Custom Search

Financial Accounting Theory

Financial Accounting Theory
William R. Scott, Fourth Edition (Toronto, Canada: Pearson/Prentice Hall, 2006, pp. vi, 472).

Financial Accounting Theory has 13 content chapters, and several sections containing preface, acknowledgements, bibliography, and index (subject and author index combined). The first edition of the book appeared in 1997. The book's success is indicated by the frequency of revisions, averaging a revision for every three years the book has been in print. As the author has indicated in the preface, the fourth edition has substantial revisions in both contents and topics covered in the book.

Financial Accounting Theory's 13 chapters are well prepared and presented. The first chapter is an introduction. It sets the theoretical framework: both historical and ethical, and their applications to accounting research. Accounting research is approached from two complementary perspectives. The first is theory in research, described in ideal conditions, adverse selection, and moral hazard. The second aspect focuses on theory in practice, which is discussed within the context of standard-setting entities/bodies. The remaining 12 chapters are organized within these two broad frameworks: theory in research and practice of financial accounting.

Chapters 3 to 11 discuss research in financial accounting, while the last two chapters, 12 and 13, are devoted to accounting in practice - standard-setting entities, particularly those agencies in Canada. Chapter 13 has a section on the United States standard-setting bodies: Financial Accounting Standards Board (FASB), and Securities and Exchange Commission (SEC), as well as the International Accounting Standards Board (IASB). The United States and IASB are incorporated as they relate to the Canadian Accounting standard-setting and practices. This structure enables the student and/or reader to have a broader understanding of the Canadian accounting practices as they interface and shaped by the accounting practices in the United States and Europe.

For the instructor, the text has teaching supplements: an instructor resource CD-ROM, which contains instructor's manual; solutions to chapter-end questions and problems; learning objectives for each chapters as well as supplementary references; and PowerPoint® presentations. While Financial Accounting Theory has chapter-end questions and problems, it does not provide the student/reader with a list of suggested readings by chapters, which are relevant if the book is expected to be used in upper-level accounting theory courses or seminars. The book does offer supplementary materials for students, for example, a student CD that has sample exercise solutions for questions and problems included in the book, cases, business practices, examples from standard-settings, and supplementary readings. If it is expected that the book can reach wider audiences beyond students taking accounting courses, then these supplementary materials become relevant. Otherwise, access to these materials will be limited only to students enrolled in accounting courses.

It is obvious that the text is a financial accounting theory book that is suited for a broader audience: students and accounting researchers, as well as practitioners. As an accounting theory textbook, it is appropriate for upper-level undergraduate and advanced M.B.A. classes beyond intermediate and advanced accounting. It can also serve a supplementary reading for doctoral seminars in financial accounting theory classes. The book has been primarily written for students and practitioners in Canada. In this aspect, the materials presented in the book are primarily within the context of the Canadian accounting standardsetting and business environment. Nevertheless, the book can be used as a required or supplementary text in a financial and/ or an international accounting theory course. There has been an emphasis in internationalizing the accounting curriculum. Accounting theory courses have incorporated international and global accounting standards and policies.

Books like Financial Accounting Theory will assist in meeting the demands of instructors who are considering adopting books to use as a text and/or supplementary readings in their accounting theory and seminar classes at both the undergraduate and graduate levels. Whichever adoption method or preferences is used for Financial Accounting Theory, there is no doubt that it serves the needs of instructors, students, and practitioners who are interested and pursuing a career in international accounting.


Darcy Grubaugh said...

I agree. I think companies with good financial management would really be in a better position compared to organizations that do not have proper control in managing finances. The people responsible must monitor the financial property of companies, and provide honest suggestions on the plans a company wants to take, or suggest a new direction entirely. The most important thing to keep in mind is of course, taking care of the money, as it can make or break the success and failure of a company.

Darcy Grubaugh

Emeeti said...

Very helpful blog,thanks for sharing such a useful information, keep updating.
tax accountant

Custom Search