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MACC7012 - Financial Accounting TheoryMaster of Accounting (2020 Intake)Course OverviewGuochang Zhang © 2021The University of Hong Kong
Course OverviewA.Course objectivesB.Course topicsC.Teaching / learning activities2Financial Accounting TheoryProfessor Guochang Zhang, HKU
A. Course objectivesThis course gives a high-level view of what accounting is aboutand why and how it is important in the economy.The accountingprofession plays a unique role in the economy.ØIt is taught from the perspective of information users, rather than informationpreparers and auditors. Who are users of accounting information?-Capital market investors-Lenders and creditors-Company directors, managers, etc.-RegulatorsØIt also concerns strategic issues that arise when companies conduct financialreporting and disclosure (insiders’ opportunistic, even fraudulent, behavior).ØHow capital markets process financial information to discover firm value(market efficiency).3Financial Accounting TheoryProfessor Guochang Zhang, HKU
Who uses accounting information?Analysts and investors:Tesla stock information from Yahoo FinanceInvestor's Business Daily, 8 March 2021,“Analysts Called The Tesla StockCrash: Here's What They Say Now”:“The 12-month price target on Tesla is 600.14, not far from the 597.95 it closed at on Friday(5 March 2021).To be sure, disagreement is rampant. The most bullish analyst on Tesla has a 12-month pricetarget of 1,200. But the most bearish thinks the stock is worth just 135.4Financial Accounting TheoryProfessor Guochang Zhang, HKU
Who uses accounting information?
5Financial Accounting TheoryProfessor Guochang Zhang, HKU
A loan agreement between American Tower Corp and thelenders (continued):Under negative covenants:6Financial Accounting TheoryProfessor Guochang Zhang, HKU
Who uses accounting information?

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Finance, Economics, Professor Guochang Zhang

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