University of Southern Maine

Financial Reporting I

This course is designed to help students develop an in-depth understanding of financial accounting and reporting. For each topic covered in the course, we first describe the underlying business transactions and go through the technical details of Generally Accepted Accounting Principles (GAAP). After doing this, we then see how these transactions are reported in the financial statements. Aside from learning the accounting rules, we will spend time discussing why management, analysts and investors care about accounting. We will spend time talking about management’s incentives and how they can influence the decisions and estimates that management makes when reporting the firm’s financial results.

There are two key goals in this course. The first goal is to learn how the numbers reported in the financial statements are produced. This requires that you learn the details of accounting. The second goal is to learn how to interpret the numbers being reported in the financial statements. This requires that you be able to “back out” the journal entries that management made to report the numbers in financial statements. In doing this, you are better equipped to address whether there are distortions in the financial statements, and if so, how to remove those distortions.

Introductory accounting can be thought of as teaching you the basic accounting for each of the items on the balance sheet and income statement. This course can be thought of as expanding your knowledge so that you can understand the footnotes to the financial statements. It also focuses on actual financial statements and helps you learn the latitude that management has in producing the numbers reported in the financial statements. This course, Financial Reporting I (ACC 301), focuses on the left-hand side of the balance sheet (i.e., assets) while Financial Reporting II (ACC 302) focuses on the right-hand side (i.e., liabilities and owners’ equity).

Fall 2006: University of Southern Maine - ACC 301 (syllabus)

Fundamentals of Financial Accounting

As the language of business, financial accounting focuses on how firms report about themselves financially to outsiders (e.g., stockholders, potential investors, creditors, regulatory agencies, etc.). You should find the course important and useful throughout your career and in many other business courses. This course covers some of the most important material in a business curriculum: the nature of the financial reporting process and the basic accounting principles, conventions, and concepts underlying the current reporting environment of GAAP basis financial statements. No prior knowledge of accounting is assumed.

The course begins with an introduction to accounting terminology and the three basic financial statements required of most businesses. The initial pace is fast, and students are strongly advised to keep up with the assignments. There is a "building block" effect for materials covered, and failure to keep up with the assignments will adversely affect your performance. Most students have found that the "crisis approach" to studying is not appropriate for this course.

We will adopt a user perspective, emphasizing the analysis and interpretation of financial statements by working with actual financial statements. However, to do this effectively requires some knowledge of accounting – debits and credits, journal entries, etc., so you will have to know these aspects of the course material. Throughout the world, financial statements are prepared according to a set of rules known as generally accepted accounting procedures (GAAP). Each country has its own GAAP. Our discussion will focus on financial statements prepared under US GAAP but we will highlight important differences across countries as we discuss the various financial statement elements.

Winter 2007: Copenhagen Business School (syllabus)
Fall 2006 : University of Southern Maine - MBA 502 (syllabus)

Financial Statement Analysis & Valuation

This course (i) provides you with a framework for business analysis and valuation using financial statement data; and (ii) gives you practical advice when using the framework to value a firm. The course assumes that you have a good working knowledge of accounting, finance, economics and business strategy. We focus on integrating key concepts from each of these areas and applying them to real world problems. The course places a heavy emphasis on illustrating the latest techniques and information sources used by Wall Street professionals.

The course is case oriented. Students are responsible for preparing all cases in advance of the class sessions, including familiarizing themselves with the relevant accounting issues. ACC 301 “Financial Reporting I” and FIN 320 “Basic Financial Management” (or their equivalents) are prerequisites or, as a last resort, one of them can be taken concurrently with this course. At times the course will draw on your detailed understanding of financial statement data but more importantly the course assumes that you understand the nuances of the accounting inputs we will use. Just as it would be possible but dangerous to learn surgery without learning basic medicine, so too would it be possible but dangerous to learn valuation techniques without fully understanding the basic financial statement inputs to the model.

Spring 2007: University of Southern Maine - ACC 632 (syllabus)

Internships

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