Accounting Auditing and Control D, 30 hp

Innehåll

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

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 ECTS
This module is relevant for students who are contemplating careers in accounting, auditing, corporate finance, investment banking, security analysis, equity research, and financial consulting. It should also be of great interest and benefit to anyone considering the purchase or sale of a business. It deals with the analysis of financial statement information and the use of this information for business strategy analysis, performance evaluations and investment decisions. The module integrates accounting, finance, economic theory, and empirical research into a financial statement analysis and valuation framework. The primary purpose in presenting the module is to provide students with relevant theories, methods, and models for valuing companies and their securities, primarily equity (common stock). A spreadsheet program is used throughout the module as a practical tool for conducting financial statement analysis and valuation, including the creation of forecasted income statements and balance sheets (pro-formas). A brief summary of topics includes: models of shareholder value and a comparison of accounting and discounted cash flow approaches to valuation; analysis of the firm’s profitability, growth, and value generation; forecasting of earnings and cash flows and pro forma analyses; and analysis of price-earnings and price-to-book ratios.

In addition, students are introduced to what good scientific practice means, how students and instructors can create and maintain a constructive learning environment while preventing misconduct and fraudulent behavior such as plagiarism. Students are, therefore, required to carefully study the guide of ethical and professional behavior, which is aligned with the rules and regulations of Umeå University. Since knowledge of these rules and regulations are fundamental for coming courses and thesis writing this module includes a web-based test to ensure that students understand how to follow these guidelines in practice.

Expected learning outcomes (ELO)
After completing this 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 analysis, forecasting and valuation
•  analyze value drivers and financial measures, e.g., profitability, growth, P/B and P/E ratios, and their relations to value
• forecast relevant value drivers and other quantities needed for valuation including the development of pro-forma financial statements
• explain the relations between accounting standards, e.g. IFRS and US GAAP, accounting methods, accounting quality and value
• describe and apply ethical/professional learning and research conduct

Generic ELO:

• work efficiently 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
• use a spreadsheet program as a tool in financial statement analysis and valuation
• take responsibility for own work in a professional and ethical way

Focus of instruction
The core topics of this module are covered by lectures, seminars, research articles (max 40 pages), cases, projects and computer exercises utilizing a spreadsheet program. Students are expected to take an active part in every aspect of the module.

Examination modes
Examination is based upon a written comprehensive individual exam and on successful completion of a project. Furthermore, each and every student has to pass the web-based test on ethical behavior and professional conduct. A passing grade is required for each part of the module.

Module 2.   Advanced management accounting, 7.5 ECTS
According to the Institute of Management Accountants, management accounting is the internal business-building role of accounting and finance professionals, who design, implement, manage, and report on internal accounting systems that support effective decision support, planning, and control over the organization’s value-creating operations. Management accounting and finance professionals directly support an organization’s strategic goals. Management accounting is about creating value, not just measuring it.

Management accountants are strategic financial management professionals who integrate accounting expertise with advanced management skills to drive business performance inside organizations. They serve as trusted partners to executives in all areas of an organization, offering the expertise and analysis necessary for sound business decisions, planning, and support. Management accountants monitor, interpret, and communicate operating results, evaluate performance, control operations, and make decisions about the strategic direction of the organization. They understand the business formula for delivering value to the customer, arriving at strategies for identifying, developing, marketing, and evaluating a product or service throughout its entire life cycle.

This advanced management accounting course module builds on previous training in accounting from a value-based management perspective. The focus of contemporary management accounting is on the enhancement of shareholder value through customer-driven value creation.

Students’ knowledge, insights, and analytical skills related to the way corporate managers design, and utilize planning and management control systems to implement strategies will be enhanced in this module. Techniques of the management control processes are studied and behavioral considerations involved in the use of these techniques are discussed. The student should also become aware of the varied and changing roles of the controller function and the management accountant.

Expected learning outcomes:
After completing this module, the student should have:
Knowledge and understanding to

• describe the roles management accounting systems have in organizations;
• assess the consequences of management accounting system changes;
• have an ability to work with the theoretical and research based knowledge in the area of management accounting;
• make the best use of their knowledge of primary contemporary management accounting techniques
• be well prepared for the varied and changing roles of the controller function.

Professional Skills to

• assess the role of information relating to the controller function in an organisation;
• communicate, negotiate and report financial and non-financial information within a management team;
• be able to act as a catalyst, facilitator and management accounting change agent in organisations.
• produce 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. 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.

Readings
Requiring reading for the module includes cases, chapters, and articles contained in the assigned textbooks and supplementary materials. The lectures in the course module will be used to cover both conceptual and computational aspects of management accounting measurement topics. Class sessions will be organized around cases and team activities–debates and panel discussions. Written work will take the form of homework assignments and written case analyses.

Class participation
This class depends on a student’s own participation. At this point of the Master’s curriculum, a substantial part of learning comes from other students. It is important and essential for this course module that each student brings in their own experience and expertise. In addition to attending class (which is required), students should be prepared to comment on assigned cases or articles and to discuss the analysis presented in class. Part of the excitement and the benefit derived from this module is due to the diversity of experience of the participants of this class.

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.

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:

• describe 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: deferred taxes, revenues, investment property, financial instruments, pensions, share-based payments and impairment of assets (including impairment of goodwill)
• 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 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.

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
• analyse audit quality, ethics and independence from an auditor’s and investor’s perspective
• identify the steps in preparing the audit plan 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 tests are suitable for auditing of different financial statement items, such as sales, accounts receivables, inventories, liabilities and property, plant and equipment
• explain how audit evidence is evaluated and how findings are reported to outside interested parties
• assess how the concepts of risk and materiality are interrelated based on the audit risk model

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.

Förväntade studieresultat

See respective module.

Behörighetskrav

Univ: Företagsekonomi C, 15 hp. En B. Svenska för grundläggande behörighet för högskolestudier (om kursen ges på svenska).

Undervisningens upplägg

See respective module.

Examination

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 literatere 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.

Övriga föreskrifter

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.