Professor: Rajib Doogar
Office: 343C Wohlers Hall
Telephone: (217) 244-8083
E-mail: doogar@uiuc.edu
Office hours: Tuesday, Thursday 9:00 AM – 10:00 AM (or by appointment)
Optional Materials:
Current edition of an Intermediate Accounting textbook such as Kieso and Weygandt.
Course 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 pervasive 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 must also develop applied research skills using library services and computerized search systems.
The objectives of the course include the following:
1. Understand various aspects of regulation theory and practice applied to accountancy.
2. Examine regulation of accounting procedures for external reporting to the public.
3. Understand the role of the CPA profession.
4. Understand regulation of accounting procedures in an international environment.
5. Explore the fundamentals of regulation of accounting procedures in taxation.
Upon completion of the course, students 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 students in professional preparation, communication, analytical and problem-solving skills, as well as technical accounting skills will be emphasized.
My commitment to you:
You are investing a lot of time and energy to improve your understanding of accounting institutions and regulation. The course has been designed to help you do this. If, at any time, you feel dissatisfied with your understanding of the course, please discuss your concerns and feelings with me. You may do this either after class, or during office hours. You may also make an appointment to see me at a mutually agreeable 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 called “Project Discovery” (PD). PD courses are taught very differently from many other high school and college courses, which primarily employ a “Lecture/Exam” format. You are likely to be excellent at learning within the “Lecture/Exam” format. You know how to read a textbook that delivers facts and ideas in a concentrated manner and take notes during a lecture that delivers facts and ideas in a similar manner. You have also learned how to memorize those facts and ideas, either by keeping up during the semester, or by “cramming” just prior to exams. The purpose of the exams is to have you demonstrate what you have learned by requiring you to reproduce the facts and ideas you have gotten from the textbook and lectures.
In contrast to this traditional method of pedagogy, PD courses do not use 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 ideas to support these key points. You read articles, not to memorize the facts, but to understand the key points and to evaluate the persuasiveness of the arguments. We then discuss the readings in class. Through this discussion, you will gain an even greater understanding of the key points. 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 requires that you adapt to a different way of learning. Learning in this course is not passive. You cannot wait for either the textbook or me to “spoon-feed” you the important concepts and ideas. Learning is active. You learn by personal analysis of the readings and by interaction with other students and me, both in class and in preparation of individual and group assignments.
Success in this course requires you to read all assigned articles before class. If you do not read the assigned readings before class, you will have no idea of what is being discussed. In addition, you will not be able to participate in the class discussion in a meaningful way. (Note that class participation represents a significant part of your grade in the course.) Because so much of the learning occurs during class discussion and debate, attendance in class is crucial to your success in the course.
Class Routine:
Classes will be conducted using
lectures, discussions, active learning exercises, and student
presentations. You are expected to be
prepared. Study the assigned reading
material, prepare the homework assignments and participate fully in discussions
and learning exercises. All members of
a group are expected to contribute equally to group assignments. Poor
performance in the course is usually linked to inadequate preparation for class
meetings.
Grading:
Points will be allocated as follows:
|
Written Assignments (20 points each unless otherwise indicated) Reaction Paper 1 Reaction Paper 2 Reaction Paper 3 SEC Internet Assignment (5 points) Reaction Paper 4 Seagram and Du Pont Tax Assignment (30 points) Exxon Comment Letter Assignment (30 points) |
145 |
|
In-Class Assignments (8 out of 9 @ 10 points each) 6 Pause/Reflection Exercises 1 Tax Research Exercise 2 Applied Research Exercises |
80 |
|
Quiz Question Preparation (9 out of 10@ 5 points each) |
45 |
|
Quizzes (3 @ 50 points each) |
150 |
|
Group Project Presentations (3 @ 30 points each) Comment Letter Project SEC Testimony Project Applied Research Project |
90 |
|
Group Project Written Reports (3 @ 50 points each) Comment Letter Project SEC Testimony Project Applied Research Project |
150 |
|
Class Participation |
100 |
|
Final Examination |
240 |
Total |
1,000 |
Your final grade 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 length for each assignment will be designated.
Group Projects:
I will assign three group projects during the semester. Students will be assigned to groups with the goal that each student will work with another student only once during the semester. Accordingly, groups will change for each group project. I will use peer evaluations to determine each member’s contribution to the group project.
In-Class Participation:
10% of your grade will be earned
through in-class participation. Class
participation can be earned in several ways; active participation in class discussions,
volunteering a response to my questions, asking a relevant question during
lecture/discussion, or responding if I call on you. Class participation grades will be based on (1) daily class
participation reports and (2) peer evaluation.
No class participation points
will be 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 all sections of ACCY 303 will be taking the final exam at the same
time. Accordingly, the time and date of
the final will probably not be one shown in the University timetable. Students who need to take a conflict exam
for the final must notify me prior to the last day of class and demonstrate
that a legitimate conflict exists. Plan
to be in town through the scheduled final exam date. No one will be excused
from the final because of travel plans.
Late Assignments:
No
credit or make-ups will be given for late or missed assignments. If you miss an assignment because either you
are ill (and have a note from a doctor or nurse) or a death in the family, your
grade for the missed assignment will be the average grade earned for similar
assignments actually handed in. In all
other cases, your grade on a missed assignment will be 0 (zero).
Grading Disputes:
If you believe that there is an error in the grading of any assignment, you must submit a written request for regrading within one week from the day the assignment is returned in class. The request must give a detailed explanation of what you believe the grading error to be and an explanation of why you believe your answer is correct.
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 fully expect you to fulfill yours.
A hallmark of the accountancy profession is integrity and honesty!!
Course Packet Readings
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.
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.
Sunder, S., “Political Economy of Accounting Standards,” Journal of Accounting Literature, Vol. 7, 1988, pp. 31-41.
Lev, B., “Toward a Theory of Equitable and Efficient Accounting Policy,” The Accounting Review, Vol. 63, No. 1, January 1988, pp. 1-22.
Greene, R., and K. Barrett, “Auditing the Accounting Firms,” FW, September 27, 1994, pp. 30-55.
AICPA Case Study 95-19: “When is Resignation Not Enough—An Ethical Dilemma”
Sutton, M., “Auditor Independence: The Challenge of Fact and Appearance,” Accounting Horizons, Vol. 11, No. 1, March 1997, pp. 86-91.
The Panel on Audit Effectiveness Report http://www.pobauditpanel.org. Read the following:
1. Prefatory Material: http://www.pobauditpanel.org/downloads/prefatory.pdf
2.
Chapter 1
Introduction: http://www.pobauditpanel.org/downloads/chapter1.pdf
3.
Chapter 5
Independence: http://www.pobauditpanel.org/downloads/chapter5.pdf
4.
Chapter 6
Governance: http://www.pobauditpanel.org/downloads/chapter6.pdf
5.
Chapter 7
International: http://www.pobauditpanel.org/downloads/chapter7.pdf
Wallman, 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.
Simpson, E., and J. Anania, “Stock Compensation,” FASB Viewpoints, FASB, December 31, 1992.
Comment Letters
Zeff, S., “The Rise of ‘Economic Consequences’,” The Journal of Accountancy, December 1978, pp. 56-63.
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.
Remarks of Dennis R. Beresford to the AICPA National Conference on Current SEC Developments, January 10, 1995.Loomis, C., “Cracking the Derivatives Case,” Fortune, March 20, 1995, pp. 50-68.
Barnes, F., “Saint FASB,” Mediacritic, Vol. 2, No. 3, Spring 1995.
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
Lieberman Bill
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.
Gibson Settlement
SEC Proposal to Revise Rules on Auditor Independence
1. Fact sheet: http://www.sec.gov/news/extra/audfact.htm
2. Statement by SEC Chairman Levitt: http://www.sec.gov/news/extra/audalvt.htm
3. Proposed Rules: http://www.sec.gov/rules/proposed/34-42994.htm
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.
Biddle, G., and S. Saudagaran, “Foreign Stock Listings: Benefits, Costs, and the Accounting Policy Dilemma,” Accounting Horizons, September 1991, pp. 69-80.
Sutton, M., “Financial Reporting in US Capital Markets: International Dimensions,” Accounting Horizons, June 1997, pp. 96-102.
Graetz, M., “It’s a Sin to Get a Mexican Divorce” Chapter 2 in The Decline (and Fall?) of the Income Tax Norton, New York, 1997.
Internal Revenue Code §§ 302(a) and(b), 243(a)(1), 11(b), 1201(a), 1(c) and (h).
Erickson, M. and S. Wang “Exploiting and sharing tax benefits: Seagram and Du Pont” Working Paper and attached questions.
Trueblood Case 94-5 “A No Cost Deferred Compensation Arrangement”
Exxon Comment Letter
This is the tentative
schedule for the semester. At times
your section might be slightly ahead or behind.
|
Session |
Date |
Topics |
Reading Assignments |
Assignments Due |
|
Course
Overview and Introduction |
||||
|
1 |
TU 1/16 |
·
Introduction
to the Course ·
Video -
Rally in the Valley |
|
|
|
General
Aspects of Regulation Applied to Accounting |
||||
|
2 |
TH 1/18 |
·
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 1/23 |
·
History
of Accounting, Separation of Ownership and Management, and Accounting as a
Public Good ·
Constituencies
and Conflicting Preferences ·
Assign
Reaction Paper 1 on Lev |
·
Reading
#2: Lee ·
Reading
#3: Sunder |
|
|
Regulatory
Players - The Accountancy Profession |
||||
|
4 |
TH 1/25 |
·
Capital
Markets and the Role of Accounting Information in Establishing “Fairness” ·
Accountancy
as a Profession; Professional Responsibilities |
·
Reading
#4: Lev ·
The CPA Profession: Opportunities, Responsibilities, and
Services (CPA) by
Magill, Previts, and Robinson, Chapters 1 & 6 ·
Readings
#5: Greene & Barrett ·
Readings
#6: AICPA Case 95-10 |
·
Prepare 4
(2 each reading) multiple choice questions on Chap 6 (CPA) & Reading #5. ·
Reaction
paper 1 on Lev. |
|
5 |
TU 1/30 |
·
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). |
|
6 |
TH 2/1 |
·
The
Regulation of Independence ·
Assign
Reaction Paper 2 on Antle |
·
CPA Chapter 8 ·
Reading
#7: Sutton ·
Reading
#8: POB Report |
·
Prepare 4
(2 each reading) multiple choice questions on chapter 8 (CPA) and reading #7. ·
In-class
pause/reflection exercise 2 |
|
7 |
TU 2/6 |
·
The
Economics of Auditor Independence |
·
Reading
#9: Wallman, Antle |
·
Reaction
Paper 2 on Antle. |
|
Regulatory
Players – FASB |
||||
|
8 |
TH 2/8 |
·
Introduction
to the Financial Accounting Standards Board ·
View FASB
Video ·
Assign
Reaction Paper 3 on Zeff ·
Quiz #1 on CPA
Profession |
·
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. |
|
9 |
TU 2/13 |
·
Due
Process and the FASB ·
Assign
Comment Letter Group Project |
·
FASB Chapter 3 ·
Reading
#10: Simpson & Anania; Comment Letters ·
Reading
#11: Zeff |
·
Prepare 2
multiple choice questions on the assigned FASB
reading ·
Reaction
paper 3 on Zeff ·
In-class
pause/reflection exercise 3 |
|
10 |
TH 2/15 |
·
The
Conceptual Framework – Introduction and Financial Statement Elements |
·
FASB Chapter 4 ·
Read APR,
pp.56-58. Access FARS and read Statement of Financial Accounting Concepts
(CON) #6, “Elements of Financial
Statements.” |
·
Prepare 2
multiple choice questions on the assigned FASB
reading. |
|
11 |
TU 2/20 |
·
The
Conceptual Framework – Qualitative Characteristics |
·
Access
FARS and read CON #2, “Qualitative
Characteristics of Accounting Information” ·
Access FARS and read CON #5, “Recognition and Measurement in Financial Statements.” |
|
|
12 |
TH 2/22 |
·
The
Conceptual Framework – Current Issues |
·
FASB Chapter 5 & 6 ·
Reading
#12 – Wallman ·
Reading
#13: Beresford Speech |
·
Prepare 4
(2 for each chapter) multiple choice questions on the assigned FASB reading. ·
In-class
pause/reflection exercise 4 |
|
13 |
TU 2/27 |
·
Group
Presentations - Comment Letter Project |
|
·
Written
report of group comment letter
project |
|
Regulatory
Players - Congress and the Securities and Exchange Commission |
||||
|
14 |
TH
3/1 |
·
Quiz #2 on FASB ·
Introduction
to the Securities and Exchange Commission ·
Assign
SEC Testimony Project |
·
SEC Regulation of Public Companies (SEC),
Chapters 1 & 2. |
·
Prepare 4
(2 for each chapter) multiple choice questions on the assigned SEC reading. |
|
15 |
TU 3/6 |
·
SEC, the
Accounting Profession, and Commerce |
·
SEC Chapters 3, 4, & 5 ·
Reading
#14: Barnes ·
Readings
#15: Trade Association Letter; Maine
Statement before U.S. Senate; Beresford Letter ·
Reading
#16: Lieberman Bill |
·
Prepare 6
(2 each chapter) multiple choice questions on the assigned SEC reading. ·
In-class
pause/reflection exercise 5 |
|
16 |
TH 3/8 |
·
SEC
Compliance and Enforcement |
·
Reading
#17 Loomis; Basic Derivatives; Kieso
& Weygandt ·
Reading
#18 Gibson Settlement |
·
SEC
Internet assignment due |
|
Tu 3/13, Th 3/15 |
·
Spring Break |
·
None |
·
None |
|
|
17 |
TU 3/20 |
·
Regulating
the Accounting Profession ·
Assign
Reaction Paper 4on Either Reading #21or Reading #22 |
·
Reading
#19 SEC.Auditor Independence Rules Change Proposal |
·
Prepare 6
multiple choice questions on the assigned SEC
reading. |
|
18 |
TH 3/22 |
·
International
Accounting Standards ·
Regulation
of Foreign Stock Listings on U.S. Markets |
·
SEC Chapter 9 ·
Reading
#20 Mueller, Gernon, & Meek,
Chapters 1 & 2 ·
Reading
#21 Biddle and Saudagaran ·
Reading
#22 Sutton |
·
Reaction
Paper 4 on Reading #21 or Reading #22 |
|
19 |
TU 3/27 |
·
Group
Presentations – SEC Testimony Project |
|
·
Written
Report of group SEC testimony project |
|
Other
Regulatory Influences – Taxes |
||||
|
20 |
TH
3/29 |
·
Quiz #3 on SEC ·
Economic
Consequences of Taxes |
·
Reading
#23 Graetz |
·
In-class
pause/reflection exercise 6 |
|
21 |
TU 4/3 |
·
Taxes and
the Form of Transactions ·
Assign
Tax Case |
·
Reading
#24 Redemption Readings |
·
In-class
Tax Research Exercise |
|
22 |
TH
4/5 |
·
Applying
the Tax Regulatory Framework |
·
Reading
#25 Erickson and Wang |
·
Answer
questions on Erickson and Wang |
Applied
Professional Research: Applying FASB Standards |
||||
|
23 |
TU 4/10 |
·
Introduction
to Applied Professional Research ·
Assign
Applied Research Group Project |
·
Applied Professional Research for
Accountants (APR)
Chapters 1 and 3 |
|
|
24 |
TH
4/12 |
·
Defining
the Applied Research Process – Examples |
·
APR Chapter 5 |
·
In-class
applied research exercise 1 |
|
25 |
TU 4/17 |
·
Complex Transactions |
·
APR Chapter 6 ·
Reading #26
Trueblood Case 94-5 |
·
Prepare
“A No Cost Deferred Compensation Arrangement” Assignment ·
In-class
applied research exercise 2 |
|
26 |
TH
4/19 |
·
Applied
Research Applications |
·
Sample
FASB Cases |
·
|
|
27 |
TU 4/24 |
·
Integrating
across Frameworks |
·
Reading
#27 Exxon Comment Letter |
·
Prepare
Exxon Assignment |
|
28 |
TH
4/26 |
·
Applied
Research Presentations |
|
·
Written
report for group applied research project |
|
29 |
TU
5/1 |
·
Review |
|
|
|
Final |
|
Date, time and location to be announced |
|
|