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panel presentation

    Carla Carnaghan
    Strategies for Teaching the Accounting Theory...
    panel presentation posted August 19, 2010 by Carla Carnaghan, last edited February 18, 2012 
    4066 Views, 4 Comments
    Strategies for Teaching the Accounting Theory Course:Curriculum, Pedagogy and Resources
    moderator and panelists:
    Carla Carnaghan - University of Lethbridge; James Dodd – Drake University; Irene Gordon - Simon Fraser University; David Gilbertson - Western Washington University
    presentation date:
    August 4, 2010 5:00pm - 6:30pm



    • Robert E Jensen

      Bob Jensen's continuously updated two volumes on accounting theory --- 
       In particular, note the module entitled:
       Purpose of Theory:  Prediction Versus Explanation 

    • Robert E Jensen

      You may want to look at Carla Carnagha's slide show entitled
      "Strategies for Teaching the Accounting Theory Course:
      Curriculum, Pedagogy and Resources

      Bob Jensen's continuously updated two volumes on accounting theory --- 
       In particular, note the module entitled:
       Purpose of Theory:  Prediction Versus Explanation 

      Hi Dennis,

      I think there's a fundamental choice to make regarding whether to focus on accounting theory in history versus contemporary accounting theory.

      Contemporary accounting theory builds on contemporary theory and contracting in finance and economics, including such topics as those listed below:


      Financial Accounting Theory Extensions of the Following Topics:
      Structured Finance --- 
      Securitization --- 
      Portfolio Theory (including the CAPM and Options Pricing) ---
      M&M Theory --- 
      Financial Instruments --- 
      Derivative Financial Instruments --- 
      Other topics listed at 

      The last time I taught a contemporary accounting theory course, the 2006 syllabus was the one at 


      Managerial and Organizational Accounting Theory Extensions could build on the following: ---

      Great Minds in Management:  The Process of Theory Development ---


      Great Minds in Sociology ---
      Also see Also see 

      Accounting history builds on content of accounting theory articles in the published leading academic accounting journals such as TAR between the Years 1925 and 1990. After 1990, I think many accounting theory professors shifted more toward contemporary accounting theory topics. As a result, most previous accounting theory textbooks became history.

      The older style accounting theory courses were often rooted more in philosophy. For example, you could cherry pick topics from Harry Wolk's 2009 four-volume set. If course this set is both too extensive and too expensive to serve as a textbook for a single course.


      Capsule Commentary Book Review, The Accounting Review, January 2012, pp. 356-357 ---


      Stephen A. Zeff, Editor

      HARRY I. WOLK (editor), Accounting Theory (London, U.K.: Sage Publications Ltd., 2009, ISBN 978-1-84787-609-6, pp. xlv, 1,518 in four volumes) ---


      Harry I. Wolk, the compiler of this collection of 74 previously published articles and other essays, died in October 2009 at age 79. In 1984, he was assisted by two colleagues in writing a thoughtful, wide-ranging textbook on accounting theory, which is now in its seventh edition. He has, thus, been a close student of the accounting theory literature for many years.


      Wolk's valedictory contribution is this anthology, which is divided into ten sections: philosophical background, accounting concepts, conceptual frameworks, accounting for changing prices, standard setting, applications of accounting theory to five measurement areas, agency theory, principles versus rules, international accounting standards, and accounting issues in East and Southeast Asia. Because he provides only a two-and-a-half-page general introduction, we cannot know the criteria he used to make these selections. The earliest of the articles dates from 1958, and one infers that this collection represents the body of work that, over his long career, mostly at Drake University, he found to be influential writings.


      Among the major contributors to the theory literature represented in the collection are Devine, Mattessich, Davidson, Solomons, Sterling, Thomas, Bell, Shillinglaw, Bedford, Ijiri, and Stamp. Conspicuous omissions are Chambers, Baxter, Staubus, Moonitz, Sorter, and Vatter. Although many of the earlier pieces have stood the test of time, a number of the more recent selections would, inevitably, be open to second-guessing. To be sure, most of these articles can be accessed electronically, yet it is instructive to know the works that Harry Wolk believed were worth remembering, and it is handy to have them all in one collection.

      The price tag of £600/$1,050 for the four-volume set will, unfortunately, deter all but the most enthusiastic purchasers.


      Jensen Comment
      And to think my constantly-updated accounting theory book (in two volumes) has a price tag of $0 (Sigh!)---


      But I do thank Harry for providing me with an accounting illustration that I turned into the most popular Excel illustration that I ever authored (i.e., popular in the eyes of my students over the years) ---


      Table of Contents ---

      SECTION I: PHILOSOPHICAL BACKGROUND Accounting - A System of Measurement Rules Devine, Carl Radical Developments in Accounting Thought Chua, Wai Fong Accounting as a Discipline for Study and Practice Bell, Philip W. Why Can Accounting Not Become a Science Like Physics? Stamp, Edward Social Reality and the Measurement of Its Phenomena Mattessich, Richard Toward a Science of Accounting Sterling, Robert R. Methodological Problems and Preconditions of a General Theory of Accounting Mattessich, Richard


      SECTION II: INFORMALLY DEVELOPED ACCOUNTING CONCEPTS A. Realization and Recognition The Critical Event and Recognition of Net Profit Myers, John Recognition Requirements - Income Earned and Realized Devine, Carl The Realization Concept Davidson, Sidney B. Matching Cash Movements and Periodic Income Determination Storey, Reed Some Impossibilities - Including Allocations Devine, Carl The FASB and the Allocation Fallacy Thomas, Arthur Conservatism Conservatism in Accounting, Part I: Explanation and Implications Watts, Ross Conservatism in Accounting, Part II: Evidence and Research Opportunities Watts, Ross The Changing Time-Series Properties ofEarnings, Cash Flows, and Accruals: Has Financial Accounting Become Mor Conservative? Givoly, Dan and Carla Hayn D. Disclosure Information Disclosure Strategy Lev, Baruch Corporate Reporting and the Accounting Profession: An Interpretive Paradigm Ogan, Pekin and David Ziebart Financial Reporting in India: Changes in Disclosure over the Period 1982-1990 Marston, C. L. and P. Robson Corporate Mandatory Disclosure Practices in Bangladesh M. Akhtaruddin Corporate Governance and Voluntary Disclosure L.L. Eng and Y.T. Mak Ownership Structure and Voluntary Disclosure in Hong Kong and Singapore Chau, Gerald and Sidney Gray E. Uniformity Uniformity Versus Flexibility: A Review of the Rhetoric Keller, Thomas Differences in Circumstances!: Fact or Fancy Cadenhead, Gary Toward the Harmonization of Accounting Standards: An Analytical Framework Wolk, Harry and Patrick Heaston


      SECTION III: CONCEPTUAL FRAMEWORKS FASB's Statements on Objectives and Elements of Financial Accounting: A Review Dopuch, Nicholas and Shyam Sunder The FASB's Conceptual Framework: An Evaluation Solomons, David The Evolution of the Conceptual Framework for Business Enterprises in the United States Zeff, Stephen Criteria for Choosing an Accounting Model Solomons, David Objectives of Financial Reporting Walker, R.G. Reliability and Objectivity of Accounting Methods Ijiri, Yuji and Robert Jaedicke


      SECTION IV: ACCOUNTING FOR CHANGING PRICES Replacement Cost: Member of the Family, Welcome Guest, or Intruder? Zeff, Stephen Costs (Historical versus Current) versus Exit Values Sterling, Robert R. A Defense for Historical Cost Accounting Ijiri, Yuji The Case for Financial Capital Maintenance Carsberg, Bryan Income and Value Determination and Changing Price Levels: An Essay Towards a Theory Stamp, Edward


      SECTION V: ACCOUNTING STANDARDS AND FINANCIAL STATEMENTS Get it off the Balance Sheet! Dieter, Richard and Arthur Wyatt Political Lobbying on Proposed Standards: A Challenge to the IASB Zeff, Stephen A Review of the Earnings Management Literature and Its Implications for Standard Setting Healy, Paul and James Wahlen Relationships among Income Measurements Bedford, Norton Some Basic Concepts of Accounting and Their Implications Lorig, Arthur Economic Impact of Accounting Standards - Implications for the FASB Rappaport, Alfred An Analysis of Factors Affecting the Adoption of International Accounting Standards by Developing Countries Zeghal, Daniel and Kerim Mhedhbi The Relevance of IFRS to a Developing Country: Evidence from Kazakhstan Tyrrall, David, David Woodward and A. Rakhumbekova Political Influence and Coexistence of a Uniform Accounting System and Accounting Standards: Recent Developments in China Xiao, Jason, Pauline Weetman and Manli Sun


      SECTION VI: APPLIED ACCOUNTING THEORY A. Income Tax Allocation Comprehensive Tax Allocation: Let's Stop Taking Some Misconceptions for Granted Milburn, Alex Acccelerated Depreciation and the Allocation of Income Taxes Davidson, Sidney Discounting Deferred Tax Liabilities pp. 655-665 Nurnberg, Hugo B. Leases Lease Capitalization and the Transaction Concept Rappaport, Alfred Leasing and Financial Statements Shillinglaw, Gordon Accounting for Leases - A New Framework McGregor, Warren C. Pensions and Other Postretirement Liabilities Alternative Accounting Treatments for Pensions Schipper, Katherine and Roman Weil A Conceptual Framework Analysis of Pension and Other Postretirement Benefit Accounting Wolk, Harry and Terri Vaughan OPEB: Improved Reporting or the Last Straw Thomas, Paula and Larry Farmer D. Consolidations An Examination of Financial Reporting Alternatives for Associated Enterprises King, Thomas and Valdean Lembke Valuation for Financial Reporting: Intangible Assets, Goodwill, and Impairment Analysis and SFAS 141 and 142 Mard, Michael, James Hitchner, Steven Hyden and Mark Zyla Proportionate Consolidation and Financial Analysis Bierman, Harold The Evolution of Consolidated Financial Reporting in Australia Whittred, Greg Foreign Currency Translation Research: Review and Synthesis Houston, Carol The Implementation of SFAS Number 52: Did the Functional Currency Approach Prevail? Kirsch, Robert and Thomas Evans Financial Accounting Developments in the European Union: Past Events and Future Prospects Haller, Axel E. Intangibles Accounting for Research and Development Costs Bierman, Harold and Roland Dukes The Boundaries of Financial Accounting and How to Extend Them Lev, Baruch and Paul Zarowin The Capitalization, Amortization, and Value Added Relevance of R & D Lev, Baruch and Theodore Sougiannis Accounting for Brands in France and Germany Compared With IAS 38 (Intangible Assets: An Illustration of the Difficulty of International Harmonization) Stolowy, Herve, Axel Haller and Volker Klockhaus Accounting for Intangible Assets in Scandinavia, the U.K., and U.S. and the IASB: Challenges and a Solution Hoeg-Krohn, Niels and Kjell Knivsfla


      SECTION VII: POSITIVE ACCOUNTING THEORY The Methodology of Positive Accounting Christenson, Charles Positive Accounting Theory: A Ten Year Perspective Watts, Ross and Jerrold Zimmerman Positive Accounting Theory and the PA Cult Chambers, Raymond Accounting and Policy Choice and Firm Characteristics in the Asia-Pacific Region: an International Empirical Test of Costly Contracting Theory Astami, Emita and Greg Tower


      SECTION VIII: THE TRUE AND FAIR VIEW AND PRINCIPLES VERSUS RULES-BASED STANDARDS Principles Versus Rules-Based Accounting Standards: The FASB's Standard Setting Strategy Benston, George, Michael Bromwich and Alfred Wagenhofer The True and Fair View in British Accounting Walton, Peter A European True and Fair View Alexander, David Rules, Principles, and Judgments in Accounting Standards Bennett, Bruce, Helen Prangell and Michael Bradbury


      SECTION IX: INTERNATIONAL ACCOUNTING AND CONVERGENCE The Introduction of International Accounting Standards in Europe: Implications for International Convergence Schipper, Katherine The Adoption of International Accounting Standards in the European Union pp. 127-153 Whittington, Geoffrey Trends in Research on International Accounting Harmonization pp. 272-304 Baker, C. Richard and Elena Barbou The Quest for International Accounting Harmonization: A Review of the Standard- Setting Agendas of the IASC, US, UK, Canada and Australia, 1973-1997 Street, Donna and Kimberly Shaughnessy From National to Global Accounting and Reporting Standards McKee, David, Don Garner and Yosra AbuAmara McKee A Statistical Model of International Accounting Harmonization pp. 1-29 Archer, Simon, Pascal, Delvaille and Stuart McLeay


      SECTION X: OTHER NATIONAL AND REGIONAL ACCOUNTING STUDIES The Institutional Environment of Financial Reporting Regulation in ASEAN Countries Saudogaran, Sharokh and J. Diga Corporate Financial Reporting and Regulation in Japan Benston, George, Michael Bromwich, Robert Litan and Alfred Wagenhofer Accounting Theory in the Political Economy of China Shuie, Fujing and Joseph Hilmy Ownership Structure and Earnings Informativeness: Evidence from Korea Jung, Kooyul and Kwon Soo Young Accounting Developments in Pakistan Ashraf, Junaid and WaQar Ghani Accounting Theory in the Political Economy of China Shuie, Fujing and Joseph Hilmy Ownership Structure and Earnings Informativeness: Evidence from Korea Jung, Kooyul and Kwon Soo Young Corporate Ownership and Governments in Russia Krivogorsky, Victoria Accounting Developments in Pakistan


      Jensen Comment
      I have not yet read this book, although it is on order. The table of contents is certainly very comprehensive. When I get the book I anticipate some major strenghts (e.g., history) and some major weaknesses such as superficial coverage of XBRL and financial instruments accounting, particularly derivative financial instruments and hedging activities.


      One problem with this book is bad timing. It has copyright date of 2009, but most of the modules were written much earlier before major happenings in accounting standard setting such as new standards and interpretations (domestic and international) on leases, revenue recognition, consolidations, fair value accounting, and hedging.

      I think the book will also be weak in the following critical areas of my own free accounting theory online book ---


      Bob Jensen


    • Robert E Jensen

      Prediction Versus Explanation ---

      "Higgs ahoy! The elusive boson has probably been found. That is a triumph for the predictive power of physics," The Economist, February 17, 2012 ---

      IN PHYSICS, the trick is often to ask a question so obvious no one else would have thought of posing it. Apples have fallen to the ground since time immemorial. It took the genius of Sir Isaac Newton to ask why. Of course, it helps if you have the mental clout to work out the answer. Fortunately, Newton did.

      It was in this spirit, almost 50 years ago, that a few insightful physicists asked themselves where mass comes from. Like the tendency of apples to fall to the ground, the existence of mass is so quotidian that the idea it needs a formal explanation would never occur to most people. But it did occur to Peter Higgs, then a young researcher at Edinburgh University, and to five other scientists whom the quirks of celebrity have not treated so kindly. They, too, had the necessary mental clout. They got out their pencils and papers and scribbled down equations whose upshot was a prediction.

      The reason that fundamental particles have mass, the researchers calculated, is their interaction with a previously unknown field that permeates space. This field came to be named (with no disrespect to the losers in the celebrity race) the Higgs field. Technically, it is needed to explain a phenomenon called electroweak symmetry breaking, which divides two of the fundamental forces of nature, electromagnetism and the weak nuclear force. When that division happens, a bit of leftover mathematics manifests itself as a particle. This putative particle has become known as the Higgs boson, whose possible discovery was announced to the world on December 13th (see article).

      Physicists demand a level of proof that would in any other human activity (including other scientific ones) be seen as ludicrously high—that a result has only one chance in 3.5m of being wrong. The new results—from experiments done at CERN, the world’s premier particle-physics laboratory, using its multi-billion-dollar Large Hadron Collider, the LHC—do not individually come close to that threshold. What has excited physicists, though, is that they have got essentially identical results from two experiments attached to the LHC, which work in completely different ways. This coincidence makes it much more likely that they have discovered the real deal.

      If they have, it would be a wonderful thing, and not just for science. Though nations no longer tremble at the feet of particle physicists—the men, and a few women, who once delivered the destructive power of the atom bomb—physics still has the power to produce awe in another way, by revealing the basic truths that underpin reality.

      Model behaviour

      Finding the Higgs would mark the closing of one chapter in this story. The elusive boson rounds off what has become known as the Standard Model of physics—an explanation that relies on 17 fundamental particles and three physical forces (though it stubbornly refuses to accommodate a fourth force, gravity, which is separately explained by Albert Einstein’s general theory of relativity). Much more intriguingly, the Higgs also opens another chapter of physics.

      The physicists’ plan is to use the Standard Model as the foundation of a larger and more beautiful edifice called Supersymmetry. This predicts a further set of particles, the heavier partners of those already found. How much heavier, though, depends on how heavy the Higgs itself is. The results just announced suggest it is light enough for some of the predicted supersymmetric particles to be made in the LHC too.

      That is a great relief to those at CERN. If the Higgs had proved much heavier than this week’s announcement implies they might have found themselves with a lot of redundant kit on their hands. Now they can start looking for the bricks of Supersymmetry, to see if it, too, resembles the physicists’ predictions. In particular, in a crossover between particle physics and cosmology, they will be trying to find out if (as the maths suggest) the lightest of the supersymmetric partner particles are the stuff of the hitherto mysterious “dark matter” whose gravity holds galaxies together.

      A critique of pure reason

      One of the most extraordinary things about the universe is this predictability—that it is possible to write down equations which describe what is seen, and extrapolate from them to the unseen. Newton was able to go from the behaviour of bodies falling to Earth to the mechanism that holds planets in orbit. James Clerk Maxwell’s equations of electromagnetism, derived in the mid-19th century, predicted the existence of radio waves. The atom bomb began with Einstein’s famous equation, E=mc{+2}, which was a result derived by asking how objects would behave when travelling near the speed of light. The search for antimatter, that staple of science fiction, was the consequence of an equation about electrons which has two sets of solutions, one positive and one negative.

      Eugene Wigner, one of the physicists responsible for showing, in the 1920s, the importance of symmetry to the universe (and who was thus a progenitor of Supersymmetry), described this as the “unreasonable effectiveness of mathematics”. Not all such predictions come true, of course. But the predictive power of mathematical physics—as opposed to the after-the-fact explanatory power of maths in other fields—is still extraordinary.

      Continued in article

      Bob Jensen's threads on theory ---


    • Robert E Jensen

      Inside the Psychologist's Studio Videos (interviews with prominent psychologists) ---

      Critical Postmodern Theory ---

      Mike Kearl's great social theory site
      Go to

      Great Minds in Management:  The Process of Theory Development ---