printer friendly pageACCT 210: Financial Accounting
In general terms, financial accounting is the measurement of economic activity for decision-making. Financial statements are a key product of this measurement process and an important component of firms' financial reporting activities. In the past few years, financial accounting came to the forefront of the national consciousness as the stock market continued to decline amid faltering investor confidence. The crisis of confidence began with the revelation of accounting irregularities at some of the United States largest companies. However, the implications extended well beyond the effects of individual accounting or company failures: investors seemed to lose confidence in the integrity of the financial system as a whole. The capital markets, whose relative efficiency is based largely on the timely dissemination of relevant and reliable financial information, were at risk. Clearly, the importance of understanding accounting has never been so salient.nnnThe objective of this course is not to train you to become an accountant but rather to help you develop into an informed user of financial statement information. While financial statement users face a wide variety of decisions, they are often interested in understanding the implications of financial statement information for the future cash flows and earnings potential of a firm. We will focus on understanding the mapping between underlying economic events and financial statements, and on understanding how this mapping affects inferences about future profitability. Because annual reports are somewhat formidable, we will spend time familiarizing ourselves with how firms present the information for various accounts in the financial statements, including the footnotes. We also will discuss the role of the various institutions involved in the reporting process. By understanding the environment in which financial reporting takes place you will be in a better position to evaluate critically the disclosures made by firms in published financial statements.nnnThe following learning objectives will be emphasized: (1) familiarity with the transactions businesses engage in, (2) fluency in accounting terminology, (3) understanding the structure that maps transactions into accounting numbers, (4) understanding the rationale for various accounting methods, and (5) awareness of the judgment involved and the discretion allowed in choosing accounting methods, making estimates, and disclosing information in financial statements.
Terms: Aut
| Units: 4
Instructors:
Beyer, A. (PI)
ACCT 212: Managerial Accounting: Base
Managerial accounting refers to the preparation and use of information for internal planning, control, coordination, and performance evaluation purposes. This orientation contrasts with financial accounting where the focus is on accounting disclosures for parties external to the firm.nnnThe majority of the course covers the vocabulary and mechanics of cost accounting, issues involved in the design of an internal accounting system, and the role of accounting in decisions concerning resource allocation and performance measurement. Included in this are discussions of capacity costs, inter-departmental allocations, and activity-based management in manufacturing and service environments. We will pay particular attention to the trade-offs embedded in the choice of internal accounting systems, as well as ways in which to attenuate the problems created by these trade-offs.nnnThe second part of the course examines the process of evaluating the performance of individuals, business units and firms. We will study the optimal choice of performance metrics for incentive purposes and the rationale behind the balanced scorecard, as well as the importance of designing appropriate transfer prices for intrafirm transactions.
Terms: Spr
| Units: 3
Instructors:
Rajan, M. (PI)
;
Reichelstein, S. (SI)
ACCT 213: Financial Accounting - Accelerated
This course develops students' ability to read, understand, and use corporate financial statements. The course is oriented toward the user of financial accounting data (rather than the preparer) and emphasizes the reconstruction and interpretation of economic events from published accounting reports. The course is geared toward students with some familiarity in dealing with financial statement information and allows for deeper coverage and discussion in class.
Terms: Aut
| Units: 4
Instructors:
Kasznik, R. (PI)
ACCT 215: Managerial Accounting: Accelerated
This course provides a comprehensive introduction to the concepts and tools of managerial accounting. The first part of the course demonstrates how management can rely on internal accounting information to measure and manage the profitability of individual products and customers. As part of that analysis, we examine alternative costing methods and illustrate how the resulting cost information can be used for decision making. The second part of the course focuses on the role of the internal accounting system in evaluating managerial performance and in coordinating the activities among business units within the firm. Our focus here will be on performance metrics that enable effective decentralization by aligning the objectives of individual business units with the overall corporate goals.
Terms: Spr
| Units: 3
Instructors:
Marinovic, I. (PI)
ACCT 219: Sloan: Accounting
A characteristic of business is the extensive use of accounting data. The financial accounting course has the general objective of developing students' understanding of the nature, scope, and limitations of accounting information. To achieve this objective the course attempts to: (1) develop students' understanding of the conceptual accounting framework, including the objectives of financial reporting, and (2) develop students' ability to understand and critically evaluate the financial disclosures made by corporations. An issue of particular interest will be the managerial incentive aspects of accounting information and disclosures.
Terms: Aut
| Units: 4
Instructors:
Guttman, I. (PI)
ACCT 311: Global Financial Reporting
This course is designed to enhance students' understanding of current financial reporting issues through a detailed analysis and comparison of U.S. and International Financial Reporting Standards. The course will cover the development of accounting standards, implementation of these standards, and how to interpret output from these standards. The course highlights intermediate and advanced financial reporting topics including fair value accounting, asset securitization, consolidation including special purpose entities, foreign currency translation, derivatives and hedging, leases, revenue recognition, pensions, and equity compensation. The course also focuses on evaluating emerging financial reporting issues such as proposed financial reporting standards put forth by U.S. or international standard setting bodies. This course should help students better understand the environment governing global financial reporting and how firms develop financial statement information within this environment.
Terms: Aut
| Units: 4
Instructors:
Barth, M. (PI)
;
Blankespoor, E. (SI)
ACCT 313: Accounting-Based Valuation
This course is structured to develop students' ability to interpret and use financial accounting information in equity valuation contexts. The perspective taken is that of an outsider relying on publicly available financial information for investment purposes, and builds heavily on the residual income framework for equity valuation. The first half of the course covers financial statement analysis-based tools for assessing a firm's current financial performance and economic condition, including traditional ratio analysis. The second half of the course introduces the accounting-based valuation framework, and develops the link between financial statement analysis, forecasting and valuation. This portion of the course focuses on techniques for forecasting specific income statement and balance sheet items, the creation of pro-forma financial statements, and the implementation of several accounting-based valuation models. The capstone to the course is the completion of a comprehensive equity valuation project. In addition to learning basic financial statement analysis tools and accounting-based valuation theory, students benefits from applying these tools and theories in the context of weekly cases and the final project. The course is structured for students to gain a deeper understanding of the economic pressures behind the analysis and valuation process by drawing upon and synthesizing concepts from microeconomics, corporate finance, corporate strategy, statistics and accounting. The course will be of value to those students who, as either senior managers or outsiders, anticipate making investment or credit decisions at least partially based on financial statement information.
Terms: Win
| Units: 4
Instructors:
Piotroski, J. (PI)
ACCT 317: Managerial Accounting: Performance Measurement, Compensation, and Governance
The course will examine the academic and professional controversies surrounding corporate governance and executive compensation. A basic framework will be developed to integrate the many important dimensions of corporate governance in the U.S. and international settings. The institutional features of corporate governance and executive compensation will be documented using the professional business and legal literatures. In addition, the scientific research in accounting, economics, finance, and organizational behavior will be used to provide insights into the measurement and consequences of observed corporate governance and executive compensation choices. After successfully finishing the course, a student should be able to (i) understand the debates about appropriate choices for corporate governance and executive compensation and (ii) critically evaluate the implications of academic and professional research studies on these controversial issues.
Terms: Spr
| Units: 3
Instructors:
Larcker, D. (PI)
ACCT 332: Mergers and Acquisitions: Accounting, Regulatory, and Governance Issues
This course covers various financial and economic issues related to mergers and acquisitions. For example, we review the financial reporting implications of business combinations (e.g., consolidation, the "acquisition" method), and income tax treatments of M&A transactions (e.g., taxable vs. non-taxable deals). We also examine corporate governance issues related to firms' decision to acquire or be acquired, the M&A regulatory environment (e.g., anti-trust), and other factors that can potentially shape the structure of M&A transactions. nnnIn covering these and other related issues, we will discuss both the theory and practice of mergers and acquisitions. To provide some specific context we will analyze specific M&A deals (e.g., the mergers of HP/Compaq, UpJohn/Pharmacia, and AOL/Time Warner; Oracle's hostlie takeover of PeopleSoft; and many more). In discussing these cases, we will examine the situation faced by the company, the issues surrounding the transaction, including the financial reporting implications, and focus on the managerial incentives and the judgment applied. We will also discuss some of the important strategies that underlay a successful negotiation. We will also review some of the related literatures in accounting, economic, and finance, to gain broader perspectives and insights into the financial issues associated with M&A transactions. Class time comprises mini lectures that introduce some of the more technical concepts, case discussions, and guest speakers who will offer additional perspectives on the subject matters.nnnThe course is co-taught by Ron Kasznik (GSB) and Safra Catz (Oracle Corporation). Ms. Catz is President of Oracle and a member of its Board of Directors. She has led Oracle through more than 50 acquisitions in recent years (including PeopleSoft, Siebel, BEA, and Sun Microsystems). Prior to joining Oracle in 1999, Ms. Catz was Managing Director at Donaldson, Lufkin & Jenrette, a global investment bank (now part of CSFB). Ms. Catz also serves on the board of directors for HSBC Holdings plc since 2008.
Terms: Aut
| Units: 3
Instructors:
Kasznik, R. (PI)
;
Catz, S. (SI)
ACCT 340: Alphanomics: Informational Arbitrage in Equity Markets
This is an advanced elective course on the economics of active investing in equity markets. The 2012-13 version of this class will be offered in two parts: A 4-credit class for the Fall quarter (
ACCT340), and a 2-credit class for the Spring quarter (
ACCT541). If you sign up for the Fall class, your spot on the Spring roster will be automatically reserved. However, you will still have the option at the end of the Fall quarter to opt out of the 2-credit Spring class.nnnThe Fall course (
ACCT340) is designed as a "start-up kit for an equity hedge fund." In the Fall quarter, we will cover some of the foundational skills needed to build and manage a portfolio of public stocks. There is no final exam. However, there will be a number of individual cases and a final group project. 25% of the grade will be based on class participation, and 75% will be based on cases and projects.nnnTowards the end of Fall, student who choose to continue onto the Spring course (
ACCT541) will form teams (of 4 to 6 each) and submit a proposal for a hedge fund product. Once their proposal is approved, each team will be given a $1 million paper portfolio. Students then manage this portfolio for the rest of the school year (their trades and portfolio statistics are automatically tracked).nn nnStudents enrolled in the Spring (
ACCT541) will reconvene in the second half of the quarter for a series of class lectures/talks as well as team presentations, summarizing their experience. The ACCT541 portion of the course will require each student group to make a class presentation, as well as turn in a written report. A separate grade will be assigned for
ACCT541. 25% of this grade will be based on class participation, and 75% will be based on the presentations and reports.nnnThe overall goal of this course is to improve student skills in assessing the relative attractiveness of individual companies, as well as in managing portfolio risk according to pre-specified targets. This is a hands-on course with an emphasis on experiential learning. Students will make extensive use of analytical tools in the new "Real-time Analytics and Investment Lab" (High-speed R.A.I.L.) facility in the Bass Center. As part of this course, students will design stock screens, conduct back-tests, do detailed company analyses, execute (virtual) trades, and manage portfolio risk.nnnBecause it is an advanced elective, students taking this class are expected to be well versed in core economic, accounting, and finance skills. Material covered in a second Financial Modeling course, as well as in Accounting 312 (Evaluating Financial Statement Information) and Accounting 313 (Accounting-based Valuation) will come in handy. However, none of these courses are required.
Terms: Aut
| Units: 4
Instructors:
Lee, C. (PI)
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