Chapter 9 - Uniformity and Disclosure (s).pptx - ACCTG 641...

ACCTG 641 – Accounting Theory & History
Wolk: Accounting Theory © 2017 SAGE Publications, Inc.
Chapter 9
Uniformity and Disclosure
1

ACCTG 641 – Accounting Theory & History
Wolk: Accounting Theory © 2017 SAGE Publications, Inc.
Lecture
•
Choice Among Accounting Methods
•
Uniformity
–
Relevant Circumstances
–
Nature of Finite and Rigid Uniformity and Flexibility
–
Extent That Standards Are Using Finite Uniformity,
Rigid Uniformity, or Flexibility
•
Disclosure
2

ACCTG 641 – Accounting Theory & History
Wolk: Accounting Theory © 2017 SAGE Publications, Inc.
What Causes a Firm to Choose One Accounting
Method Over Another When Free Choice Can
Be Made?
•
Minimizing __agency costs_________
•
________Signaling information__________ that
management wants to send to outside parties
•
____Externalities________ – attempting to
“influence” outside parties
3

ACCTG 641 – Accounting Theory & History
Wolk: Accounting Theory © 2017 SAGE Publications, Inc.
Uniformity
•
Uniformity is seen as the concept that influences
comparability.
•
Comparability, an enhancing characteristic, is not an
inherent quality of accounting numbers in the sense
that relevance and faithful representation are.
•
Comparability deals with the ___relationship
between accounting numbers.
4

ACCTG 641 – Accounting Theory & History
Wolk: Accounting Theory © 2017 SAGE Publications, Inc.