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A437 Advanced Management Accounting A563 Consulting and Management Accounting Professor: Terry Campbell, PhD, CPA.CITP, CMA terrcamp@indiana.edu

A437 Advanced Management Accounting A563 Consulting and Management Accounting

Professor:

Terry Campbell, PhD, CPA.CITP, CMA terrcamp@indiana.edu

Meetings:

As Scheduled

Office Hours:

Office: BU 428A announced in class and ‘virtually’ anytime

Course Description:

For A437: Advanced Management Accounting on the Department web site:

Objective of course is to provide students with advanced managerial accounting knowledge and skills. Emphasis is on strategic decision- making and management control systems. Students will provide case analyses and presentations.

For A563: Advanced Managerial Accounting on the Department web site:

This course focuses on the intersection of consulting (both internal and external) and managerial accounting. The class is based mostly on business cases with the student advising the firm on certain strategic decisions. Topics include strategic cost analysis, target costing, activity-based management, cost-of-quality analysis, nonfinancial performance measurement, and management control systems.

Course Objectives:

Assumed Student Objectives:

To support 1) the vision of the students seeking professional accounting careers, 2) the vision of the Department of Accounting of the Kelley School of Business, and 3) the vision of the contributing faculty member

Entering the accounting profession, one should or may assume at least three student objectives:

  • 1. Gaining a common body of knowledge on the topics of concern for entry-level positions and forming a base for professional certification;

  • 2. Building a personal learning process for the future as a scanning and directional capability; and

  • 3. Creating a personal network for enhancing knowledge

transfer as well as professional relationships with colleagues. I shall assume these are the major drivers for YOU until other objectives are clarified to me.

Course Overview (Reality Check)

Our overall reality elements are to convert from buzzwords to behaviors in three areas: 1) critical thinking and communications, 2) joint discovery of past, present, and future roles of management accounting in technologically intensive and non-technologically intensive environments, and 3) experience a high intensity knowledge/learning professional environment where our learning is web-distributed. We are web-centric and/or eccentric?!

Approach and

My primary orientation is to LEARN. I do not believe in only

Philosophy:

“WHAT’S NEW?” as we need to know “WHAT’S BEST?” Therefore, our mutual concern is to determine what 1) is historically valid, 2) has current relevance, and 3) will be an identifiable/sustainable trend.

We are concerned with the 4 M’s:

Mechanical – we need to do calculations Managerial – we need to see managerial uses / abuses Meaning – we need to grasp the more subtle implications Motivation – we need to know how to ‘move’ others to actions As they apply to MEASUREMENT

Professionalism:

Books: Required

My assumption is that we seek EXCELLENCE; thus, each of us brings a certain ambition to succeed into the learning environment. We assume that the roles that we will play revolve around the idea of a client/customer. Thus, we will take on many roles during the sessions but the primary thrust will be the fact that we have a client or customer for our product, ideas, service, etc.

Edward Blocher, UNIV OF NC-CHAPEL HILL David Stout, YOUNGSTOWN STATE UNIVERSITY Gary Cokins, SAS/Worldwide Strategy

Hardcover, 992 pages ©2010, ISBN-13 9780073526942

Financial Modeling with Crystal Ball and Excel, + Website, 2nd Edition [JC]

John Charnes ISBN: 978-1-1181-7544-6 Paperback 314 pages June 2012

A437/A563 Course Packet – collection of cases, whitepapers, and articles

Books: Possible

1.

Various Cost/Management Accounting books from prior classes

  • 2. Other materials contributed from any and all sources

Software:

Microsoft Office, Crystal Ball, and others as we can jointly locate them

Examination

We use many options for homework, quizzes, and examinations.

Cases and

Substantial effort will be expected in the form of cases in the

Presentations:

sessions and a final paper.

Sessions (3 times): The assignments require consolidation of learning points, additional materials, and executive summaries of selected items suitable for distribution to other interested professionals. Grading guidelines will be issued.

Each final paper/project (Self-selected or assigned topic) CRYSTAL BALL MODEL report that includes guiding an intelligent and interested person through the SITUATION in the industry, company, financial statements, articles, and news that should be known by each person to get to the analysis, get through the analysis, and to post on the web site a mini-report as an audit trail for interested generations to come. Ideally, this could be

converted into a co-authored CRYSTAL BALL MODEL

case/article for submission to a professional journal. Physically, these are 1) one page summary of the model/analysis, 2) the model/analysis itself [15-25 pages, 1” margins, double-spaced, Arial, 11pt, with a minimum of 10 references from 5 ‘reliable’ sources properly referenced including abstracts and live links to the sources;] and 3) 6 PPT slides to summarize the model/analysis reports using the ‘messages/ approach provided in Effective Business Presentations.

Participation Daily

SEE RUBRIC(s)

Each person will make an attempt to contribute both quantity and quality to the class discussion daily. Points will be deducted for unprofessional behavior, unexcused absences, and other conduct not becoming a professional. First offense is 1 point, second is 5 points, third is 25, fourth is 125, and fifth is 625 points deducted; as we have only 1,000 points, this is a signal of the zero tolerance policy.

Grading:

EXAMS (Individual)

30%

I use the 95% for A

EXCEL Monte Carlo simulations

scale as noted on

built to quality standards

10%

Oncourse

Participation Daily

10%

Three Session Presentations

30%

Final presentation

10%

Rigorous Self-Assessment

10%

Review Guidelines for Contributing

TOTAL

100% = 1000 points

We shall assume there are at least five categories of listeners / readers; they will range from the fully committed “Bachelor’s/Master’s” Technically sophisticated professional (1) to the “Bachelor’s/Master’s” Generalist (5). Thus, when we contribute items, the scale for communicating the knowledge approach is:

1 2 3 4 5 Few can Some can Many can Most can know or know
1
2
3 4
5
Few can
Some can
Many can
Most can
know or
know or
know or
know or
need to
need to
need to
need to
know
know
know
know
Everyone
can know
or needs to
know

Let us imagine and hope that we can do better than the Dilbert cartoon!

I have placed the daily schedule on the following pages with the label tentative. The implication is that we can adjust as needed depending on a variety of factors.

One thing you will see and hear is that this is the S.A.M.E. course! Just to clarify the definition and the philosophy, I will argue that we should be:

Skeptical (professional skepticism, a skill-set for accountants and auditors)

About (in reference to) {actually, I put accounting here at one time!}

Most (almost all) {I had management here at one time!}

Everything (actually everyone!) {I had ethics at one time!}

Thus, I conclude that the S.A.M.E. course is valuable to us as learners and professionals.

One thing you will see and hear is that this is the S.A.M.E. course! Just to
One thing you will see and hear is that this is the S.A.M.E. course! Just to
One thing you will see and hear is that this is the S.A.M.E. course! Just to

The following paragraphs contain the undergraduate program learning goals, the undergraduate accounting program goals, and the specific learning objectives of the course.

Undergraduate Program Learning Goals

Learning Goal 1: An Integrative Point of View

Graduates of the Kelley School of Business Undergraduate Program will be able to evaluate and make

business decisions from an integrative point of view, one that reflects an understanding of mutually interdependent relationships among competitive and environmental conditions, organizational resources, and the major functional areas of a business enterprise.

Learning Goal 2: Ethical Reasoning

Graduates of the Kelley School of Business Undergraduate Program will be able to recognize ethical

issues, demonstrate familiarity with alternative frameworks for ethical reasoning, and discern tradeoffs and implications of employing different ethical frames of reference when making business decisions.

Learning Goals 3: Critical Thinking & Decision Making

Graduates of the Kelley School of Business Undergraduate Program will be able to use a variety of

research methodologies to identify and critically evaluate implications of business decisions for organizational stakeholders (e.g., customers, colleagues, employees, suppliers, foreign governments, communities, cultures, regulatory agencies) and the natural environment.

Learning Goal 4: Communication

Graduates of the Kelley School of Business Undergraduate Program will be able to communicate effectively in a wide variety of business settings (e.g., live, virtual, synchronous and asynchronous), employing multiple mediums of communications (e.g., written, oral and visual).

Learning Goal 5: Quantitative Analysis and Modeling

Graduates of the Kelley School of Business Undergraduate Program will be able systematically apply

tools of quantitative analysis and modeling to make recommendations and business decisions.

Learning Goals 6: Team Membership & Leadership

Graduates of the Kelley School of Business Undergraduate Program will be able to collaborate

productively with others, functioning effectively as both members and leaders of teams.

Learning Goal 7: Respect, Inclusiveness & Valuing People

Graduates of the Kelley School of Business Undergraduate Program will be able to create and sustain

personal and work environments that are respectful and inclusive, valuing the contributions of all persons.

Learning Goal 8: Personal and Professional Development

Graduates of the Kelley School of Business Undergraduate Program will be prepared to become the “authors” of their own futures, make informed and deliberate choices about personal and professional development, assume responsibility for their decisions, take pride in excellence, contribute to community, and demonstrate college-level mastery of the skills needed for pursuing and managing a career as a business professional.

Learning Goal 9: Global Awareness

Graduates of the Kelley School of Business Undergraduate Program will be conversant with major

economic, social, political, and technological trends and conditions influencing foreign investment and development of the global economy and demonstrate an understanding of the cultural, interpersonal and analytical competencies required for engaging in global business activities.

Learning Goal 10: Innovation and Creativity

Graduates of the Kelley School of Business Undergraduate Program will know how to respond to the need for innovation or creativity by engaging in ongoing learning, broadening their points of view, exploring cross-contextual links, and consulting with others.

Keep in mind that we are interested in critical thinking and communications regarding management/cost accounting

Undergraduate Accounting Program Learning Goals

Students who earn the Bachelor of Science (BS) in business degree will be able to

. .

.

  • 1. demonstrate an in-depth knowledge and competence of the major areas of accounting [maps to Goal 5 in the Nov. 2007 AOL document by J. Stern]

. . .

financial accounting

taxation

managerial accounting

auditing

  • 2. use the methods and skills specific to the discipline of accounting to identify issues, discern the cogency of information, perform critical analyses, make sound judgments, and develop well-

. . .

supported conclusions and recommendations related to typical Goal 4 in the Nov. 2007 AOL document by J. Stern]

business situations. [maps to

communicate financial information and accounting concepts clearly to non-specialists in

  • 3. . . . written, oral and visual formats. [maps to Goals 1 & 2 in the Nov. 2007 AOL document by J. Stern]

employ the quantitative and technological tools and skills specific to accounting to support

  • 4. . . . effective business decision-making. [maps to Goal 3 in the Nov. 2007 AOL document by J. Stern]

identify key ethical issues pertaining to accounting in the business context, think

  • 5. . . . systematically and critically about those issues, recognize and create organizations that are ethical. [maps to Goal 5 in the Nov. 2007 AOL document by J. Stern]

3/2 MBA in Accounting Program Learning Goals

Goal 1: Basic Principles of Accounting

Students who earn the 3/2 MBA degree will be able to demonstrate a thorough command of the basic principles and operations of accounting.

Goal 2: Internal Structures and Operations

Students who earn the 3/2 MBA degree will be able to demonstrate a thorough understanding of the internal structures and operations of businesses ranging in size from small businesses to multi-national corporations.

Goal 3: External Environments

Students who earn the 3/2 MBA degree will be able to demonstrate a thorough understanding of the relationship between a business and relevant external environments (e.g., governmental, legal, competitive and other environments.)

Goal 4: Integration of Tools and Techniques of Business

Students who earn the 3/2 MBA degree will be able to integrate and apply the tools and techniques of business drawing on a broad-based knowledge of the major functional areas, as well as specific technical knowledge of accounting, to analyze and recommend solutions to complex business problems.

Goal 5: Legal and Ethical Considerations

Students who earn the 3/2 MBA degree will be able to identify, interpret and apply legal and ethical principles as they affect business decisions, strategies and outcomes in general and specifically as they relate to accounting.

Goal 6: Professional Skills

Students who earn the 3/2 MBA degree will be able to use appropriate processes to identify, select, and demonstrate effective management skills and attributes including but not limited to 1) oral and written communication; 2) leadership skills; 3) emotional intelligence; 4) teamwork and collaboration; 5) reflective self-assessment; and 6) inclusivity.

Masters in Accounting Program Learning Goals

Goal 1: Basic Principles of Accounting

Students who earn the MS in Accounting degree will be able to demonstrate a thorough command of the basic principles and operations of accounting.

Goal 2: Integration

Students who earn the MS in Accounting degree will be able to integrate technical accounting knowledge with other functional areas of business to analyze and recommend solutions to business problems.

Goal 3: Legal and Ethical Considerations

Students who earn the MS in Accounting degree will be able to identify, interpret and apply legal and ethical principles as they relate to accounting.

Goal 4: Communication

Students who earn the MS in Accounting degree will be able to communicate effectively.

Goal 5: Team work

Students who earn the MS in Accounting degree will be able to work effectively in teams and organizations.

Goal 6: Professional Skills

Students who earn the MS in Accounting degree will be able to identify and exemplify attributes of career success.

Keep in mind that we are interested in critical thinking and communications regarding management/cost accounting

Given our interest in critical thinking and communications, we move to more specific learning outcomes. Please note that we are interested in quantitative and qualitative aspects so number crunching by itself is insufficient; ‘soft’ skills by themselves are insufficient; and only a properly balanced mixture brings us to a professional level.

Learning Outcomes:

LO1: Students should be able to critically assess the integration of strategic elements and management control systems (UAP Goal 2, 3/2 Goal 4, and MSA Goal 2)

  • a. Strategy choices

  • b. Process choices

  • c. Decision choices

  • d. Reporting choices

  • e. Incentive choices

LO2: Students should be able to present the analysis in a professional manner to financial and non-financial audiences. (UAP Goal 3, 3/2 Goal 4, and MSA Goal 6)

  • a. Problem identification

  • b. Alternative generation

  • c. Decision representation

  • d. Written reports

  • e. Oral reports

LO3: Students should be able to apply the necessary quantitative and qualitative techniques central to management accounting. (UAP Goals 4 and 5, 3/2 Goals 4 and 5, and MSA Goals 1 and 3)

  • a. Regression analysis

  • b. Pivot tables

  • c. Monte Carlo simulation / sensitivity analysis

  • d. Balanced Scorecard (multi-dimensional performance management systems)

  • e. Non-Financial Reporting (Sustainability, ESG [Environment, Societal, and Governance], and other qualitative techniques)

My intention is to build an assignment set that covers these learning outcomes. Some degree of flexibility is required by all of us. For example, one may be more quantitatively skilled / interested, one may be more qualitatively skilled / interested, and one may have no preference. To the extent possible, I intend to leverage your skills AND to allow personal customization in the deliverables.

Date

Cases/readings

Responsible

Assignments

Monte Carlo simulation Tutorials completed

ALL

Charnes book has download instructions for Crystal Ball

M 1/7

Introduction to course using Conceptual Overview of Judgment Deficit,

Academically Adrift, Subaru Indiana, MAQ article on Monte Carlo simulation and the S.A.M.E. course philosophy

From the Management Accounting Quarterly Winter 2011, we find

 
 

W 1/9

 

Dialogue, Debate, Discussion, and Demonstration on the Design, Development, and Deliverables

BSC Chapters 1 and 2 reviewed briefly

 

Building on the ideas of others: An examination of the idea combination process

 
Gone
Gone
Goal
Goal

{Think carefully about the issue of ‘overprescribing’ anything!}

LEGO Enterprise Risk Management

 

Audit Committee New Agenda http://ehis.ebscohost.com/ehost/detail?

 

ERM at United HealthCare http://web.ebscohost.com/bsi/detail?

 
 
 
 

Chapter 1: Cost Management Strategy and Overview Problems 1-28 and 1-38

 
 

IMA Ethics

Chapter 2: Implementing Strategy: The Balanced Scorecard and the Value Chain Problems 2-55 and 2-57

M

Organization of balance of effort! With examples of

ALL

Think of

1/14

models/analysis reports.

model/case/topic

CHARNES book – skim chapters

to own

Chapter 5 Activity-Based Costing in Management Exercises and problems 5-40

 

Chapter 8 Cost Estimation:

 

Exercises and problems 8-51

W

SPEAKER on CONSULTING for VALUE CREATION

ALL

Mutual

1/16

Crystal Ball, MCS, and EXCEL elements confirmed

Commitment for

Deliverables

W

Consolidation of learning

selected items suitable for

1/23

points, additional materials,

Time-driven ABC using regression Using Regression Analysis to Estimate Time Equations, F. Asis Martinez-Jerez, Ariel Andres Blumenkranc 111001-PDF-ENG

and executive summaries of

distribution to other interested professionals

Using Regression Analysis to Estimate Time Equations, Spreadsheet Supplement F. Asis Martinez-Jerez 111702-XLS-ENG

Activity based costing has been featured for some decades; where are we now and where do we expect to go.

Chapter 18 Management Control and Strategic Performance Management Problems 18-48

 

M

Henson case to be delivered

Consolidation of learning

1/28

Balanced Scorecard metrics lead to bonus calculations or do they?

points, additional materials, and executive summaries of selected items suitable for

How can we get metrics that we can trust?

distribution to other interested professionals

Referring back to judgment deficit article plus discussion: What can we say about the use of regression equations in ABC? In cost accounting? In control systems? In Bonus calculations?

W

EXAMINATION 1

All

1/30

M 2/4

Review Examination 1

 

W 2/6

Air France Internet Marketing: Optimizing Google, Yahoo!, MSN, and Kayak Sponsored Search Mark Jeffery, Lisa Egli, Andy Gieraltowski, Jessica Lambert, Jason Miller, Liz Neely, Rakesh Sharma KEL319-PDF-ENG Air France Internet Marketing: Optimizing Google, Yahoo!, MSN, and Kayak Sponsored Search Exhibit Spreadsheet, Spreadsheet Supplement Mark Jeffery, Lisa Egli, Andy Gieraltowski, Jessica Lambert, Jason Miller, Liz Neely, Rakesh Sharma KEL321-XLS-ENG

Chapter 9 Cost-Volume-Profit Analysis Exercises and problems 9-58

 

Chapter 10 Strategy and the Master Budget Exercises and problems 10-72

 

M

Amanco: Developing the Sustainability Scorecard

 

2/11

107038-PDF-ENG

Review JC all

ACCOUNTING for SUSTAINABILITY PERFORMANCE.

Integrating Sustainability Measures into Strategic Performance Measurement Systems: An Empirical Study

Simulation of the Weighting of Balanced Scorecard

Metrics Including Sustainability and Time-Driven ABC Based on the Product Life Cycle

W

Charnes Selected Models – Chapter 7

 

2/13

And Chapter 8

Valley Forge or similar case

Chapter 11 Decision Making with Relevant Costs and a Strategic Emphasis Exercises and problems 11-37

Chapter 12 Capital Budgeting Exercises and problems 12-56 and 12-74

 

Selected Gleim Questions

Risk Analysis in Capital Investment (HBR Classic) 1979, Hertz

M

Haier: Management Control on a Tactical Level

Review JC all

2/18

HKU739

Consolidation of learning points, additional materials,

and executive summaries of

selected items suitable for

8

distribution to other

interested professionals

8

W

Borealis 102048-PDF-ENG

Review JC all

2/20

Who Needs Budgets? Hope, Jeremy; Fraser, Robin. Harvard Business Review, Feb2003, Vol. 81 Issue 2, p108-115, 8p

M

EXAMINATION 2

2/25

W

REVIEW EXAMINATION 2

2/27

 

M 3/4

Smithson from P4P Monte Carlo simulation – review – MAQ article Using Monte Carlo Simulation for a Capital Budgeting Project

Review BSC Ch. 11 and 12

W 3/6

Speaker on Monte Carlo simulation in Industry

Review JC all

Airbus A3XX: Developing the World's Largest Commercial Jet (A) 201028-PDF-ENG

Airbus A3XX: Developing the World's Largest Commercial Jet (A), Spreadsheet Supplement

XLS038-XLS-ENG

Chapter 19 Strategic Investment Units and Transfer Pricing Exercises and problems 19-46

 

Accounting Choices and EVA (Business Horizons)

Chapter 20 Management Compensation, Business Analysis, and Business Valuation Exercises and problems 20-40

BSR 2001

M

Ceres Gardening Company: Funding Growth in

Review BSC Ch. 19 and 20

3/18

Organic Products 4017-PDF-ENG

Review JC all

Ceres Gardening Company: Funding Growth in Organic Products, Spreadsheet for Students 4019- XLS-ENG

W

Hansson Private Label, Inc.: Evaluating an

Review BSC all

3/20

Investment in Expansion 4021-PDF-ENG

Review JC all

Hansson Private Label, Inc.: Evaluating an Investment in Expansion, Student Spreadsheet

4025-XLS-ENG

EVA Momentum: the One Ratio that tells the whole story http://onlinelibrary.wiley.com/doi/10.1111/j.1745-

M

Vyaderm Pharmaceuticals 101019-PDF-ENG

Review BSC all

3/25

Vyaderm Pharmaceuticals, Spreadsheet

Supplement XLS005-XLS-ENG

W

Scor-eStore.com UV0361-PDF-ENG

Review BSC all

3/27

Scor-eStore.com, Spreadsheet Supplement

UV0375-XLS-ENG

   

Chapter 14 The Flexible Budget and Standard Costing: Direct Materials and Direct Labor Exercises and Problems 14-64 and 14-73

Chapter 15 The Flexible Budget: Factory Overhead Exercises and problems 15-57

 

Chapter 16 The Flexible Budget: Further Analysis of Productivity and Sales Exercises and problems 16-56

M

4/1

Batson International, S.A. (A) 111023-PDF-ENG

Review BSC and JC all

 

W 4/3

EXAMINATION 3

M

4/8

REVIEW EXAMINATION 3

 

W

Kinkead from P4P

Review BSC ch. 14, 15, and

4/10

16 and JC

 

M

Presentations

All

4/15

 

W

Presentations

All

4/17

 

M

Presentations

4/22

 

W

Final models/analyses/reports due, Final Self-assessment, and review of lessons

4/24

to be learned

TBD

FINAL EXAMINATION

Honor Code

I expect you to comply fully with the Kelley School of Business Honor Code. This includes avoiding any plagiarism in the preparation of written assignments. For plagiarism on team reports, I hold each member of the team fully responsible. Any instances of academic misconduct will result in a grade of F. I am furthermore required to submit a report of any and all incidences of academic misconduct, whether sanctioned or not, to the Dean of Students.

Portions of this course may be subject to electronic proctoring. Video cameras may be used to monitor the room during student assessment activities, including but not limited to, exams, tests, and quizzes. Video recordings may be used to investigate or support disciplinary action. All access to and use of video equipment and recordings will follow applicable IU policies.

Note to students planning to take the CPA exam after graduation:

Indiana University students who wish to become licensed CPA’s will need to take the Uniform CPA Examination after graduation. Although the CPA exam is a uniform nationally administered exam, the educational requirements needed to sit for the exam vary from state to state. Most states, including Indiana, require 150 hours of college credit to sit for the exam. In addition, each state requires a certain number of accounting and other business credits. Indiana University’s undergraduate accounting degree requirements satisfies the accounting and other business credit requirements mandated by the Indiana Professional Licensing Agency. Since these requirements are subject to change, students are encouraged to research these requirements along with the requirements mandated by other states. Several states require additional accounting hours and some states require specific courses that are not included in IUB’s required curriculum. It is each student’s responsibility to research these exam requirements. Further information is available at www.nasba.org, www.cpa-exam.org, and by telephone at 1-800-cpa-exam.