / 150
Class Participation / 100
Final Exam / 240
Total / 1000
Final grades will be based on the sum of the points earned on these components applied to a final grade scale.
Format of Written Assignments
All written assignments must be typed (or computer printed), double-spaced (unless explicitly stated otherwise), with one inch margins, using a 10 or 12 character per inch font. Maximum lengths for each assignment will be designated.
Group Projects
During the semester three group projects will be assigned. The instructor will assign students to groups with a goal that each student will work with another student no more than one time during the semester. Thus, groups will vary across each individual project. Peer evaluations will be used to determine each member’s contribution to the group project.
In-Class Participation
A substantial portion of your grade is earned via in-class participation. Class participation can be earned in several ways—active participation in class discussions, volunteering a response to instructor questions, asking a pertinent question during lecture/discussion, or responding to an instructor “cold call.” Class participation grades will be based on (1) daily class participation reports, and (2) peer evaluation. No class participation points are earned merely by attending class. In addition, missing class will adversely affect your class participation grade.
Final Examination
The final exam will be comprehensive. Students from multiple sections of ACCY 303 will be taking the final exam at the same time. As a result, the time and date of the final will probably not be the time and date given in the university timetable. Students wishing to take a conflict exam for the final must sign up with me prior to the last day of class and must demonstrate that a legitimate conflict exists. Students should plan on remaining in town through the scheduled final exam date—no one will be excused from the final due to travel plans.
Late Assignments
A grade of zero will be assigned to anyone who fails to submit an assignment on time or misses a quiz without prior permission from the instructor.
Grading Disputes
If you believe that there is an error in the scoring of any assignment, you must submit a written request for re-grading within one week from the time the assignment is returned in class.
Academic Honesty
The Code on Campus Affairs and Handbook of Policies and Regulations Applying to All Students (August 1997), Section 33, states: “It is the responsibility of the student to refrain from infractions of academic integrity, from conduct that may lead to suspicion of such infractions, and from conduct that aids others in such infractions. It is the responsibility of the faculty to establish and maintain an environment that supports academic integrity.” I will fulfill my responsibility in this regard, and I expect you will fulfill yours.
A hallmark of the accountancy profession is integrity and honesty.
Course Packet Readings
Reading #1:
Foster, G., Financial Statement Analysis, Prentice-Hall: Englewood Cliffs, NJ, Chapter 1: “The Demand for Financial Statement Information.” pp. 1-15.
Foster, G., Financial Statement Analysis, Prentice-Hall: Englewood Cliffs, NJ, Chapter 2: “The Supply of Financial Statement Information.” pp. 23-45.
Reading #2:
Lee, T., “A Systematic View of the History of the World of Accounting,” Accounting, Business and Financial History, Vol. 1, No. 1, 1990, pp. 73-107.
Reading #3:
Sunder, S., “Political Economy of Accounting Standards,” Journal of Accounting Literature, Vol. 7, 1988, pp. 31-41.
Reading #4:
Lev, B., “Toward a Theory of Equitable and Efficient Accounting Policy,” The Accounting Review, Vol. 63, No. 1, January 1988, pp. 1-22.
Reading #5:
Barnes, F., “Saint FASB,” Mediacritic, Vol. 2, No. 3, Spring 1995.
Reading #6:
Options Controversy - Trade Associations Letter.
Statement of Douglas L. Maine, Senior Vice President and CFO, MCI Communications Corporation, October 21, 1993, on behalf of the Coalition for American Equity Expansion, before the Senate Subcommittee on Securities, Senate Committee on Banking, Housing, and Urban Affairs
Letter to Arthur Levitt Jr., SEC Chairman, dated November 29, 1993, from Dennis R. Beresford, Chairman, FASB
Reading #7:
Lieberman Bill
Reading #8:
Linsmeier, T., “Securities and Exchange Commission: Research, Teaching and Career Opportunities,” Accounting Horizons, September 1996, pp. 130-136.
Reading #9:
Graul, L., “SEC Compliance and Research,” excerpts from “Guide to SEC Reporting,” a course developed for the AICPA
Reading #10:
Loomis, C., “Cracking the Derivatives Case,” Fortune, March 20, 1995, pp. 50-68.
“Basic Derivatives” Kieso, D. and J. Weygandt, Intermediate Accounting, 8ed, Wiley Publishing (1995), pp. 697-698.
Reading #11:
Gibson Settlement
Reading #12:
Simpson, E., and J. Anania, “Stock Compensation,” FASB Viewpoints, FASB, December 31, 1992.
Comment Letters
Reading #13:
Zeff, S., “The Rise of ‘Economic Consequences’,” The Journal of Accountancy, December 1978, pp. 56-63.
Reading #14:
Wallman, S., “The Future of Accounting and Financial Reporting Part II: The Colorized Approach,” Accounting Horizons, Vol. 10, No. 2, June 1996, pp. 138-148.
Reading #15:
Remarks of Dennis R. Beresford to the AICPA National Conference on Current SEC Developments, January 10, 1995.
Reading #16:
Kieso, D. and J. Weygandt, Intermediate Accounting, 9ed, Wiley Publishing (1997), Chapter 3.
Reading #17:
Tidrick, D., “Facing Off on FASB,” Today’s CPA, April, 1997, pp. 32-37
Reading #18:
Dilley, S., R. Hayes, and P. Steinbart, “Development of a Paradigm for Applied Accounting Research: A Way of Coping with Subject-Matter Complexity,” The Accounting Review, Vol. 63, No. 2, April 1983, pp. 405-416.
Reading #19:
Fleming, P., “The Growing Importance of International Accounting Standards,” Journal of Accountancy, September 1991, pp. 100-106.
Reading #20:
Mueller, G., et al., “An International Perspective on Financial Accounting,” Chapter 1 of Accounting, An International Perspective, Fourth Edition (Irwin, 1997), pp. 1-19.
Mueller, G., et al., “Diversity in Financial Accounting Practices,” Chapter 2 of Accounting, An International Perspective, Fourth Edition (Irwin, 1997), pp. 20-33.
Reading #21:
Baetge, J., et al., “Working Group on External Financial Reporting of the Schmalenbach-Gesellschaft-Deutsche Gesellschaft für Betriebswirtschaft,” Accounting Horizons, Vol. 9, No. 3, September 1995, pp. 92-99.
Reading #22:
Schweikart, J., S. Gray, and S. Salter, “An Interview with Sir Bryan Carsberg, Secretary-General of the International Accounting Standards Committee,” Accounting Horizons, Vol. 10, No. 1, March 1996, pp. 110-117.
Reading #23:
Biddle, G., and S. Saudagaran, “Foreign Stock Listings: Benefits, Costs, and the Accounting Policy Dilemma,” Accounting Horizons, September 1991, pp. 69-80.
Reading #24:
Sutton, M., “Financial Reporting in US Capital Markets: International Dimensions,” Accounting Horizons, June 1997, pp. 96-102.
Reading #25:
Greene, R., and K. Barrett, “Auditing the Accounting Firms,” FW, September 27, 1994, pp. 30-55.
Reading #26:
AICPA Case Study 95-19: “When is Resignation Not Enough—An Ethical Dilemma”
Reading #27:
Sutton, M., “Auditor Independence: The Challenge of Fact and Appearance,” Accounting Horizons, Vol. 11, No. 1, March 1997, pp. 86-91.
Reading #28:
The “Kirk Report”: “Strengthening the Professionalism of the Independent Auditor,” Report to the Public Oversight Board of the SEC Practice Section, AICPA from the Advisory Panel on Auditor Independence, September 13, 1994.
Reading #29:
Waldman, S.M.H., “The Future of Accounting, Part III: Reliability and Auditor Independence,” Accounting Horizons, Vol. 10, No. 4, December 1996, pp. 76-97.
Antle, R., “Accounting Firms, the Accounting Industry, and Accounting Research,” British Accounting Review, Vol. 31, No 1, 1999, pp. 1-13.
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ACCY 303Institutions and RegulationSpring 2000
Course Schedule & Assignments
This is the tentative schedule for the semester. At times your section might be slightly ahead or behind.
Session / Date / Topics / Reading Assignments / Assignments DueCourse Overview and Introduction
1 / TU 1/18 /
- Introduction to the Course
- Video - Rally in the Valley
General Aspects of Regulation Applied to Accounting
2 / TH 1/20 /
- Demand for and Supply of Financial Statement Information
- Asymmetric Information, Contracting Difficulties, and Regulation
- Assign SEC Internet Project
- Reading #1: Foster chapters 1 & 2
- In-class pause/reflection exercise 1
3 / TU 1/25 /
- History of Accounting, Separation of Ownership and Management, and Accounting as a Public Good
- Constituencies and Conflicting Preferences
- Assign Reaction Paper 1 on Reading #4
- Reading #2: Lee
- Reading #3: Sunder
Regulatory Players - Congress and the Securities and Exchange Commission
4 / TH 1/27 /
- Capital Markets and the Role of Accounting Information in Establishing “Fairness”
- Introduction to the Securities and Exchange Commission
- Reading #4: Lev
- SEC Regulation of Public Companies (SEC), Chapters 1 & 2.
- Prepare 4 (2 for each chapter) multiple choice questions on the assigned SEC reading.
- Reaction paper 1
5 / TU 2/1 /
- SEC, the Accounting Profession, and Commerce
- SEC Chapters 3, 4, & 5
- Reading #5: Barnes
- Readings #6: Trade Association Letter; Maine Statement before U.S. Senate; Beresford Letter
- Reading #7: Lieberman Bill
- Reading # 9: Graul (reference for later use; skim only)
- Prepare 6 (2 each chapter) multiple choice questions on the assigned SEC reading.
- In-class pause/reflection exercise 2
6 / TH 2/3 /
- SEC Compliance and Enforcement
- Reading #10: Loomis; Basic Derivatives; Kieso & Weygandt
- Reading #11: Gibson Settlement
- SEC Internet assignment due
Regulatory Players - Financial Accounting Standards Board
7 / TU 2/8 /
- Introduction to the Financial Accounting Standards Board
- View FASB Video
- Assign Reaction Paper 2 on Reading #13
- Quiz #1 on SEC
- The FASB – The People, the Process, and the Politics (FASB), Chapters 1 & 2.
- “Facts About FASB,” (download from Internet—See APR pg. 34)
- Prepare 4 (2 each chapter) multiple choice questions on the assigned FASB reading.
8 / TH 2/10 /
- Due Process and the FASB
- FASB Chapter 3
- Reading #12: Simpson & Anania; Comment Letters
- Reading #13: Zeff
- Prepare 2 multiple choice questions on the assigned FASB reading
- Reaction paper 2
- In-class pause/reflection exercise 3
9 / TU 2/15 /
- The Conceptual Framework – Introduction and Financial Statement Elements
- FASB Chapter 4
- Financial Accounting Standards Board: Statement of Financial Accounting Concepts (SFAC) #6, “Elements of Financial Statements.”
- Prepare 2 multiple choice questions on the assigned FASB reading.
10 / TH 2/17 /
- The Conceptual Framework – Qualitative Characteristics
- Assign Comment Letter Group Project
- SFAC #2, “Qualitative Characteristics of Accounting Information”
11 / TU 2/22 /
- The Conceptual Framework – Recognition and Measurement
- SFAC #5, “Recognition and Measurement in Financial Statements.”
- Reading #14 – Wallman
12 / TH 2/24 /
- The Conceptual Framework – Current Issues
- FASB Chapter 5 & 6
- Reading #15: Beresford Speech
- Prepare 4 (2 for each chapter) multiple choice questions on the assigned FASB reading.
- In-class pause/reflection exercise 4
Regulatory Players - Preparers of Financial Statements
13 / TU 2/29 /
- Review of the Accounting Cycle
- Reading #16: Kieso & Weygandt Ch. 3
- Accounting Cycle Review Problem
14 / TH 3/2 /
- Group Presentations - Comment Letters Project
- Assign Applied Research Group Project 1
- Reading #17: Tidrick
- Written report of group comment letter analysis
15 / TU 3/7 /
- Group Presentations - Comment Letters Project
16 / TH 3/9 /
- Quiz #2 on FASB
- Introduction to Applied Professional Research
- Reading #18: Dilley, Hayes, and Steinbart
- Applied Professional Research for Accountants (APR) Chapters 1 and 3
3/14&3/16 / Spring Break
17 / TU 3/21 /
- Defining the Applied Research Process - Examples
- APR Chapter 5
- In-class applied research exercise 1
18 / TH 3/23 /
- Applied Research Practice
- In-class applied research exercise 2
19 / TU 3/28 /
- Applied Research Case Presentations
- Written report of group applied research project 1
20 / TH 3/30 /
- Applied Research Case Presentations
Application of a Regulatory Framework to International Accounting Issues
21 / TU 4/4 /
- International Accounting Standards
- Assign Reaction Paper 3 on Either Reading #23 or Reading #24
- Reading #19: Fleming
- Reading #20: Mueller, Gernon, & Meek, Chapters 1 & 2
- Reading #21: Baetge, et al.
- Reading #22: Schweikart, Gray, & Salter
22 / TH 4/6 /
- Regulation of Foreign Stock Listings on U.S. Markets
- Assign Applied Research Group Project 2
- SEC Chapter 9
- Reading #23: Biddle and Saudagaran
- Reading #24: Sutton
- Reaction Paper 3
Regulatory Players - The Accountancy Profession
23 / TU 4/11 /
- Accountancy as a Profession; Professional Responsibilities
- The CPA Profession: Opportunities, Responsibilities, and Services (CPA) by Magill, Previts, and Robinson, Chapters 1 & 6
- Readings #25: Greene & Barrett
- Readings #26: AICPA Case 95-10
- Prepare 4 (2 each reading) multiple choice questions on Chap 6 (CPA) & Reading #25.
- In-class applied research exercise 3
24 / TH 4/13 /
- Legal, Regulatory & Business Environment
- View Video: “Cooking the Books”
- CPA Chapters 4, 5 (pp 77-93 only), & 7
- Prepare 4 (2 each chapter) multiple choice questions on chapters 4 and 7 (CPA).
25 / TU 4/18 /
- The Regulation of Independence
- CPA Chapter 8
- Reading #27: Sutton
- Reading #28: The Kirk Report
- Prepare 4 (2 each reading) multiple choice questions on chapter 8 (CPA) and reading #27.
- In-class pause/reflection exercise 5
26 / TH 4/20 /
- The Economics of Auditor Independence
- Reading #29: Waldman, Antle
- Reaction Paper 4
27 / TU 4/25 /
- Quiz #3 on CPA Profession
- Complex Transactions
- APR Chapter 6
- Written report for the group applied research project 2
28 / TH 4/27 /
- Applied Research Presentations
29 / TU 5/2 /
- Applied Research Presentations
Final / Date, time and location to be announced
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