AYB311 Lecture Notes - Lecture 2: Price Support, Earnings Management, Accrual
Document Summary
Not changed for centuries: now varied and complicated. Regular reporting: financial position and performance, financial statements. External users this is the only information which they recieve. Viewed as a practical" discipline: how to apply accounting rules, using computerised accounting programs, limited theory in the past, needed to provide basis for decisions as business became more complex and more frequent. Current attempt to merge gaap with isfrs. Dictionary definitions focus on notions of: beliefs or principles, ideas, explanation, opinion. A description, explanation or a prediction *of accounting practice based+ on observations and/or logical reasoning": prediction not always needed. Logical reasons in the form of a set of broad principles that (1) provide a general framework of reference by which practice can be evaluated and (2) guide the development of new practice and procedures": preferred definition. Providing an explanation of what is happening. Why is theory needed in an accounting context: describe and explain current accounting practice.
