COURSE OUTLINE Accounting for Decision Making MBA Evening

Faculty: Moiz Ahmad Code: ACC 505 Session # 1 Term: Fall 2013 Class Nbr: 2362 Reading/Reference Material Chapter 2 Financial Analysis Tools and Techniques; A Guide for Managers. By Erich A. Helfer

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Introduction---Classroom attendance and disciplinary norms Course Over-view Accounting and Business Structure; Overview of business system, Corporate Objectives, Widening role of Accounting for Business Decision Making; Value Creation for Shareholders Financial Stewardship and Oversight; Financial Reporting, Disclosures and Transparency Responsibilities of BoD, CEOs and CFOs; principal managerial activities underlying the Value Creation Process; developing a Conceptual Frame-work. Need for and importance of the International Financial reporting Standards (IFRS) and International Accounting Standards (IAS); brief introduction to International Accounting Standards Board (IASB), FASB & ICAP. Convergence of GAAP to IAS and IFRS Financial Reporting with particular emphasis on: principles of going concern, accrual, materiality, measurement, substance over form. Provisions, contingent liabilities, extra-ordinary items, off-balance sheet items, nature of different reserves, post balance sheet date events, revenue measurement and recognition. Accounting for Foreign Operations. Foreign Currency, Consolidated Financial Statements, Transfer Pricing Decision, intra-company transfer pricing; different methods and practices for computing transfer price; dual transfer pricing; OECD guidelines for transfer pricing. Related Party Transactions Role of External Auditor and Auditors Report Corporate Compliance and Ethics; key issues in corporate compliance. Control Environment; Governance, Risk Management and Controls Internal Control and Internal Auditing - Importance of

From IFRS/IAS Annual reports Hand outs Chapter 2 Using Financial Accounting Information, The Alternate to Debit and Credit by Gary A. Porter and Curtis L. Norton Chapter 13 (Transfer pricing) Managerial Accounting. By Ronald W. Hilton OECD guidelines Companies Ordinance 1984 Case Studies

COSO Internal Control Integrated Framework

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Internal Control in organizations. Control techniques and the role of the Internal Auditor COSO Internal Control Integrated Framework Assessment of Business Performance An interpretive and Critical Perspective of Accounting and Decision Making Financial performance analysis from three perspectives; Managers; Owners; Lenders and creditors Financial Measure such as Return on Investment (ROI); relationship of factors influencing ROI Illustrated and limitations thereof. Other Alternative Financial Performance Measures using Residual Income (RI) and Economic Value Added (EVA) approaches; historical perspective and associated problems. Measuring Total Business Unit Performance using the Balanced Score-card approach highlighting the performance of critical value creation activities performed by skilled and motivated employees. Evaluating the Cash-generating- Ability and Financial Flexibility of a firm through interpretation of the Statement of Cash Flow (SCF); preparation of SCF and the requirements of IAS-7.

Chapter 4, 11 & 12 Financial Analysis Tools and Techniques; A Guide for Managers. By Erich A. Helfer Chapter 10 (Balanced Scorecard) Managerial Accounting. By Ronald W. Hilton Case Study

Chapter 3 & 7 Financial Analysis Tools and Techniques; A Guide for Managers. By Erich A. Helfer Chapter 16 Managerial Accounting. By Ronald W. Hilton Case Study

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Accounting for Investment Decisions/ Capital Budgeting Decisions: capital projects---importance and different evaluation methods; mutually exclusive projects with multiple roots; ranking of projects with different capital outlays and under capital rationing. Scenario and sensitivity analysis; effects of inflation and capital budgeting; projected cash flow estimates; tax consideration. Accounting for Operational Decisions; Cost Behavior Developing deeper conceptual understanding of the terms Cost, Expense and Asset; nature and characteristics of Costs; their classification and behavior; Cost Drivers and Activity Pools. Accounting for Operational Decisions Absorption costing and Variable Costing. Cost-VolumeProfit (CVP) Analysis: Contribution and safely margins; cost volume - profit analysis for evaluating the impact of changes in selling price, sales volume, sales mix (single and multiple products) and costs; operating leverage and its interpretation.

Chapter 2, 5,6 & 7 Managerial Accounting. By Ronald W. Hilton Chapter 8 and 15 Managerial Accounting. By Ronald W. Hilton.

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Accounting for Operational Decisions Tactical Decision Making; relevant and marginal costs and their application in accept or reject a special order; add or drop a product or service; out-sourcing of product and services; sell or process further decisions; product mix decision with constraint resources. Financial Control through Standard Costing Establishing standards for material, labor and manufacturing overhead costs; determining and analyzing the direct material and labor price, quantity / efficiency, mix and yield variances. Financial Control through Flexible Budgeting; determining and evaluating spending efficiency and idle capacity variances. Group Presentation on Internal Controls in a selected Organization

Chapter 14 Managerial Accounting. By Ronald W. Hilton.

Chapter 10 Managerial Accounting. By Ronald W. Hilton Case Study Chapter 11 Managerial Accounting. By Ronald W. Hilton

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Course Material: 1. Using Financial Accounting Information, The Alternate to Debit and Credit by Gary A. Porter and Curtis L. Norton Seventh edition 2. Managerial Accounting by Ronald W. Hilton - Sixth Edition 3. Financial Analysis Tools and Techniques; A Guide for Managers Edrich A. Helfert Tenth Edition 4. Handouts 5. Annual report Reference Material 1. COSO Framework 2. OECD Guidelines 3. International Financial Reporting Standards (IFRSs) including International Accounting Standards (IASs) and Interpretations 4. Companies Ordinance 1984 5. SECP website 6. ICAP website Additional Recommended Books: a. Managerial Accounting Second Edition by John G. Helmkamp b. Financial and Managerial Accounting by Jan. R Williams, Susan F. Haka, Mark S. Bettner Grading Plan: Quiz Class Participation & Assignment Class Presentation Mid Term Exam Final Exam Total

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