Definition of Theory; Importance for Accounting
Students to Study Accounting Theory; An Overview of Theories of Accounting: Pragmatic
Theories, Normative Theories, Positive Theories; The Fundamental Problem of Financial
Accounting Theory; Regulations as a Reaction to the Fundamental Problem.
Chapter-2 The Theories of Regulation Relevant to Accounting
Theory of Efficient Markets, Agency
Theory, Theories of Regulation: Public Interest Theory, Regulatory Captures Theory, Private
Interest Theory; How Theories of Regulation Apply to Accounting Practice; Regulatory
Framework for Financial Reporting.
Chapter-3 Conceptual Framework for the Preparation and Presentation of Financial Statements
a) Conceptual Framework of Accounting and its Importance; Brief Overview of the History
of the Development of Conceptual Frameworks.
b) Building Blocks of IASB’s Conceptual Framework.
c) Conceptual Framework to Legitimize Standard-Setting Bodies; Normative vs. Positive
Approaches and the Development of Conceptual Framework.
Chapter-4 Theory and Concepts of Measurements in Accounting
a) Concepts of Measurement; Importance of Measurement; Reliability and Accuracy in
Measurement; Issue of Measurements in Accounting; Rationale Behind Double-Entry
Accounting; Measurement of Accounting and Economic Income; Accounting Policy and
Changes; Earnings Smoothing, Earning Management, Big Bath Accounting vs. Creative
Accounting; Fraud in Accounting.
b) Capital Maintenance Concepts and Earnings Measurement; Historical Cost Accounting
(HCA) vs. Fair Value Accounting (FVA); Information conveyed by HCA and FVA; Meaning
of Price-To-Book Ratio and Price-Earnings Multiple under HCA and FVA; and Fair
Valuation and Market Capitalization.
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c) Approaches to Fair Value Measurement (Statement of Financial Accounting Standard
(SFAS) 157 and IAS 39; Arguments for and against FVA, Pro-Cyclicality and FVA.
d) The Present System of Accounting Recognition and Measurement (A Mixed System
Involving both HCA and FVA); Measurement of Assets, Liabilities and Owner’s Equity;
Revenues and Gains: Definition, Recognition, and Measurement; Expenses and Losses:
Definition, Recognition and Measurement; Fair Valuation of Non-Current Assets and
Intangibles; Problems and Prospects.
Chapter-4 Theory and Concepts of Measurements in Accounting – Leverage
a) Concepts of Measurement; Importance of Measurement; Reliability and Accuracy in
Measurement; Issue of Measurements in Accounting; Rationale Behind Double-Entry
Accounting; Measurement of Accounting and Economic Income; Accounting Policy and
Changes; Earnings Smoothing, Earning Management, Big Bath Accounting vs. Creative
Accounting; Fraud in Accounting.
b) Capital Maintenance Concepts and Earnings Measurement; Historical Cost Accounting
(HCA) vs. Fair Value Accounting (FVA); Information conveyed by HCA and FVA; Meaning
of Price-To-Book Ratio and Price-Earnings Multiple under HCA and FVA; and Fair
Valuation and Market Capitalization.
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c) Approaches to Fair Value Measurement (Statement of Financial Accounting Standard
(SFAS) 157 and IAS 39; Arguments for and against FVA, Pro-Cyclicality and FVA.
d) The Present System of Accounting Recognition and Measurement (A Mixed System
Involving both HCA and FVA); Measurement of Assets, Liabilities and Owner’s Equity;
Revenues and Gains: Definition, Recognition, and Measurement; Expenses and Losses:
Definition, Recognition and Measurement; Fair Valuation of Non-Current Assets and
Intangibles; Problems and Prospects.
Class Brief
00:00
Class-1 Requirements 1-7
00:00
Chapter-5 Accounting and Capital Markets:
a) Efficient Market Hypothesis and Tests of Market Efficiency with respect to Accounting
Information; Effects of Earnings Announcements on the Level and Variability of Stock
Prices; Association between Accounting Performance Measures and Stock Returns.
b) Earnings Response Coefficients and Value Relevance of Accounting Information; A Brief
Review of Models of Equity Valuation; Relationship between Fundamental Value and
Earnings and/or Free Cash Flows; Financial Statement Analysis and Prediction of Earnings
and Growth in Earnings and hence the Fundamental Value of Equities; Review of Research
on Earnings Response Coefficients and on the Value Relevance of Accounting Information.
c) Positive Accounting Theory; Agency Problem between a Firm’s Shareholders (Principal)
and its Management (Agent); Managerial Incentives and Accounting Numbers; Role of
Accounting in Contracts and in the Political Process; Capital Market Effects of Accounting
Method Changes and Stock Market Reactions to New Accounting Standards.
Chapter-6 Financial Disclosure Concepts and Disclosure Regulation in Bangladesh
a) Financial Disclosure: Costs and Benefits of Disclosure; Arguments for and against
Regulation of Financial Disclosure; Mandatory vs. Voluntary Disclosure; Information Needs
of Diverse Users; Theories of Financial Disclosures.
b) Financial Reporting Regulations in Bangladesh; A Critical Review of Disclosure
Requirements as per the Companies Act, 1994, the Banking Companies Act, 1991; the
Securities and Exchange Rules, 1987, Listing Rules of the Stock Exchanges, and
International Financial Reporting Standards (IFRSs) as adopted by the Institute of Chartered
Accountants of Bangladesh and other Acts and Pronouncements that require Financial
Disclosure.
Chapter-7 Accounting Standards
Structure for Setting Accounting Standards; Role of the IASB to Harmonize Accounting and
Reporting Practices across Countries.
b) International Financial Reporting Standards (IFRS) Issued by IASB; First-Time Adoption
of International Financial Reporting Standards (IFRS-1).
8. Accounting Standards Adopted in Bangladesh; BASs adopted IASs and renamed by ICAB.
