Module Information

Module Identifier
Module Title
Academic Year
Semester 1
AC11020 (together with AC10510 and AC10710)

Course Delivery

Delivery Type Delivery length / details
Lecture 15 Hours.
Seminars / Tutorials 4 Hours.


Assessment Type Assessment length / details Proportion
Semester Exam 2 Hours   Unseen written examination  70%
Semester Assessment Written coursework  Students may, subject to Faculty approval, have the opportunity to resit this module, normally during the supplementary examination period  10%
Semester Assessment Written coursework  20%
Supplementary Exam 2 Hours   Supplementary examination  Unseen written examination  70%
Supplementary Assessment Repeat failed element  10%
Supplementary Assessment Repeat failed element  20%

Learning Outcomes

On successful completion of this module students should be able to:

* Discuss the implications of corporate governance developments for financial reporting and corporate performance

* Examine the use of financial information data for evaluating corporate performance

* Understand the factors that help to explain a firm's choice of accounting policies and discuss their implications for earnings management

* Evaluate the techniques and limitations of cross-sectional and time series analysis and discuss their application for evaluating corporate performance including the prediction of corporate failure

* Understand the relationship between accounting information and share prices


This module focuses on the role of corporate financial information in assisting external decision makers i.e. economic agents external to the firm concerned. An important element of the available information concerns performance. However, measuring a company'r performance is a subjective process. In exercising judgment prepares of financial reports can also be subject to a number of economic incentives which can introduce bias into the reporting process. The resulting outcome of the reporting process can therefore represent a trade off between the incentives of the information producers and the needs of external decision makers. This can be problematical because, by definition, external decision makers may be unable to observe directly the processes and judgements involved nor always observe the incentives facing prepares.

Brief description

This module examines:

The information demands made on firms and the incentives they face in responding,
The methods external users can employ in analysing financial information,
The contrasting information relevance and valuation roles for financial information, and
The consequences of the incentives facing the various parties involved on the financial reporting process


The module content is delivered in five sections covering:
  • Factors influencing the demand and supply of financial information.
  • Cross sectional and time series analysis of accounting data including earnings prediction and event prediction
  • The theoretical and empirical relationship between accounting earnings and returns
  • Factors influencing accounting policy choice and earnings management
  • The valuation relevance of financial statement information including methods and implications.

Transferable skills

Students taking this module will have the opportunity to develop and practice a wide range of transferable skills. In lectures students will develop listening and note taking skills. In preparation for tutorials students will develop their reading, note taking, analytical, independent research, writing and IT skills. Tutorial discussions will help students to develop their listening, explaining and debating skills, as well as team work and problem solving. The examination will test students' analytical and writing skills under time constaints.

Reading List

General Text
In addition to the above texts students are required to read a number of articles. A full reading list and module outline is available via Blackboard ( and will be distributed in the first lecture Barker, Richard Determining value : valuation models and financial statements Key texts Pearson Education Primo search Mulford, Charles The Financial numbers game : detecting creative accounting practices Key texts Wiley Primo search Rees, William Financial Analysis Key texts 2nd edition Prentice-Hall Primo search Scott, William R. Financial Accounting Theory Key texts 3rd edition Prentice-Hall Primo search Watts, Ross L. Positive Accounting Theory Key texts Prentice-Hall Primo search


This module is at CQFW Level 6