22784 Accounting: Concepts and Applications

Subject level: Postgraduate

Handbook description

The subject aims to expose students to the nature and use of accounting information, and less to the processes of accounting. The aim is to have students understand accounting information and to appreciate its uses from various decision-making perspectives. This subject provides a sound grounding in the application of accounting concepts and techniques and considers ethical and corporate governance issues associated with the provision of accounting reports.

The topics chosen are a mix of financial and management accounting. The financial accounting topics concern the basic financial statements, their analysis and the concepts and procedures that underpin their preparation. Management accounting concerns cost, cost behaviour, product costing, and information for planning and control.

Subject objectives/outcomes

On successful completion of this subject students with limited work experience should be able to:

1. Use accounting process and business technology, information and support systems to monitor issues, problems and opportunities affecting business.
2. Understand the purpose, content and format, of financial statements and the methods used by accountants to prepare these statements which are governed by regulatory requirements and relevant accounting standards governing disclosure requirements for these reports.
3. Understand the implications of financial reports and their role in the development of effective governance mechanisms.
4. Analyse and interpret financial statements so as to extract information about past operations and to develop expectations about future outcomes.
5. Explain the role of management accounting information in managerial decision-making and apply basic management accounting techniques.
6. Identify and explain accounting issues that arise in the workplace and their implications for business behaviour and resource allocation decisions.

Contribution to graduate profile

This subject provides students with the necessary skills to develop and use information products and utilise business support systems to monitor issues, problems and opportunities affecting business.

Familiarity with accounting processes, standards and conventions are essential prerequisites to sound management practice. Managers use accounting information in the analysis, planning and control of all aspects of business operations as information input to decision analysis and decision making. Thus the objectives of this subject contribute directly to the objectives of the MBA degree in that accounting information supports all areas of business activity be it ex-ante decision support and ex-post results reporting and analysis. The content of this subject provides a basis for subsequent business management subjects.

Teaching and learning strategies

The presentation is a combination of lecture and seminar. The sessions have three components:

1. Lecture - the ideas and concepts found in the topic assigned will be discussed and illustrated.
2. Problem demonstration - selected problems/cases from the text will be demonstrated by the lecturer.
3. Seminar - discussion of problems and cases as assigned in the syllabus. Lecturers will discuss the problems/cases on the understanding that students have prepared answers and brought these to class.
4. Case study review problems to make students aware of ethical and governance issues associated with financial reporting and the effect of these reports on the various stakeholders of the business.

The teaching strategies and learning materials have been developed for a culturally diverse student body. Specific teaching strategies will be employed in this subject to compensate for limited work experience. These include weekly feedback on learning, small group learning strategies and additional practical handout material. The approach to teaching will not assume that students possess significant work experience.

Content

• The Accounting Framework and Some Accounting Concepts
• Financial Statements – Statement of Financial Position (The Balance Sheet)
• Financial Statements – Statement of Financial Performance (The Profit and Loss Statement, Income Statement)
• Financial Statements - Statement of Cash Flows
• Introduction to Financial Ratios and Financial Statement Analysis
• Basic Cost Concepts and Cost Behavior
• Brief Introduction to Cost Accounting
• Activity Accounting – Another Way to Measure Costs
• Short-Run Alternative Choice Decisions
• Long-Run Decisions: Capital Budgeting
• Budgeting – Operating Budget, Cash Budget

Assessment

Indicative references

Atrill, P., McLaney, E., and Harvey, D., (2000) Accounting an Introduction. 3rd Edition, Pearson, Prentice Hall.

Anthony, R. N., Hawkins, D. N., and Merchant K. A., (1999). Accounting: Text and Cases (10th ed.). McGrawHill.

Horngren, C. T., Harrison Jr., W. T., Best, P. J., Fraser, D. J., and Izan, H. Y., (1999). Accounting. Prentice Hall