ACCOUNTING 5120
FINANCIAL REPORTING II
FALL 2003
Class Meetings:
MW 4:20 – 5:40 PM
Instructor:
David Plumlee, Ph.D., C.P.A.
Office: KDGB 108
Office hours:
M,W 2-3 PM; or stop by other times,
or by appointment
Telephone:
Fax:
Office 585-9466
Home 582-8873 (for
emergency use only)
Office 581-7214
E-Mail:
actdp@business.utah.edu
Course Materials:
Required Textbook:
Intermediate Accounting, Kieso & Weygandt, Tenth Edition, Wiley
Required reading for each team (allocated among team members):
Wall Street Journal
Business Week
Fortune Magazine
COURSE OBJECTIVES
The overall objective of this course is to enhance your understanding of :
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the accountant’s role in providing financial accounting information,
the theory and processes underlying that information and
the relevance of that information to various user groups.
The presumption is that you will likely pursue a career in accounting, that you are in
charge of developing that career, and your goal is to be a vital member of the
management and decision making team in a public accounting firm, private industry,
government or a not-for-profit organization. Although the development of your technical
skills is critical, it is not the only skill necessary for you to be successful. Interpersonal
skills, analytical and problem solving skills and written and oral communication skills are
critical success factors and will be emphasized.
Accounting 5110 and 5120 were designed as a unit to develop your capability to:
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Identify the major issues surrounding business events and transactions.
Assess the economic consequences of those events and transactions.
Identify the accounting issues related to those events and transactions.
Identify and research the appropriate accounting literature to formulate a
position on the accounting for those events and transactions.
Evaluate the alternative accounting approaches implied by the literature
Select the accounting that best reflects the underlying economics of the
transaction or event and is consistent with the current authoritative literature
Read and understand the content of a corporate annual report and SEC Form
10-K regarding the reporting entity’s financial flexibility, risk, and operating
capability.
With respect to ACCTG 5120 specifically, the focus will be on the following:
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Build on the foundation of accounting knowledge, research and thought
processes gained in ACCTG 5110.
Gain in-depth knowledge of the underlying economic impact of specific,
complex transactions.
Understand the conceptual basis of the accounting and reporting for these
transactions.
Develop an understanding of the mechanical aspects of accounting for the
transactions in line with the underlying concepts.
SKILLS DEVELOPMENT
As mentioned above there are numerous skills that will be critical to your success. The
following is a discussion of each of those skills and the role that this course is designed to
play in the development of each.
Technical competence
Many people would select technical skills as those they think of first when asked to
identify the skills they would associate with someone who is an accountant
Undoubtedly, our technical skills are those that make us unique, just as those of a doctor,
lawyer or engineer. Therefore, there will be a great deal of emphasis on developing
technical skills in this course and other advanced courses in accounting. The
development and existence of these skills does not imply that you will be a walking
encyclopedia of authoritative literature. Rather, it means that you should be able to
analyze business transactions and events, assess the underlying motivation and
economics and rely on your understanding of the underlying accounting theories to
develop a rationale for the appropriate accounting treatment that will reflect the true
financial effect. Homework assignments and quizzes will be designed to test your
technical competence.
Analytical and Problem Solving Abilities
Implicit in the above discussion on technical competence is the ability to think critically
about an issue, i.e., to not accept something at face value, but rather to ask whether what
you see or hear makes sense, given your knowledge and the facts that you gather. It is
important to positively challenge a new transaction or unusual event so that you can reach
your own professional judgment regarding the nature, substance and economic effect of
transactions and events. This is the only way you can satisfy yourself as to the
appropriateness of the accounting treatment. To successfully accomplish this you must
understand the nature of the business, the economic environment in which it operates, the
facts regarding the transaction or event, the underlying theoretical issues and have the
ability to access and apply the accounting literature. Case study assignments, discussions
regarding current events and some quiz questions will be designed to test these abilities.
In preparing cases, you will be expected to identify the major issues, search the
appropriate literature, identify the possible approaches to account for the transaction or
event, evaluate the effects of each of those approaches, justify the selection of an
approach or explain why several approaches each seem to have merit.
Written and Oral Communication
Even if you possess technical competence, and you are excellent at analyzing and solving
problems, if you lack the ability to clearly express your conclusions and the basis for
reaching them you cannot be successful. Whether it is communicating with your client,
top management of your company, or your investors, you must be able to convey the
value and significance of your work and the soundness of your judgments and
recommendations. When you complete your education you will possess more technical
knowledge about accounting then the vast majority of people in this country, including
management, investors and creditors. They will not have a very deep understanding of
your area of expertise and the terminology that we as accountants take for granted.
Therefore, one of your primary responsibilities will be to communicate with them in
laymen’s language. Again, the case studies, in class discussions and participation will
test these skills.
Professionalism
One of the characteristics of accounting is that those who enter it as a career are viewed
as being members of a very distinct profession, just as those who become attorneys or
doctors. Also, just as the legal and medical professions, members of the accounting
profession are held to very high ethical and professional standards. Therefore, as future
entrants to the profession you will be expected to adhere to high standards. Those
expectations include, timely submission of legible work, regular and timely attendance of
classes, mature and respectful behavior towards your classmates and me, individual effort
and preparation of your assignments other than group projects, fair contributions of effort
to all team efforts and accountability for your actions.
LEARNING AND THE CLASSROOM EXPERIENCE
Learning does not take place only in the classroom. It also does not occur simply through
lectures. The learning experience is the sum of all the activities that relate to this course,
i.e., reading the assigned material before class, working the homework assignments, inclass discussions and work within your teams. The best way to learn is to do, not simply
to listen. Therefore, the true learning experience places a great deal of the responsibility
for learning on you, I am only a facilitator for that learning. My role is to create the
appropriate environment for learning and be a guide and mentor as you move through the
experience. I take that responsibility very seriously, and I expect you to take yours just as
seriously.
Financial reporting is a complex and challenging topic. There are many difficult
questions in accounting that do not have easily identified answers. You will experience
that as you work on the cases, and within your groups. It will require a great deal of time
outside of class to grasp the concepts and understand their application. It would be
unusual for a student to do well without committing a minimum of two hours
outside of class for each in-class hour to preparation for the course.
ROLE OF ASSIGNMENTS AND GROUP ACTIVITIES
Reading
The reading assignments are designed to provide a foundation and a basis for your
understanding of the issues involved. The classroom activities will build on that
foundation to enhance your understanding and comprehension of the critical factors that
need to be considered in dealing with those issues. Therefore, if you do not read the
assigned materials in advance or do not dedicate sufficient time to them you will not be
prepared for the classroom experience.
In-class Discussions and Group Activities
This general category includes both the team work and discussions, which will require
your participation. You will notice that various assignments are included in the Class
Schedule for discussion in class. These assignments will help you develop a foundation
for understanding the topic and, in part, will be the basis for your team discussions and
mini-lectures by me on issues that are identified as problematic for many in the class.
Given the emphasis in the classroom on the conceptual issues and their application, your
participation is critical. You are responsible for asking penetrating questions, not those
that could be readily answered by reading the textbook, for providing well conceived
alternatives to those proposed in the literature or by your colleagues, by challenging me
and your colleagues to support their positions. These types of activities stimulate
thinking, develop your analytical and problem solving skills and create a learning
experience that is exciting.
Self and Peer Evaluations
Self and peer evaluations will be completed twice during the semester. You will have 100
points, assuming four members in a team (or the number of team members times 25
points), to allocate among the members of your team including yourself on each
evaluation. This allocation should be made honestly and objectively based on
performance and contribution to the team. I realize that you may feel uncomfortable
doing this but it is necessary in a learning and working environment to incentivize each
member to support the efforts of the team equitably.
Quizzes and Homework Assignments (questions, exercises, problems)
The primary focus of these will be on assessing the development of your technical
knowledge. The quizzes will generally take only fifteen minutes to complete.
Completion of all homework assignments will be recorded but only selected ones will be
graded. Advance notice of those to be graded will not be given.
Case Studies
Four case studies are assigned for collection and grading. These will focus primarily on
conceptual issues, not computations. They will require research in the professional
literature and a written response to the case including a clearly presented justification for
your position.
You have also received a guideline for organizing your responses to the cases. You
should use this as a basis for preparing the response. Your responses should generally
fall between four and five pages. Anything less could not deal effectively with the issues;
if you feel you need more than five pages to adequately deal with the issues, that is
acceptable. Your work will be graded based the guidelines mentioned above with
emphasis on the identification of the appropriate issues, quality and perceptiveness of
thought, ability to discuss various accounting options and the rationale for each, and the
clarity of presentation.
Mid-Term and Final Exams
These will be designed to assess whether you have grasped the materials to date and are
able to apply the knowledge comprehensively. The exams will emphasize technical
competence and critical thinking ability and thus will include both problems, which are
application oriented and multiple-choice questions that will focus on concepts.
CLASS POLICIES
Grading:
Grades will be allocated as follows:
Quizzes
4 @ 10 points
Homework
10 @ 5 points
In-class contribution
Case studies
4 @ 50 points
Mid-term exam
Final exam
Total
40
50
10
200
100
100
500
Grading Policy
Questions from an individual about their grade(s) will not be dealt with in class. If you
want to discuss your grades generally or you believe an error in grading has occurred,
please see me during my office hours to discuss it. If you request a regrading of an
assignment or exam, I will reassess it entirely.
Attendance
You are beyond the point at which some one should need to monitor your attendance.
Therefore, attendance will not be taken. However, regular attendance is critical to your
ability to perform adequately in this course.
Timeliness of Attendance
Late arrivals to class are disruptive. As a courtesy to me, and your colleagues, please
make every attempt to arrive before class begins. Sometimes this is unavoidable, but
frequent late arrival is unprofessional and inconsiderate behavior. If there is a unique
situation that will result in arriving late frequently, please discuss it with me at the
beginning of the semester.
Homework Assignments
Homework assignments must be completed when you arrive for class. Be certain to
have each assignment on a separate sheet of paper. All homework must be prepared
using Excel or Word.
I will cover all homework assignments in class. Copies of the solutions will be available
on the web after the homework is covered in class. The grader, who will be reviewing
the completed homework, will also be providing input that will help me assess whether
we need to deal with something that a significant number of students did not grasp.