Seminar in Accounting Theory
(aka Contemporary Issues in Financial
Dr. Gopal Krishnan
Why Study Accounting Theory?
Accounting is not just about numbers. There are a
number of concepts/principles that shape accounting
The FASBs Conceptual
What is a Conceptual Framework?
A blueprint for accounting theory
Foundation of GAAP
A general frame of reference
Why do we need a Conceptual Framework in
(a) Improved communication and bet
Types of Manipulations Mentioned in the
Accounting and Auditing Enforcement Releases
Other expense / shareholder equity
Cost of goods sold
Income Concepts and Income
Importance of Income Reporting
Income is used
1 as the basis of one of the principal forms of taxation.
2 in public reports as a measure of the success of a corporation s
3 as a criterion for
Earnings Management and
What Is Earnings Quality?
You know GAAP. Do you know LAAP and
High quality earnings are presumed to be fair
representations of the economic performance
of the firm
Reported earnings are highly correlate