This course develops students’ understanding of the nature and purpose of accounting, and the environment within which accounting information is prepared and used. Practical and theoretical exercises are used to master the principles to determine when an accounting event is recognised, and the system of recording that is used. The course covers the ethical responsibility of preparers and auditors of financial statements, and how market-based economic systems rely on having financial reports that are ‘true and fair’. The forces that have led to increasing internationalisation of accounting regulation are examined. The use of accounting information for internal financial management is examined through a consideration of topics such as cost-volume-profit analysis, capital project evaluation, and alternative debt/equity financing strategies. Budgets are studied as a means for planning and controlling business activity.
Each topic is introduced by a critical review of key theoretical concepts that are then applied to practical settings.
K1 Identify the issues and consequences in determining the structure within which to operate a business or other organisation, and the agency relationship existing between the managers and owners of a company
K2 Comprehend basic ethical frameworks, and the practical importance of ethics and corporate governance in accounting and in business, and how accounting regulation is being increasingly internationalised
K3 Identify the fundamental principles applied in identifying, measuring and recording financial transactions, and the structure of the General Purpose Financial Reports
K4 Comprehend the wealth of information available in General Purpose Financial Reports and recognise the element of subjectivity involved in processing transactions upon which these reports are based
K5 Evaluate a range of investment analysis techniques, financing decisions, budgeting, and cost-volume-profit analysis