MBA and Sloan Elective Courses: Accounting
ACCT 210. Financial Accounting
This course develops students' ability to read, understand, and use corporate financial statements. The course is oriented toward the user of financial accounting data (rather than the preparer) and emphasizes the reconstruction and interpretation of economic events from published accounting reports.
ACCT 211. Management Accounting
This core 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. Not taught in 2009-10.
ACCT 212. Managerial Accounting: Strategic Cost Management and Control
The focus of this course is on understanding the many ways that firms account for, manage, utilize, and control costs. Included in this are discussions of inter-departmental allocations, joint costs and capacity costs, as well as the use of activity-based analyses in various settings. Throughout, we will highlight the process of identifying relevant costs for short-run and long-run decision making, and for carrying out product and customer profitability analyses. The second part of the course examines the process of evaluating the performance of firms and their business units. Included in this are issues related to transfer prices and measures of productivity. We will study the optimal choice of metrics for evaluating performance, and analyze the rationale behind the balanced scorecard.
ACCT 213. Financial Accounting—Accelerated
This course develops students' ability to read, understand, and use corporate financial statements. The course is oriented toward the user of financial accounting data (rather than the preparer) and emphasizes the reconstruction and interpretation of economic events from published accounting reports. The advanced sections are geared toward students with some familiarity in dealing with financial statements and allows for deeper coverage and discussion in class.
ACCT 215. Managerial Accounting: Value-Based Management
This core course provides a comprehensive introduction to the concepts and tools of managerial accounting. The first part of the course demonstrates how management can rely on internal accounting information to measure and manage the profitability of individual products and customers. As part of that analysis, we examine alternative costing methods and illustrate how the resulting cost information can be used for decision making. The second part of the course focuses on the role of the internal accounting system in evaluating managerial performance and in coordinating the activities among business units within the firm. Our focus here will be on performance metrics that enable effective decentralization by aligning the objectives of individual business units with the overall corporate goals.
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, liquidity and solvency. 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 314. Financial Statement Analysis
The purpose of this course is to develop students' ability to use financial statement information and related disclosures to (1) evaluate the underlying economics of a business, including the company's past and current performance, strategy, and competitive environment; (2) translate the current information set into forecasts of future performance and (3) incorporate the forecasts in a variety of valuation techniques to estimate the intrinsic value of the firm's equity and debt. The course uses both the latest practitioner-based techniques and tools and academic research on accounting-based forecasting and valuation methods. It also integrates several valuation techniques including discounted cash flow models, residual income models, and market multiple methods such as the price-to-earnings ratio and the market-to-book ratio. This course should be of interest to students who expect to be in senior decision-making positions within corporations where financial statement analysis, forecasting, and valuation are important skills. It should also be useful to students interested in investment banking, venture capital, investment management, or public accounting. The course emphasizes that to critically analyze financial statements (or any other piece of information) the user needs to understand the assumptions and estimates that go into the production of the information. In addition, one needs to understand the incentives of the person or organization delivering the message. With these ideas in mind, the focus of the class is to show how the predictive ability (and limitations) of financial statement information can be combined with other sources of information about a business in order to generate forecasts of future cash flows and earnings for use in decision making. Not taught in 2009-10.
ACCT 316. Valuation in Emerging Markets
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 framework for forecasting future earnings, cash flows and dividends and, ultimately, estimating firm value. 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, such as poor corporate transparency, minimal protection of investor rights, a self-serving government and/or legal systems that fail to enforce contracts? The course will focus on understanding the risks, uncertainties and limitations investors face in each of these settings, and outlining the type of adjustments that should be made to firm valuations and underlying earnings, cash flow and dividend forecasts. Evidence from recent research on these topics will be presented and discussed throughout the course. 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.
ACCT. 317. Managerial Accounting: Performance Measurement, Compensation, and Governance
The course will examine the academic and professional controversies surrounding corporate governance and executive compensation. A basic framework will be developed to integrate the many important dimensions of corporate governance in the U.S. and international settings. The institutional features of corporate governance and executive compensation will be documented using the professional business and legal literatures. In addition, the scientific research in accounting, economics, finance, and organizational behavior will be used to provide insights into the measurement and consequences of observed corporate governance and executive compensation choices. After successfully finishing the course, a student should be able to (i) understand the debates about appropriate choices for corporate governance and executive compensation and (ii) critically evaluate the implications of academic and professional research studies on these controversial issues.
ACCT 332. Mergers and Acquisitions: Accounting, Regulatory, and Governance Issues
This course covers accounting and economic issues related to mergers, acquisitions, and divestitures. In particular, we examine the financial reporting implications of corporate control changes (e.g., consolidation, the "purchase" and "acquisition" treatments, in-process-R&D), and the income tax implications of M&A transactions (e.g., taxable vs. non-taxable, "asset" vs. "stock", etc). We also examine corporate governance issues related to firms? decision to acquire or be acquired, the M&A regulatory environment (e.g., securities regulation, anti-trust), and other factors that potentially shape the structure of M&A transactions.
ACCT 340. Alphanomics: Informational Arbitrage in Equity Markets
This course focuses on the economics of informational arbitrage in equity markets. Our underlying premise is that stock prices are not established by fiat; they are the result of a costly and risky arbitrage process. We will seek to better understand the economics of this process, and to assess its risks/rewards in various settings. The course will cover some of the basic tools of informational arbitrage in equity markets, including: equity valuation, cash flow analysis, quality of earnings assessment, short-selling mechanics, portfolio risk management, and hedge fund performance evaluation. Our overall goal is to improve student skills in assessing the relative attractiveness of: (a) individual companies, (b) equity portfolios, and (c) fund managers.
ACCT 354. Analysis and Valuation for Event-Driven Investing
This Bass seminar is designed to develop students' ability to interpret and use financial accounting information in credit and equity valuation contexts. The course will focus on valuing the securities of companies undergoing significant changes as a result of litigation, restructuring, regulatory changes, mergers, spin-offs or significant industry shifts. Throughout the course, students will (1) enrich their understanding of how alternative economic, legal, political and regulatory outcomes affect the value of various components of a company's capital structure and (2) develop their ability to apply financial statement analysis to assess the likelihood and valuation implications of the events of interest. Event-driven investing follows the life cycle of companies as they revamp their corporate structures in response to economic and regulatory environments. To assess the probability of corporate events, investors must make judgments about the quality of a company's earnings and assets and understand how accounting policies may influence management's representations. Investors must also interpret how accounting policies function at various points in a firm's life cycle, influencing the quality of earnings for firms differently in different economic environments.
ACCT 506. Evaluating Earnings Quality
This seminar will introduce students to research on earnings quality. Specifically, the course will feature research on the factors that influence the informational role of earnings, and factors that affect how earnings provides information about future earnings, cash flows and share prices. Not taught in 2009-10.
ACCT 508. Trading Strategies and Fundamental Analysis
This class will teach students about trading strategies that have been shown to systematically beat the stock market over an extended period of time. All of the strategies use accounting information as a basis for fundamental analysis. The course will start with a discussion of efficient markets and basic valuation theory before moving on to present a variety of trading strategies whose success has been documented in the academic and practitioner literatures. Not taught in 2009-10.
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 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. Not taught in 2009-10.
ACCT 526. Executive Compensation and Corporate Governance
The Seminar will begin with a review of executive compensation and corporate governance structures used in U.S., U.K., Germany, Japan, etc. companies. It will then examine the choice of executive compensation contracts and corporate governance and the impact of these choices on executive behavior and firm performance. For example, the Seminar will consider the link between equity-based compensation and accounting manipulation, role of activist hedge funds, validity of governance rating services, market for corporate control and charter amendments, determinants of senior-executive terminations, etc. Not taught in 2009-10.
ACCT 531. Evaluating Financial Statement Information
This course aims to develop students' ability to read financial statements and understand the key issues affecting their ability to use the information in financial statements in decisions. The course will focus on several skills essential to this goal. These include (1) understanding the relevant accounting standards applicable to different companies and industries; (2) understanding the nature of the judgments that are required to apply accounting standards; (3) understanding the incentives of management, analysts and auditors to provide information to investors; (4) understanding the warnings signs of earnings that are of low quality and (5) increasing literacy in reading 10-K's and 10-Q's. Not taught in 2009-10.
ACCT 532. Financial Reporting and Control Issues in Mergers and Acquisitions
This course will focus on a variety of financial issues related to mergers and acquisitions. In particular, we will cover some of the financial statement implications of corporate control changes (e.g., consolidations, in-process-R&D, etc.), the effects of income taxes (e.g., taxable and non-taxable mergers), and other financial considerations. We will also examine some of the corporate governance issues associated with firms' decisions to acquire or be acquired, with particular emphasis on managerial incentives. In covering these issues, we would discuss not only specific M&A transactions (e.g., the merger of AOL and Time Warner, Oracle's acquisition of PeopleSoft) but also review some of the academic accounting and finance literature to gain a more general perspective for some of the key takeaways. Class time would comprise some mini lectures to introduce some of the technical issues, case discussions, and perhaps a couple of guest speakers who could offer additional perspectives on the subject matter. Not taught in 2009-10.
ACCT 552. Trading Strategies and Fundamental Analysis
This seminar teaches students about trading strategies that have been shown to systematically beat the stock market over an extended period of time. All the strategies use accounting information as a basis for fundamental analysis. The course will start with a discussion of efficient markets and basic valuation theory before moving on to present a variety of trading strategies whose success has been documented in the academic and practitioner literatures.
ACCT 554. Analysis and Valuation for Event-Driven Investing
This course is designed to develop students' ability to interpret and use financial accounting information in credit and equity valuation contexts. The course will focus on valuing the securities of companies undergoing significant changes as a result of litigation, restructuring, regulatory changes, mergers, spin-offs or significant industry shifts. Throughout the course, students will apply financial statement analysis and accounting based valuation models to assess the effects of these events on the various parts of a company's capital structure. The course will be of value to those students who anticipate making investment decisions using financial statement information. Not taught in 2009-10.