Explain The Objectives Of Financial Reporting

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COURSE OBJECTIVES
The objectives of this course are to help you grasp the fundamental principles of financial reporting and acquire the skills of applying these principles to solve real-world financial reporting problems. Our central topics are the measurement and reporting of a firm’s investing and financing activities. We will study the existing standards, evaluate the resulting disclosures and explore the challenges faced in those reporting areas. We will also discuss the influencing factors of financial reporting quality, including legislation, standard setting, and internal and external monitors.

Upon completing of this course you should be able to: 1. Elaborate key objectives of financial reporting and the desired characteristics of financial disclosures. 2. Search, interpret and apply relevant standards when facing a reporting issue. 3. Characterize and account for investing and financing activities according to current GAAP standards. 4. Evaluate a firm’s financial reporting environment. 5. Effectively work and communicate in a team environment similar to the professional accounting environment. 6. Make sound ethical decisions.

“Rules are not necessarily sacred, principles are.” --- Franklin D. Roosevelt (1882-1945) COURSE DESIGN

US GAAP provides accountants considerable reporting discretion. From asset valuation to accrual estimation, accountants exercise professional judgment on every aspect of financial reporting. Moreover, in today’s fast changing business world, existing reporting rules are incapable of addressing every contingency. Often, auditors or financial statement preparers face situations in which there are no rules to follow or seemingly conflicting rules that could apply. The only thing they can rely on to navigate through these uncharted waters is their understanding of the basic principles: What are the key objectives of financial reporting? What are the desired qualities of financial disclosures? While the comprehension of reporting principles is of first-order importance, that does not mean it is acceptable to downplay technical skills. Rather mastery of technical accounting skills including working knowledge of current rules is akin to a physician who knows basic human anatomy. ACCY 303 is designed to help you grasp the reporting principles and at the same time acquire both technical and analytical skills to solve both existing and emerging reporting problems.

We treat each accounting topic as a context where you deepen your understanding of the principles and get hands-on experience with implementing and evaluating of accounting rules. For each accounting topic, you will go through the following stages:

a. Understanding existing standards. This is mostly achieved by self-study of textbook chapters and participation in class discussions. b. Implementing existing standards. You will get ample practice on implementation through in-class and online exercise question sets. c. Evaluating existing standards. In-class discussions will focus on the discretion current GAAP allows, the shortcomings of the existing standards and potential alternative reporting standards. d. Understanding the prevailing challenges in the reporting area. You will analyze a recent restatement representative of the common issues in the reporting area. e. Solving a reporting problem. Experienced auditors or managers will present an issue of the accounting subject at hand and ask you to provide reporting and disclosure solutions. In order to solve the problem, you need to search the relevant accounting literature, cite existing rules to support your arguments, and make professional decisions based upon fundamental reporting principles. You will receive feedbacks from industry professionals and get updates on the development in the accounting area.

The key to achieving the learning objectives of ACCY 303 is preparation before
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