The University of Southampton
Courses

MANG6196 Accounting – Managing and Measuring Performance

Module Overview

Accounting based reporting systems can provide powerful inputs into corporate decision making processes. The overall aim of this module is to provide an understanding of the processes and assumptions underlying the generation of accounting data and an appreciation of the techniques available to utilise the outputs of an accounting system. These issues will be examined in the context of internal and external decision makers.

Aims and Objectives

Module Aims

• To provide an understanding of published financial statements and how they can be analysed, in order to draw inferences about the financial performance and viability of an organisation. • To provide an appreciation of costing and budgeting techniques in the context of both tactical and capital expenditure decisions and their role in organisational control systems. • To provide an appreciation of how accounting based data can be combined with other information in order to provide a broader picture of a corporate performance.

Learning Outcomes

Knowledge and Understanding

Having successfully completed this module, you will be able to demonstrate knowledge and understanding of:

  • the purpose, underlying assumptions and limitations of key corporate financial reporting documents including the Income statement, Balance sheet and Cash flow statement,
  • the processes involved in adapting financial reporting practices to a multinational setting,
  • the need and form of financial reporting regulation,
  • techniques used to externally evaluate companies on the basis of their financial reports,
  • the concept of management control
  • budgeting systems as a means of encouraging and evaluating managers’ actions,
  • combing financial and non-financial data in evaluating managerial and corporate performance, and
  • the process involved in evaluating and managing longer term investment projects.
Transferable and Generic Skills

Having successfully completed this module you will be able to:

  • summarise complex data using appropriate techniques,
  • prepare a report
  • work as a part of a team, and
  • use appropriate communication skills.
Subject Specific Intellectual and Research Skills

Having successfully completed this module you will be able to:

  • identify, analyse and interpret appropriate quantitative and qualitative data in a decision making context

Syllabus

• The form of financial reporting – balance sheet, income statement and cash flow statements • Issues in preparing financial reports – measurement and recognition with particular reference to knowledge based assets and other intangibles, economic substance over form, accounting for groups and changes in exchange rates • Regulation of financial reporting – financial reporting incentives, earnings management, economic substance over form, activities of IASB’s including IASB-FASB convergence project • Univariate and multivariate ratio techniques, relationship between accounting income and equity market value and equity valuation models • Management control, divisional performance evaluation and responsibility centres • Role of budgets and potential conflicts, process of budgeting, divisional performance in control and evaluation decisions. • Balanced scorecard - quantification of organisational goals, identification of perspectives and corresponding metrics • Investment appraisal methods including assessment of risk and sensitivity analysis, identification of incremental cash flows.

Learning and Teaching

Teaching and learning methods

Teaching methods include Lectures, formal and informal group work sessions, presentations and student led mini-debates. Learning activities include • group class exercises on interpretation of financial reports and costing analysis • group based evaluation of live company using accounting and non-accounting data sources, requiring preparation of report and presentation. • private study – directed reading and analytical activities Internationalisation One of the learning objectives refers to knowledge and understanding of the processes involved in adapting financial reporting practices to a multinational setting. First, international financial accounting and reporting standards presented are used by multinational corporations to measure and control performance of subsidiaries around the world. Secondly, the use of budgeting implies a degree of delegation of authority and in analysing the role of budgeting, specific issues of cross border delegation will be considered.

TypeHours
Independent Study70
Teaching30
Total study time100

Resources & Reading list

Paul Collier. Accounting for Managers: Interpreting Accounting Information for Decision-Making. 

Christopher Nobes. The Penguin Dictionary of Accounting. 

Merchant K. A. and Van der Stede W. A.. Management Control System – Performance Measurement, Evaluation and Incentives. 

Eddie McLaney and Peter Atrill. Financial Accounting for Decision Makers. 

Peter Atrill and Eddie McLaney. Management Accounting for Decision Makers. 

Assessment

Formative

Set exercises - non-exam

Summative

MethodPercentage contribution
Examination  (2 hours) 70%
Group project  (3500 words) 30%

Repeat

MethodPercentage contribution
Examination  (2 hours) 70%
Individual written report  (3000 words) 30%

Referral

MethodPercentage contribution
Examination  (2 hours) 70%
Individual report  (3000 words) 30%
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