Task Team of FUNDAMENTAL ACCOUNTING School of Business, Sun Ya !

sen Uni"e#si $

Lesson notes Lesson 1: Introduction to Accounting Learning Objectives %& Un'e#s an' he conce( s of economic man an' na u#e of fi#m f#om he (e#s(ec i"e of economic man& )& A((#ecia e he #us issue an' he uni*ue #ole of accoun in+ in #us ,uil'in+ an' main ainin+& -& Com(#ehen' he conce( of Economic Da#.inism an' i s im(lica ion an' he selec ion of #us in+ mechanism& /& Un'e#s an' he o#i+in an' 'e"elo(men of accoun in+ 'isci(line& Teaching Hours S u'en s ma0o# in accoun in+ O he# s u'en s Teaching contents This lesson com(#ise of h#ee ma0o# issues, ha is, he na u#e of he fi#m 1(#elimina#$ issue2, "alue of accoun in+ 1co#e issue2, an' o#i+ins an' e"olu ion of accoun in+ 1co#e issue2& I follo.s he lo+ic a##a$ in he sec ions ,elo.3 Fi#s , a *ues ion is #aise'3 .e#e he#e such (osi ions as accoun an s a he Moun ain Lian+4 5h$ 'i' accoun in+ e6is e"en in he ,#o he#hoo' of he Moun ain Lian+, .he#e f#ien'shi( an' lo$al $ 'es(ise' he ma e#ial #ichness4 The#e lies a (#o,lem of human na u#e, on .hich .e ,ase ou# 'iscussion of he na u#e of he fi#m, in #o'ucin+ he #us issues #ela in+ o he efficienc$ of he fi#m7s o(e#a ions& Then .i h he hou+h s of Economic Da#.inism, .e e6(lo#e he "alue of accoun in+, .hich is (#o"e' a lo.e#!cos 'e"ice of #us & No. ha accoun in+ is in e#.o"en .i h human #us , he 'iscussion on he o#i+ins an' e"olu ion of accoun in+ ,ecomes an easie# ask& The ins #uc o# ma$ use he ,ack+#oun' kno.le'+e of his o#$, an h#o(olo+$ o# e"en he no"el $ in Min+ an' 8in+ '$nas ies, illus #a e he connec ion ,e .een he (#o+#ess of accoun in+ an' ha of echnolo+$ an' econom$& In he cou#se of his lesson, .e a'o( he conce( of 9EMM, ho.e"e#, he ins #uc o# nee' (a$ e6 #a a en ion o lea'in+ he s u'en s o a co##ec un'e#s an'in+ of he Economic Man "ie., hus fo#mula in+ a #a ional an' .ise "ie. of life in a 0oin effo# of ci"il e hical e'uca ion, he#efo#e in e+#a in+ he (e#sonal "alue .i h social "alues, (e#sonal fa e an' social 'es ina ions& Fo# ins ance, he na u#e of an Economic Man 'eman's he ma6imi:a ion of (e#sonal in e#es s, hus #eali:in+ his ma6imi:a ion ,$ #es(ec in+ he in e#es s of o he# (eo(le an' he socie $& No ma6imi:a ion of (e#sonal in e#es s can ,e achie"e' .i hou he (#emise ha he in e#es s of o he#s an' he socie $ a#e fi#s sa isfie', .hich is illus #a e' in an ol' sa$in+, ;To +i"e +oes fi#s han o ake<& This "ie. is also a((lie' in he in!class 'iscussions&

- hou#s - hou#s

Task Team of FUNDAMENTAL ACCOUNTING School of Business, Sun Ya !sen Uni"e#si $

Nature of the Firm Na u#e of =uman Bein+s The o(enin+ *ues ion is .h$ he socie $ nee's accoun in+4 In he "ie. of Economic Da#.inism, if accoun in+ can c#ea e "alue o he socie $, he socie $ .ill nee' no accoun in+& 5ha is he "alue of accoun in+4 To con"e# an a,s #ac issue in o a conc#e e one, .e ask his *ues ion, ins ea', in an al e#na i"e .a$, ha is, .e#e he#e such (osi ions as accoun an s a he Moun ain Lian+, an' .h$ accoun in+ .as nee'e' he#e4 5hile lec u#in+, he ins #uc o# can a'0us hese *ues ions acco#'in+ o his>he# o.n #ea'in+, fo# ins ance, .ho .as he accoun an in he ?ia7s Famil$ an' .h$ 'i' he$ nee' his #ole 1a'o( e' f#om he #ea'in+ of the Dreams in the Red Mansions24 Of cou#se, some 'iscussion in his lesson mi+h se#"e as a (#elu'e o he la e# lec u#es on he in e#nal con #ols, fo# e6am(le, .h$ 'i' accoun in+ fail i s func ions ,o h a he Moun ain Lian+ an' a he 9e' Mansions4 Alon+ .i h he 'iscussion on .h$ he#e .e#e accoun in+ (osi ions a he Moun ain Lian+, .e :e#o in on he na u#e of human ,ein+s, co"e#in+ he o(ics such as he "i# ual o# "icious o#i+in of human life, he Maslo. @$#ami', he Economic Men of A'am Smi h& This 'iscussion #elies on he ins #uc o#7s sco(e of kno.le'+e an' in e#es s& Since his lesson is ,ase' on he economic assum( ion of Economic Men, he conce( is c#ucial& Some Chinese #a'i ional hou+h s mi+h ,e men ione' o he s u'en s, such as he Confucius , hose (#e"alen social cus oms, ,u#eauc#a ic ins i u ions an' e hical i'eas illus #a e' in he no"el $ of Min+ an' 8in+ '$nas ies& The na u#e of he fi#m Accoun in+ e6is s in all o#+ani:a ions #e(#esen e' ,$ he en e#(#ise, he#efo#e, accoun in+ e'uca ion is o#ien e' .i h ,usiness accoun in+& 5e 'emons #a e he fo#ms of en e#(#ises as a s a# in+ (oin & This sec ion #e"ie.s fo# a .hile he fi#m heo#ies, an' i 'i#ec s he a en ion of he s u'en s f#om he kno.le'+e a,ou he fi#m o kno.le'+e a,ou he mem,e#s in he fi#m, ,$ means of case 'iscussion 1such as En#on an' An'e#son& Fo# fu# he# #efe#ence, (lease #ea' Liu Fen+, )AA-Na u#e of he Fi#m3 a 'econs #uc ion heo#e ical anal$sis ,ase' on he failu#e of An'e#son, Guangdong Finance and Accounting, "ol& -2 Value of Accounting Since a fi#m consis s of human ,ein+s, .ho a#e in +ene#al economic men, he$ 'efini el$ 'eman' a mechanism of #us & O he#.ise, he fi#m can no su#"i"e, le alone +#o.& In he cou#se of human (#o+#ess, ne. .a$s an' mechanisms fo# #us ha"e ,een con inuousl$ e6(lo#e'& Fo# ins ance, he ea#l$ human socie $ .as con #ol ,$ mankin' o# o#+ani:a ions& In fac , un'e# he feu'alis em(e#o#shi(, ,loo' ies .e#e one of he mos im(o# an means of #us & The feu'alis 'efen'in+ s$s em also se#"e' as a 'e"ice of #us & Of cou#se, hese means a#e no onl$ e6(ensi"e, ,u also unsui a,le o he human nee's& Thus he$ ha"e ,een +#a'uall$ a,an'one'& F#om he (e#s(ec i"e of fi#m7s o(e#a ions an' economic func ions, man$ .a$s ha"e ,een in"en e' an' es e' in he human his o#$& Fo# ins ance, mankin' .as use' fo# con #ol in he ancien #a'in+ ,usiness in ?in+ '$nas $& 1 2& Mo# +a+e' con #ac s (#e"aile' in %BCA7s& =o.e"e#, hese s$s ems a#e limi e' ,$ he +eo+#a(hic loca ions 1e&+& con #ollin+ ,$ mankin'2, o# ,$ scales 1e&+& la#+e!scale fi#m 'eman'in+ an e6 #emel$ la#+e amoun of mo# +a+e2, he#efo#e #e'ucin+ hei#

Task Team of FUNDAMENTAL ACCOUNTING School of Business, Sun Ya !sen Uni"e#si $

+ene#ali $& Com(a#e' .i h hese, accoun in+ can e6(#ess he fi#m7s o(e#a in+ ac i"i ies in mone a#$ e#ms, .hich facili a es he summa#i:a ion an' com(a#ison& Thus i has ,een .i'el$ acce( e' as a #ela i"el$ efficien .a$& Of cou#se, .e can (#o"e i s efficienc$ in o he# .a$s such as he Economic Da#.inism& The essence of he Da#.inism can ,e e6(#esse' as ;su#"i"o#s a#e he fi es <, o# (u i in o he# .o#'s, .ha can su#"i"e is #ela i"el$ efficien & No.a'a$s, almos all o#+ani:a ions, (#ofi a,le such as fi#ms o# non!(#ofi a,le such as hos(i als an' schools, em(lo$ accoun an s, .hich (#o"e accoun in+ o ,e an efficien mechanism& In fac , as an ol' Chinese (#o"e#, sa$s, ;e"en he #eal ,#o he#s shoul' ha"e a clea#!cu ,ookkee(in+&< I is e"i'en ha a +oo' ,ookkee(in+ is ,e e# .a$ o main ain #us & =e#e is he uni*ue "alue of accoun in+3 a lo.e#!cos an' .i'el$ acce( e' mechanism of #us & Origins and volution of Accounting This sec ion is 'esi+na e' o (#esen a #ela i"el$ in e+#a e' accoun in+ "ie. o he s u'en s ,$ means of 'esc#i,in+ he o#i+ins an' e"olu ion of accoun in+& As accoun in+ is a lo.e#!cos 'e"ice of #us , i can ,e #ace' ,ack o he ea#l$ s a+e of human ci"ili:a ion& I can easil$ fi+u#e' ou ha , in ea#l$ imes, 'ue o he lo. (#o'uc i"i $, mankin' ha' o selec he mos necessa#$ hin+s fo# sake of su#"i"al, an' .#i en ci"ili:a ion coul' no 'e#i"e f#om he mo i"a ion of leisu#e an' en e# ainmen s& The ea#lies .#i en #eco#' of human ci"ili:a ion, such as #eco#'in+ .i h s #in+ ies an' cu#"in+ he .oo's, a#e all hi+hl$ #ela e' o accoun in+& ;@hoenician c#ea e' al(ha,e s fo# he onl$ (u#(ose of accoun in+< % < The ea#lies 'ocumen s in he .o#l' a#e accoun in+ #eco#'s an' 'ic iona#$, .hich is no occasional e"en & The$ ma'e he Sume# a necessi $& ;)& This sec ion is #ich in #efe#ences, .hich can ,e selec e' in he 'isc#e ion of he ins #uc o#& A&C&Li le on, a .ell!kno.n accoun in+ e6(e# , (u,lishe' in %B-- ,ook i le' as he Evolution of Accounting Before the 20th Century =e (oin s ou ha he 'ou,le en #$ s$s em .as in"en e' ,ase' on se"en (#emises3 he A# of 5#i in+, ,ookkee(in+ is fi#s a means of #eco#'in+ he A#i hme ic, he me ho'olo+$ of ,ookkee(in+ is com(ose' of con inuous sim(le calcula ions he @#i"a e @#o(e# $, ,ookkee(in+ onl$ conce#ns he #eco#'s of he fac s #ela in+ o (#o(e# ies an' #i+h s o hem he Mone$, o# he mone$ econom$, onl$ .hen ,ookkee(in+ con"e# s all (#o(e# ies an' hei# e6chan+es in o a unifo#m mone a#$ uni , i akes he fo#m of e6is ence he C#e'i , e&+& unse le' e6chan+e, if all e6chan+es a#e se le' on si e, he#e is no nee' fo# #eco#'in+ hem he Comme#ce, he local e6chan+e alone can no channel ,usiness(eo(le min's in o an in e+#a e' s$s em he ca(i al, .i hou i , ,usiness is al.a$s a small scale, no c#e'i s incu##e' 1(&%)2& I al$ e6ac l$ me all hese con'i ions hen& The 'ou,le en #$ s$s em .as o#i+ina e' in I al$, .i h he C#oss C#usa'e an' he a'"ance of financin+ in'us #$& I is su++es e' ha he ,ook the Era of Marco !olo, he C#oss C#usa'e, an' he Mon+olian Em(i#e 1con em(o#a#$ .i h Guo ?in+, he he#o of he "tories of #eroes Defeating Eagles $"hediao %ing&iong 'huan( ,e linke' o+e he#, o ensu#e a ,e e# un'e#s an'in+& The e"olu ion of accoun in+ is closel$ linke' o he (#os(ec s of he socie $ an' econom$& Follo.in+ I al$, he Ne he#lan's ,ecame he s #on+es economic (o.e# in he .o#l'& The au oma ic
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Woolf, A. H., A short history of accountants and accountancy, ondon, !"!#$%&'( )*+,-.''/01''23'4''5678'9:!""; <$ ) ='>4'?&@67'(&'4AB'678'9:!"CD <E F '$

Task Team of FUNDAMENTAL ACCOUNTING School of Business, Sun Ya !sen Uni"e#si $

,alance mechanism of he 'ou,le en #$ s$s em .as +#ea l$ im(#o"e'& Then he G#ea B#i ain, .i h i s in'us #ial #e"olu ion an' mo'e#n (lan s, fi#s sa. he a((ea#ance of cos accoun in+& La e#, .i h he ,oom of ca(i al ma#ke in he Uni e' S a es, he #a'i ional ,ookkee(in+ e"ol"e' in o financial accoun in+& Mean.hile, au'i in+ ,ecame a se(a#a e 'isci(line& The ,i# h of mana+emen accoun in+ .as ,#e' ,$ he economic +#o. h in he %BDA7s of he )A h Cen u#$& In he U&S&, 'ue o com(lica e' ca(i al ma#ke an' 'i"e#sifie' financin+ #esou#ces, financial mana+emen s oo' ou as an im(o# an su,0ec & The me'ia also #e(o# s ha , ,efo#e he C#ises of Sou heas Asia, he sala#ies an' (osi ions of CFO in =on+ Eon+ .e#e no #ema#ka,le a all, ho.e"e#, e"e# since hen, he$ ha"e ,een si+nifican l$ (#omo e'& I can se#"e as e"i'ence ha accoun in+ is 'e e#mine' ,$ he economic ci#cums ances& So fa#, .e ha"e 'e(ic e' a f#ame.o#k of accoun in+& Of cou#se, he im(ac s of echnolo+ical 'e"elo(men on accoun in+ shoul' ,e men ione' as .ell& Fo# ins ances, he .i'e use of com(u e#s enhances he accoun in+ (#ocessin+ ca(aci $, #e'uces he cos an' sa isfies mo#e 'i"e#sifie' nee's of info#ma ionF he in e#ne #eali:es he #eal! ime #ansmission of info#ma ion, .hich .ill lea' o a #e"olu iona#$ influence on accoun in+& A''i ionall$, his sec ion is also #ela e' o he ne. #en's in such 'isci(lines as he accoun in+ fo# chan+in+ (#ices an' mul ina ional en e#(#ise accoun in+& !edagogical Notes This is a +#ea conce#n of mos ,e+inne#s& Ou# e6(e#iences ell us o offe# a #ela6in+ en"i#onmen o he lea#ne#s& Fo# his #eason, he fi#s lesson #a#el$ men ions s(ecial accoun in+ e#ms& The$ a#e encou#a+e' o #ea' mo#e, es(eciall$ .i h a "ie. #ela e' o hei# s(ecial $& Fo# ins ance, #ea' hose sociolo+ical .o#ks o# no"els of he Min+ an' 8in+ '$nas ies .i h "a#ie' (e#s(ec i"es of #us , con #ol an' accoun in+& Be+inne#s mi+h .on'e# .ha accoun an s shoul' 'o in fu u#e& 5e *uo e some e6am(les f#om he "tories of #eroes Defeating Eagles $"hediao %ing&iong 'huan( , o illus #a e he close connec ion ,e .een he 0o, #es(onsi,ili ies an' he 0o,,e#7s ca(aci $& The s u'en is su((ose' o un'e#s an' ha in colle+e ime, he e6 ensi"e sco(e of kno.le'+e an' a,ili $ .ill ,e of +#ea im(o# ance o he fu u#e ca#ee# 'e"elo(men & Notes on "ase #iscussion The case is in en'e' fo# .o (u#(oses3 fi#s , he s u'en shall lea#n ho. o consul #ela e' ma e#ials an' his a,ili $ is "e#$ c#ucial o fu u#e in'e(en'en s u'ies& =in s can ,e (#o"i'e' o he s u'en , as o he .a$ of u ili:in+ he online #esou#ces& Secon', s u'en s a#e #e*ui#e' o 0u'+e he cou# "e#'ic s f#om he "alue of accoun in+, hus encou#a+e' o lea#n a,ou la.s, inclu'in+ he con"en ional an' common la.s, as .ell as he 0u'icia#$ (#oce'u#es& Ee$ (oin s %& F#om economic man o a coali ion of in e#es of economic man& )& The #ela ion ,e .een #us an' human na u#e an' i s im(lica ion o co#e "alue of accoun in+& -& The #ela ion ,e .een economic 'e"elo(men an' accoun in+ 'e"elo(men & $eading material

Task Team of FUNDAMENTAL ACCOUNTING School of Business, Sun Ya !sen Uni"e#si $

%1Chancello#, E'.a#', Devil )a*e )he #indmost, A history of financial s+eculation, Fi#s @lume @#in in+, )AAA& )1Jensen, Michael C. and Meckling, William H., "The Nature of Man" . Michael C. Jensen, FOUN !T"ON# OF O$%!N"&!T"ON!' #T$!T(%), Har*ard Uni*ersit+ ,ress, -../, and Journal of !00lied Cor0orate Finance, -..1 htt0233ssrn.com3a4stract5617-1Li le on, A&C&, Accounting Evolution to ,-00, Ame#ican Ins i u e @u,lishin+ Co&, Ne.& Yo#k, NY, %B--& /1Shille#, 9o,e# , .rrational E&u/erance, B#oa'.a$ Books, NY, )AA%&