University of Technology SydneyHandbook 2008

22748 Financial Reporting and Analysis

Faculty of Business: Accounting
Credit points: 6 cp

Subject level: Postgraduate

Result Type: Grade and marks

Requisite(s): 22747 Accounting for Managerial Decisions OR 22784 Accounting: Concepts and Applications
These requisites may not apply to students in certain courses.
There are also course requisites for this subject. See access conditions.

Handbook description

This subject provides the skills and competencies to undertake accounting analysis. Accounting analysis is a tool used in performing business analysis using financial statements. In making accounting analyses, students distinguish between the information revealed by management on the firm's underlying business activities, the sources and effects of distortions of this information that can be induced into the accounting numbers and the errors that can arise in accounting estimates used in the accounting numbers. This is an intermediate level financial accounting subject.

Subject objectives/outcomes

On successful completion of this subject, students should be able to:

  1. understand the business environment and accounting environment of corporate financial accounting and reporting
  2. understand accounting analysis
  3. read and analyse financial statements comprising statements of financial position, statements of financial performance and cash flow statements
  4. evaluate the extent to which a corporation's financial accounting and reporting strategy captures the underlying business activities
  5. analyse financial statement information to identify sources and effects of estimation errors and distortions in financial statement information.

Contribution to graduate profile

This subject is concerned with external reporting by companies and the theoretical and practical issues relating to the formation of those reports. It is not primarily technique oriented, but emphasises the conceptual issues relating to the application of accounting techniques.

Teaching and learning strategies

Lectures will be employed to outline the ideas and concepts underlying each topic. Illustrations of the application of these ideas and concepts will be integrated into the lecture through exercises, discussion problems and cases assigned to each topic. Additional readings and handouts will be provided from time to time.

Students will have access to UTS Online where the main points of lectures will be available. Student discussion is also available within that forum.

Students will undertake syndicate projects and be involved in presentations to the student body and the subject coordinator.

Content

  • Overview of Business Analysis
  • Accounting Analysis
  • Accounting Analysis of Income and Reserves
  • Accounting Analysis of Equities and Liabilities
  • Accounting Analysis of Company Income Tax
  • Accounting Analysis of Assets
  • Accounting Analysis of Intangible Assets
  • Accounting Analysis of Leases and Employee Entitlements
  • Accounting Analysis of Natural Resource Activities
  • Accounting Analysis of Foreign Currency Fluctuations.

Assessment

In-class test (Individual)25%
This will assess students' understanding of the business environment and accounting environment of corporate financial reporting. The test will allow students to demonstrate that they have met objectives 1 and 2.
Accounting analysis case study (Group)25%
Students are allocated an Australian-listed company and are required to use the latest available financial statements and complete an analysis of the accounting issues pertinent to that company. Students are encouraged to work in syndicate groups (maximum of 5). Each group is to submit a report to the lecturer and present their findings to the class. The case study analysis will allow students to demonstrate that they have met objectives 3-5.
Final Examination (Individual)50%
The final exam will be a 3-hour closed book exam consisting of discussion, exercise and case problems. It will assess students' understanding in evaluating the extent to which a corporation's financial accounting and reporting strategy captures the underlying business activities. The final exam will allow students to demonstrate that they have met objectives 3-5.

Recommended text(s)

Whittred, G., Zimmer, I. and Taylor, S. (2000), Financial Accounting Incentive Effects and Economic Consequences, 5th Edition, Harcourt, Sydney.

Indicative references

Accounting Handbook (2003), Prentice Hall, Sydney.

Deegan, C. (2002), Australian Financial Accounting A Practical, Conceptual and Theoretical Analysis, 2nd Edition, Irwin/McGraw-Hill, Sydney.

Henderson, S. and Peirson, G. (2002), Issues in Financial Accounting, 10th edition, Prentice Hall, Sydney.

Palepu, K., Bernard, V. and Healy, P. (2000) Business Analysis and Valuation Using Financial Statements, South-Western College Publishing, Cincinnati.

Penman, S.H. (2001), Financial Statement Analysis and Security Valuation, McGraw-Hill, New York.

Stickney, C. (1999), Financial Statement Analysis: A Strategic Perspective, 2nd Edition, Dryden Press.