• Semester 1 (External)

Synopsis

This unit examines contemporary theories of accounting and focuses  on
their  implications  for  accounting  practice.  The  unit  introduces
accounting  decisions  and examines the relationship  between  theory,
research  and practice.  It introduces capital markets-based  theories
and associated research which examine the association between earnings
announcements and share market rates of return. This area is important
for  an  advanced understanding of the relevance of accounting reports
for  capital  market participants, the prediction of future  earnings,
and  the  implication of earnings - price relationships for accounting
standard  setters. The unit also examines the development of contract-
based  research  and  draws  out  its  implications  for  professional
accounting   practices,  and  for  the  regulation  of  practices   by
professional accounting bodies and corporate regulators. Finally,  the
social  and environmental implications of accounting are addressed.  A
review  of  current requirements to report on social and environmental
issues   is   undertaken,  together  with  a  discussion  of   various
theoretical perspectives which explain the accountability of  business
to   members  of  society  beyond  just  shareholders.   The  role  of
regulation in accounting is also examined.