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Accounting Theory

Accounting Theory
Conceptual Issues in a Political and Economic Environment

Ninth Edition
Additional resources:

July 2016 | 672 pages | SAGE Publications, Inc

This updated Ninth Edition of Accounting Theory: Conceptual Issues in a Political and Economic Environment continues to be one of the most relevant and comprehensive texts on accounting theory. Authors Harry I. Wolk, James L. Dodd, John J. Rozycki provide a critical overview of accounting as a whole as well as touch on the financial issues in economic and political contexts, providing readers with an understanding of how current United States accounting standards were derived and where we might be headed in the future. Readers will find learning tools such as questions, cases, problems and writing assignments to solidify their understanding of accounting theory and gain new insights into this evolving field.

Chapter 1: An Introduction to Accounting Theory
Accounting Theory and Policy Making  
The Role of Measurement in Accounting  
Plan of This Book  
Appendix 1-A: Valuation Systems  
Chapter 2: Accounting Theory and Accounting Research
Accounting Research and Scientific Method  
Is Accounting an Art or a Science?  
Directions in Accounting Research  
A Scientific Revolution in Accounting?  
Chapter 3: Development of the Institutional Structure of Financial Accounting
Accounting in the United States Prior to 1930  
Formative Years, 1930-1946  
Postwar Period, 1946-1959  
Modern Period, 1959 to the Present  
Chapter 4: The Economics of Financial Reporting Regulation
The Case for Unregulated Markets for Accounting Information  
The Case for Regulated Markets for Accounting Information  
Imperfections of Accounting Regulation  
The Regulatory Process  
Economic Consequences of Accounting Policy  
Chapter 5: Postulates, Principles, and Concepts
Postulates and Principles  
Basic Concepts Underlying Historical Costing  
Equity Theories  
Appendix 5-A: The Basic Postulates of Accounting (ARS 1)  
Appendix 5-B: A Tentative Set of Broad Accounting Principles for Business Enterprises (ARS 3)  
Chapter 6: The Search for Objectives
APB Statement 4  
The Trueblood Committee Report  
User Objectives and User Diversity  
Chapter 7: The FASB’s Conceptual Framework
The FASB’s Conceptual Framework  
The Conceptual Framework as a Codificational Document  
Empirical Research on the Conceptual Framework  
Assessing the Conceptual Framework  
Chapter 8: Usefulness of Accounting Information to Investors and Creditors
Earnings, Dividends, and Stock Prices  
Residual Income Models  
Background on Risk and Return  
Introduction to Capital Markets Research in Accounting  
The Value of Accounting Information: Evidence From Return Data  
The Value of Accounting Information: Evidence From Direct Valuation  
Accounting Data and Creditors  
Importance of Earnings Forecasting  
Empirical Research and Standard Setting  
Chapter 9: Uniformity and Disclosure: Some Policy-Making Directions
What Underlies the Choice Among Accounting Methods?  
The Usefulness of Accounting Allocations  
Improving Accounting Standards  
Chapter 10: International Accounting
National Accounting Differences  
International Harmonization of Accounting Standards  
Chapter 11: The Balance Sheet
The Relationship Between the Balance Sheet and the Income Statement  
Owners' Equity  
Financial Instruments  
Classification in the Balance Sheet  
Appendix 11-A: A Simple Example of a Weather Derivative  
Chapter 12: The Income Statement
Income Definitions  
Revenues and Gains  
Expenses and Losses  
Future Events and Accounting Recognition  
Current Operating Versus All-Inclusive Income  
Nonoperating Sections  
Earnings per Share  
Special Subjects Concerning Income Measurement  
Earnings Management  
Income Statement Developments  
Chapter 13: Statement of Cash Flows
The Statement of Changes in Financial Position  
The Motivation for a Cash Flow Statement  
Requirements of the Cash Flow Statement  
Classification Problems of SFAS No. 95  
Analytical Usefulness of the Cash Flow Statement  
Cash and Funds Flow Research  
Improving the SCF  
Chapter 14: Income Taxes and Financial Accounting
Income Tax Allocation  
The Asset–Liability Orientation of SFAS No. 109  
Empirical Research on Income Tax Allocation  
International Accounting Standards (IAS)  
Improving Accounting Standards  
Chapter 15: Pensions and Other Postretirement Benefits
Overview of Pension Plans  
Development of Pension Accounting Standards  
Postretirement Benefits Other Than Pensions  
International Accounting Standards (IAS)  
Improving Accounting Standards  
Appendix 16-A: Illustration of Pension Expense Determination and Actuarial Funding Methods  
Chapter 16: Leases
The Lease Contract  
The Evolution of Lease Accounting Standards  
FASB and IASB Joint Exposure Draft on Accounting for Leases  
Improving Accounting Standards  
Chapter 17: Intercorporate Equity Investments
Relevant Circumstances  
The Equity Method  
The Fair Value Method  
Defining the Reporting Entity  
Translation of Foreign Operations  
IASB Standards  
Improving Accounting Standards  
Appendix 17-A: Special Purpose Entities, Variable Interest Entities, and the Downfall of Enron  


Instructor Resource Site

Password-protected Instructor Resources include the following:

  • A Microsoft® Word® test bank provides you with a diverse range of pre-written options as well as the opportunity for editing any question and/or inserting your own personalized questions to effectively assess students’ progress and understanding.
  • Editable, chapter-specific Microsoft® PowerPoint® slides offer you complete flexibility in easily creating a multimedia presentation for your course.
  • An instructor's manual includes chapter highlights, answers to the end-of-chapter questions, case problems, and writing assignments.
Key features


  • Updated FASB-IASB Standards offer readers an in-depth understanding of the attempts being made to establish a high-quality set of international accounting standards, creating a unified front in finance and accounting.
  • Revised Financial Accounting Standards Board (FASB) documents provide a new conceptual framework, equipping students with the necessary tools to better understand financial reporting. 
  • New research and current statistics ensure that readers have access to real-world knowledge and applicable paradigms.
  • Student Research Questions on recent scholarship are included to engage readers in analytical thought.
  • Blackboard Question Pools to facilitate online testing.
  • Private Company Council (PCC) had been added to the FASB organizational structure to demonstrate to readers how effectiveness and communication are being enhanced.


  • Recent Accounting Standards Updates (ASU) keep readers savvy to industry development.
  • Recent International Financial Reporting Standards (IFRS) allow your students to always be up to date with leading advancements in reporting.
  • Current research findings offer readers comprehensive coverage of both theory and practice in the world of accounting and finance.
  • Top academic journals are cited to deliver a solid introduction to the challenges within international accounting.
  • Top academic journals are cited to deliver a solid introduction to the challenges within international accounting.
  • Technical aspects and issues are frequently supplemented by practical examples from sources such as The Wall Street Journal, offering readers a relevant understanding of financial accounting and its applications.

For instructors

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