Lecture 5: Common themes

Question 1

What are the common theme for the three papers in lecture 5 ?

Answer 1

They illustrate that participants (Producers of accounts, auditors, experts etc) use and comply with accounting standards and pronouncements in unexpected ways.

Question 2

How to they all contribute to the understanding of the construction of accounting numbers?

Answer 2

1. Goodwill through impairment testing (Huikku, 2017)
2. The simuclra of financial instruments and their values (Bougen & young 2012)
3. The profit as viewed through value frames (Carrington & Eklöv Alander)

Question 3

How do they show that accounting standard setter may perhaps need better knowledge and understanding och the participants needs?

Answer 3

1. Managers knowledge of the business may be useful for the arrival at balance sheet values, contrary to the need for traces to be impersonal to IASB pronouncement (Huikku 2017)
2. Users need a source of reality, real-ness where they now get “fair value accounting”, one of the market focus, yet one with absent market reality. In which some financial instruments have in fact never been traded in an organised market exchange (Bougen & Young, 2012)
3. Value frames meet both managers need for “cushions” and investors need for prudence (försiktighet)(Carrington & Eklöv Alander)