| Module Identifier |
AC31010 |
| Module Title |
FINANCIAL STATEMENT ANALYSIS |
| Academic Year |
2003/2004 |
| Co-ordinator |
Professor Kevin M P Holland |
| Semester |
Semester 1 |
| Pre-Requisite |
AC30820 |
| Course delivery |
Lecture | 12 Hours |
| |
Seminars / Tutorials | 3 Hours |
| Assessment |
| Assessment Type | Assessment Length/Details | Proportion |
|---|
| Semester Exam | 2 Hours | 100% |
|
Learning outcomes
After completing 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.
Aims
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?s 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.
This module examines the:
i. the information demands made on firms and the incentives they face in responding,
ii. the methods external users can employ in analysing financial information,
iii. the contrasting information relevance and valuation roles for financial information; and
iv. the consequences of the incentives facing the various parties involved on the financial reporting process.
Reading Lists
Books
** Should Be Purchased
Bill Rees (1995) Financial Analysis
2nd edition. Prentice Hall
W R Scott (2003) Financial Accounting Theory
3rd edition. Prentice-Hall, Toronto
** Recommended Consultation
R Barker (2001) Determining Value - Valuation Models and Financial Statements
Prentice Hall
C W Mulford and EE Comiskey (2002) The Financial Numbers Game: Detecting Creative Accounting Practices
John Wiley
R L Watts and J L Zimmerman (1986) Positive Accounting Theory
Prentice Hall
In addition to the above texts students are required to read a number of journal articles A full reading list and module outline is available via Blackboard (http://alto.aber.ac.uk) and will be distributed in the first lecture
Notes
This module is at CQFW Level 6