ACCOUNTING THEORY: REPORTING INCENTIVES AND CONSEQUENCES

Prerequisites & course information

Requisites: Graduate/professional standing and ( ACCT I S 302 or 702 ); or declared in graduate Business Exchange program Course Designation: Grad 50% - Counts toward 50% graduate coursework requirement Repeatable for Credit: No Last Taught: Fall 2026 Learning Outcomes: 1. Explain the conceptual frameworks underlying accounting standard setting in the US and internationally. Audience: Graduate 2. Recognize how political considerations and economic consequences within a market economy affect accounting standard setting. Audience: Graduate 3. Explain the role of information asymmetry, adverse selection and moral hazard in capital markets in addressing accounting and disclosure issues. Audience: Graduate 4. Demonstrate how to assess accounting policy decisions in terms of underlying finance and economic theories such as efficient capital markets, decision theory, prospect theory, game theory, and signaling. Audience: Graduate 5. Recognize how managers’ motivations, especially with respect to compensation and other contracts could explain management reactions to proposed accounting policies, as well as practices such as earnings management. Audience: Graduate 6. Apply the conceptual framework, as well as relevant finance and economic theories and academic research, in a detailed explanation of the development of a major accounting standard. Audience: Graduate Learning Outcomes: 1. Explain the conceptual frameworks underlying accounting standard setting in the US and internationally. Audience: Graduate 2. Recognize how political considerations and economic consequences within a market economy affect accounting standard setting. Audience: Graduate 3. Explain the role of information asymmetry, adverse selection and moral hazard in capital markets in addressing accounting and disclosure issues. Audience: Graduate 4. Demonstrate how to assess accounting policy decisions in terms of underlying finance and economic theories such as efficient capital markets, decision theory, prospect theory, game theory, and signaling. Audience: Graduate 5. Recognize how managers’ motivations, especially with respect to compensation and other contracts could explain management reactions to proposed accounting policies, as well as practices such as earnings management. Audience: Graduate 6. Apply the conceptual framework, as well as relevant finance and economic theories and academic research, in a detailed explanation of the development of a major accounting standard. Audience: Graduate