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2014/2015  BA-BHAAI1009U  Principles of financial accounting

English Title
Principles of financial accounting

Course information

Language English
Course ECTS 7.5 ECTS
Type Elective
Level Bachelor
Duration Summer
Course period Summer
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for BSc in Economics and Business Administration
Course coordinator
  • Course instructor - Dr. Brad Potter, University of Melbourne
    Patricia Plackett - MPP
Main academic disciplines
  • Financial and management accounting
Last updated on 12-02-2014
Learning objectives
A key theme underpinning the subject is that considerable judgement and estimation are required in preparing financial reports and that such reports are prepared in complex organisational and regulatory settings. Nonetheless, accounting information is widely referred to as the “language of business” because it is a primary way in which organisations communicate with stakeholders (e.g. shareholders and lenders) and an important source of information used by various decision makers in trying to understand the performance and position of the business. Throughout the course, students will also explore the role of accounting in communicating information about the sustainability of the organisation – particularly, information relating to natural resources such as greenhouse gas emissions and water.

At the end of the course the student should be able to:
  • Understand the complex environment in which financial reports are prepared and resulting the incentives which shape the information reported by companies
  • Interpret and apply the conventions and rules underlying the preparation of major accounting reports;
  • Analyse financial and managerial decision making and the different accounting information that supports these decisions.
  • Utilise problem-solving skills in a range of organisational settings
  • Think critically about financial and managerial accounting theory, tools and techniques
  • Evaluate, analyse and interpret relevant accounting information
  • Apply financial statement analysis theory and practice
  • Articulate responses to financial accounting problems, either orally or in written form
Course prerequisites
Prerequisites for registering for the exam
Number of mandatory activities: 1
Compulsory assignments (assessed approved/not approved)
Mid-term assignment: The assignment is to be completed in groups. In this assignment, students will explore the incidence and consequences of earnings management by companies. This analysis includes a consideration of the objective of financial reports and the estimation and judgment inherent in the reporting process. These issues will be examined in the context of the incentives faced by those preparing the reports and will require the student groups to prepare a short report.
4 hours written exam:
Exam ECTS 7,5
Examination form Written sit-in exam
Individual or group exam Individual
Assignment type Written assignment
Duration 4 hours
Grading scale 7-step scale
Examiner(s) Internal examiner and second internal examiner
Exam period Summer Term
Aids allowed to bring to the exam Limited aids, see the list below and the exam plan/guidelines for further information:
  • Allowed calculators
  • Allowed dictionaries
Make-up exam/re-exam
Same examination form as the ordinary exam
If the number of registered candidates for the make-up examination/re-take examination warrants that it may most appropriately be held as an oral examination, the programme office will inform the students that the make-up examination/re-take examination will be held as an oral examination instead.
Course content and structure

This subject provides a broad introduction to the accounting process, accounting information systems and the language of accounting. It is designed to enable you to become an informed preparer and user of accounting information. Successfully completing this subject will also assist students to understand and use accounting information to enhance financial and managerial decision making.
Principles of Financial Accountingis a foundation subject for many students who will pursue more advanced studies in accounting across various programs, and a stand-alone program for those students who will specialise in other areas.
In addition to the Mandatory Mid-term Assignment involving short reports by student groups on the incidence and consequences of corporate earnings management, students will also prepare a Preliminary Assignment on an individual basis. In this assignment, students will explore the role of accounting approaches and techniques in communicating information about the sustainability of an organisation - including its consumption of natural resources. In doing so, students will consider recent debates about water accounting, carbon accounting and integrated reporting.to prepare themselves for class discussions.

Class Schedule

Class Topic  
Class 1 Organisations, conceptual frameworks and financial statements Chapter 1
Transaction analysis – capturing transactional information in the accounting system Chapter 2
Class 2 Accrual accounting and income Chapter 3
Class 3 Internal control and cash
Preliminary Assignment to be completed
Chapter 4
Class 4 Short-term investments and receivables Chapter 5
Inventory and cost of goods sold Chapter 6
Class 5 Property, plant, and equipment; intangibles
Mandatory Mid-term Assignment to be completed
Chapter 7
Class 6 Liabilities Chapter 8
Class 7 Shareholders’ equity Chapter 9
Class 8 Income statement and statement of changes in equity Chapter 11
Class 9 Cash flow statement Chapter 12
Class 10 Financial statement analysis Chapter 13
Class 11 Comprehensive review --
Teaching methods
Multiple teaching approaches are used in this course, including a combination of seminar delivery and in-class exercises including case studies. All sessions are interactive.
Further Information
Preliminary Assignment: To help students get maximum value from ISUP courses, instructors provide a reading or a small number of readings or video clips to be read or viewed before the start of classes with a related task scheduled for class 3 in order to 'jump-start' the learning process.
Expected literature

Harrison, Horngren, Thomas, and Suwardy, Financial Accounting with MyAccountingLab, 9th Global Edition, Pearson Education Canada 2012, 887 pages, ISBN 978-0-273-77792-2.  
Note that the online supplement “MyAccountingLab” is required for this course.
Various other resources will also be utilized, including newspaper clippings and research articles which focus on various issues including accounting for natural resources such as carbon and water. Examples of these resources are given below.
Chalmers, K., Godfrey, J., Potter, B. (2012), ‘Discipline-Informed Approaches to Water Accounting’, Australian Accounting Review, 62:275-285.
Potter, B., Soderstrom, N. (2013), ‘Exploring the Challenges of Broadening Accounting Reports: Insights from Research’, IN PRESS

Last updated on 12-02-2014