Accounting Auditing and Control D, 30 Credits

Contents

This course covers topics related to financial reporting, how management accounting can be used to create value in companies, financial statement analysis and auditing.

The course is given and examined in English.

Module 1. Advanced financial statement analysis and valuation, 7,5 ECTS
Module 2. Advanced management accounting, 7,5 ECTS
Module 3. Advanced financial accounting, 7,5 ECTS
Module 4. Advanced auditing, 7,5 ECTS

Module 1. Advanced financial statement analysis and valuation, 7.5 ECCTS
The module aims to provide students with relevant theories, methods and models for valuing companies and their securities, primarily equity (common stock). The module deals with the analysis of financial statement information and the use of this information for business strategy analysis, performance evaluation and investment decisions. Accounting and discounted cash flow approaches to valuation are discussed as are forecasting of dividends, earnings, cash flows and pro forma analyses. During the module, students will also be introduced to the code of academic conduct, e.g. referencing, or how to avoid plagiarism and cheating.

Expected learning outcomes:
After successful completion of the module, the student should be able to:

• value the equity, operations and debt of companies using different valuation approaches/models and financial statement information
• analyze and reformulate financial statements to uncover a firm’s business strategy and value drivers so as to facilitate forecasting and valuation
• analyze market prices, value drivers and financial measures, e.g., profitability, growth, P/B and P/E ratios, and their relations to estimated fundamental value
• explain the relations between accounting standards, e.g. IFRS and US GAAP, accounting methods and value
• practice working in teams in which the members may differ as regards field of specialization, gender, nationality and cultural background
• conduct, write, present and critically review an equity research project
• describe, recognize and apply the code of academic conduct to the student’s own work.

Focus of instruction:
The core topics of this module are covered by lectures, seminars, literature i.e. text book and research articles, cases and projects. Students are expected to take an active part in every aspect of the module.

Examination modes
Examination is based on a written comprehensive exam, on successful completion of a project and an individual exam on the code of academic conduct.

Module 2.   Advanced management accounting, 7.5 ECTS
Management accountants are strategic financial management professionals who integrate accounting expertise with advanced management skills to drive business performance, with the postulate that the sustainability of a firm depends on its ability to recognize and benefit from its value drivers. With a solid theoretical framework, the course addresses modern issues in management control and performance measurement. The focus is on the enhancement of shareholder value through customer-driven value creation from a value-based management perspective. A second purpose of the course is to enhance students’ knowledge and analytical skills related to the way managers design, and utilize planning and management control systems to implement strategies. Techniques of the management control process are studied and behavioural considerations are discussed. The management accounting systems studied should provide information on the value drivers of organizations, to assist in aligning the self-interests of management with long-term shareholder wealth. The students will also become aware of the varied and changing roles of the management accountant.

Expected learning outcomes:
After completing this module, the student should:

• analyse the roles management accounting systems have in organizations and make the best use of the knowledge of contemporary management accounting techniques;
• be able to act as a catalyst, facilitator and management accounting change agent in organisations and be well prepared for the varied and changing roles of the controller function
• demonstrate an  ability to work with the theoretical and research based knowledge in the area of management accounting;
• demonstrate an ability to communicate, negotiate and report financial and non-financial information within a management team by means of detailed and coherent reports (both written and spoken) in matters related to management accounting.

Focus of instruction
The developments of the management accounting subject, techniques and concepts are presented during lectures.  Requiring reading for the module includes cases, chapters, and articles contained in the assigned textbooks and supplementary materials. Students will become familiar with quantitative issues through numerical examples, exercises and cases. They are expected to take an active part in discussions on the development of the field, literature and article seminars and reporting about case studies. They will be given a number of assignments, leading to continuous assessment. Course work will be done individually and in small groups. Course work must reach an advanced level of knowledge and understanding of the subject.

Examination modes
Examination is based upon a written comprehensive individual exam and group assignments. A passing grade is required for each part of the module. See also note 6 below.

Module 3.   Advanced financial accounting, 7.5 ECTS
The main objective in presenting this module is to consolidate students’ understanding of the IFRS standards and students’ ability to utilize aspects of accounting theory to resolve major reporting issues. International Financial Reporting Standards (IFRS) have received increasingly favourable attention during the past years and are currently used by listed companies in around 120 jurisdictions around the world

Expected learning outcomes
After completing this module, the student should be able to:

• understand and apply the IFRS accounting rules in intermediate as well as more advanced situations. Examples of more advanced topics covered at the course module are: segment reporting, interim reporting, fair value measurement, valuation issues in business combinations, financial instruments, hedging, pensions and share-based payments.
• critique accounting choices from an ethical point of view
• identify places where there is accounting flexibility in the IFRS standards and evaluate the appropriateness of companies’ accounting policies and choices
• evaluate the credit risk of companies using financial statements.
• use accounting principles and theory in order to evaluate and criticize accounting standards
• analyze the contents of corporate responsibility reporting and other similar types of reports prepared by publicly listed companies.

Focus of instruction
This course module is presented through lectures, cases and seminars.

Examination modes
Examination is based upon a written comprehensive individual exam and group assignments. A passing grade is required for each part of the module. See also note 6 below.

Module 4.   Advanced auditing, 7.5 ECTS
This module was created to give students a solid theoretical and practical foundation in auditing. It covers central topics of auditing, such as, risk and materiality assessment, the planning of auditing, the auditing process and auditors’ reporting. Professional ethics and independence issues are also discussed during the course module. The course module is principally based on the International Standards of Auditing (ISAs) that have had a great impact on the auditing standards in Sweden as well as internationally.

Expected learning outcomes
After completing this module, the student should be able to:

• explain and discuss the factors that creates a demand for auditing and effects the value of auditing and analyse the factors related to audit quality and auditor independence,
• analyse ethical dilemmas against existing regulatory framework and the expectations of the general public,
• identify the steps in the audit process and explain the general types of audit tests/procedures
• explain  internal control , discuss why internal controls are important, how control risks are assessed and ultimately how the status of internal controls affect the focus of the audit
• examine what mix of audit procedures to be performed and what types of audit tests that are most  suitable based on the risk and materiality assessment made by the auditor
• explain how audit evidence is gathered and evaluated and how findings are reported to outside interested parties

Focus of instruction
The core topics will be covered by lectures and seminars, in which students are expected to take an active part. Cases related to the topics will also be used.

Examination modes
Examination is based upon a written comprehensive individual exam and group assignments. A passing grade is required for each part of the module. See also note 6 below.

Expected learning outcomes

See respective module.

Required Knowledge

University: Courses in Business Administration (75 ECTS) At Basic level (A-level) and Intermediate level (B-level) a minimum of 60 ECTS in Management, Marketing, Accounting and Finance courses. At least 15 ECTS Accounting (financial accounting, financial statement analysis or management accounting) as well as 7.5 ECTS in Finance. At the C-level (Bachelor), a minimum 15 ECTS.

Language: Proficiency in English equivalent to Swedish upper secondary course English B (IELTS (Academic) with a minimum overall score of 6.5 and no individual score below 5.5. TOEFL PBT (Paper-based Test) with a minimum score of 575 and a minimum TWE score of 4.5). TOEFL iBT (Internet-based Test) with a minimum score of 90 and a minimum score of 20 on the Writing Section).

Form of instruction

See respective module.

Examination modes

See also above under respective module.

The following grading system will be used:
Pass with distinction (Väl godkänd, Vg, 75% or more),
Pass (Godkänd, G, 50% or more)
Fail (Underkänd, U, less than 50%).

To receive the grade Pass with distinction (Väl godkänd) on the course, the student must have achieved that grade in three of the four modules.

Students who fail to present a photo ID at the occasion of a written examination cannot have their results registered.

In case of failure on seminar participation or individual and group assignments, compensating assignments must be completed in accordance with instructions given, no later than two weeks after the completion of the module.

Students who do not pass at the time of the normal written examination will be offered an opportunity to sit a further examination within a month. Beyond that, additional examination opportunities normally arise every academic year, one week prior to the start of the autumn term.

When a student has failed an examination on two occasions, he or she has a right to have another grading teacher. A written request for an alternative examiner should be handed to the director of studies no later than two weeks before the next examination opportunity.

Rules and regulations concerning the production of academic texts and correct referencing will be applicable to all written assignments. (see instructions in the Thesis manual. Thesis writing in Business Administration.) Urkund records may be used for control.

Lectures are normally not obligatory. However attendance is expected because the lectures are designed to facilitate students towards achieving course specific learning objectives. In addition lectures often provide insightful explanations of, and can supplement and provide contrast to, the course literature and other relevant course materials.

Student who has passed an examination cannot retake the examination to get a higher grading.

Grades on the course are awarded when students have passed all examinations and compulsory course elements.

Academic credit transfer
Academic credit transfers are according to the University credit transfer regulations.

Other regulations

This is a course at the D-level in an MSc-degree at Umeå University. The course can also be included in study programs in Business Administration and Economics at Umeå School of Business and Economics.