MBA and Sloan Elective Courses: Accounting
ACCT 311. Global Financial Reporting
This course is designed to enhance students' understanding of current financial reporting issues through a detailed analysis and comparison of U.S. and International Financial Reporting Standards. The course will cover the development of accounting standards, implementation of these standards, and how to interpret output from these standards. The course highlights intermediate and advanced financial reporting topics including consolidation, foreign currency transactions, foreign currency translation, derivatives, hedging, leases, revenue recognition, variable interest entities, and equity compensation. The course also focuses on evaluating emerging financial reporting issues such as proposed financial reporting standards put forth by U.S. or international standard setting agencies. This course should help students better understand the environment governing financial reporting and how firms develop financial statement information within this environment.
ACCT 312. Evaluating Financial Statement Information
This course aims to develop students’ understanding of the relation between accounting numbers and underlying economic activity, and to develop students’ ability to use accounting numbers in several decision contexts including evaluating profitability, forecasting future earnings and cash flows, selecting an appropriate financial reporting strategy and assessing risk. Accordingly, the course will focus on several factors essential to this goal. These include understanding (1) the business environment a firm operates in, its contracting practices and their implications for what accounting principles are applied and judgments required; (2) the process that generates accounting numbers and its implications for the quality of those numbers for decision purposes; (3) approaches for assessing the sustainability and growth of a firm's revenues and earnings using financial statement information; and (4) approaches to evaluate earnings quality, the risk of earnings restatements and bankruptcy. This course should be of value to students who will be in senior positions within corporations and will determine financial reporting policies, as well as those outside corporations who will make investment or other decisions at least partially based on financial statement information.
ACCT 313. Accounting-Based Valuation
This course is designed to develop students’ ability to interpret and use financial accounting information in equity valuation contexts. The perspective taken is that of an outsider relying on publicly available financial information for investment purposes, and builds heavily on the residual income framework for equity valuation. The first half of the course covers financial statement analysis-based tools for assessing a firm’s current financial performance and economic condition, including traditional ratio analysis and financial distress/bankruptcy prediction models. The second half of the course introduces the accounting-based valuation framework, and develops the link between financial statement analysis, forecasting and valuation. This portion of the course focuses on techniques for forecasting specific income statement and balance sheet items, the creation of pro-forma financial statements, and the implementation of several accounting-based valuation models. The capstone to the course is the completion of a comprehensive equity valuation project. The course will be of value to those students who anticipate making investment or credit decisions at least partially based on financial statement information.
ACCT. 317. Managerial Accounting: Performance Measurement, Compensation, and Governance
This course will begin with an introduction to the concepts and tools of managerial accounting. The first part of the course covers alternative costing methods and illustrates how the resulting cost information can be used for decision making. This part of the course will examine cost and profitability concepts, cost allocation, transfer pricing, activity based costing, and customer profitability analysis. The second part of the course will examine the choice of financial and non-financial performance measures for evaluating business strategies and business unit success. This part of the course will cover the use of economic measures of performance, balanced scorecard approaches, and methods to develop explicit business models. The final part of the course will examine executive compensation and topics such as compensation arrangements used for senior and division manager remuneration, measurement of total compensation, valuation of stock options, and the impact of compensation choices on managerial behavior and firm performance.
ACCT 516. Valuation in Emerging Economies
The course is designed to introduce students to the corporate governance and transparency issues faced by managers and investors in emerging economies, and the impact these problems have on firm valuation and capital market behavior. The goal of the class is to develop a robust framework for forecasting future earnings, cash flows and dividends and estimating firm values in these countries. The first half of the course will discuss the impact that weak legal, political and regulatory institutions have on financial reporting practices, corporate governance and capital market behavior, and develop an understanding of the incentives and institutional arrangements that exacerbate or mitigate these effects. The second half of the course will address the following question: how does an investor value an investment opportunity in an economy with weak institutions? Evidence from recent research on these topics will be presented and discussed throughout the course, with special emphasis placed on China and India. The capstone to the class will be a final project. The final project will focus on the analysis of a specific emerging economy?s capital market and institutional environment, conducted in the context of determining the investment potential (as a minority shareholder) of a publicly-traded firm in that market.
