Preview of Class 6
Lev and Gu Chapter 5 addresses the question of whether the declining usefulness of accounting
is due to investors failure to properly use the information, or due to accountings failure to
provide investors with the type of information
Preview of Class 2
Scott Chapter 3
The FASB asserts that the purpose of accounting is to provide decision
useful information to investors (decision usefulness role of accounting).
Chapter 3 illustrates what is meant by decision useful information.
Preview of Class 5
Class 5 addresses two broad topics
Evans (2003) and Dichev (WP) address one topic, while Lev and Gu (2016)
address a second.
Evans (2003) and Dichev (WP) address the issue of income measurement.
They identify two broad approaches to
Preview of Class 3
Over the years, the FASB has invested significant effort in developing a conceptual
framework that is intended to assist them in developing accounting standards.
The Storey and Storey reading lays out the history behind that effort.
Chapters 3 and 9
These two chapters illustrate two different roles played by
Chapter 3 Investment role AKA valuation role AKA decision
Basic objective of accounting is to supply investors and creditors
Preview of Class 4
The FASBs original conceptual framework (consisting of SFAC No.
1-6) was developed from the middle 1970s to the middle 1980s.
This original framework was supplemented with SFAC 7 in 2000,
which deals with use of present value measures
Preview of Class 7
Lev and Gu Chapters 12-15 illustrate their proposed
Strategic Resources and Consequences Report for firms in
Media and entertainment industry (Ch. 12)
Insurance industry (Ch. 13)
Pharmaceuticals industry (Ch. 14)
Oil and gas in