The importance of accounting information for society in general and businesses in particular is discussed throughout the course. The course emphasizes that the accounting system is continuously shaped by both economic and societal changes. The first week sets the stage with a discussion of the history of accounting and its underlying conceptual framework. This is followed by the second week when the assumptions, principles, and constraints of accounting are presented. As the discussion focuses on specific accounting topics, students consider managerial incentives for reporting financial information opportunistically. Students learn of various methods that managers may use to manage earnings, and consider the costs of earnings management to management, employees, investors, and creditors. Past cases of earnings management are frequently discussed in class. The module on financial accounting concludes with a discussion of corporate governance issues, including Sarbanes Oxley. This is especially relevant because the social impact of corporate governance issues is profound and so it provides an opportunity to stress an accountant’s responsibility to society. The module on managerial accounting discusses the importance of financial information for performance evaluation and executive compensation.
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