Module Identifier AC31010  
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 TypeAssessment Length/DetailsProportion
Semester Exam2 Hours  100%

Learning outcomes

After completing this module students should be able to:


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

** 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 ( and will be distributed in the first lecture


This module is at CQFW Level 6