MBA 631: FINANCIAL & MANAGERIAL ACCOUNTING

Credit Hours: 2
Pre-requisite: None
Course Description
Accounting for Managers emphasizes the interpretation rather than the construction of accounting
information and encourages a critical, rather than unthinking acceptance of the underlying
assumptions behind accounting. It links theory with practical examples and case studies drawn from
real life business situations across a range of industries.
Course Objectives
By the end of this course, students will be able to:
✔ Familiarize students with the use of accounting information in decision making.
✔ Acquaint learners with the skills of financial reports analysis.
✔ Understand how to use accounting information in planning and control.
Course Contents
PART I: CONTEXT OF ACCOUNTING.
1.1. Introduction to Accounting: Accounting, accountability and the account.
1.2. A short history of accounting.
1.3. The role of management accounting

1.4. Recent developments in management accounting.

1.5. Accounting and its Relationship to Shareholder Value and Corporate Governance.
1.6. Capital and product markets.
1.7. Value-based management.
1.8. Shareholder value, strategy and accounting.
1.9. Company regulation and corporate governance
1.10. Recording Financial Transactions and the Principles of Accounting.
1.11. Business events, transactions and the accounting system.
1.12. The double entry: recording transactions.
1.13. Extracting financial information from the accounting system.
1.14. Basic principles of accounting.
1.15. Cost terms and concepts: the limitations of financial accounting.
1.16. Management Control, Management Accounting and its Rational-Economic
Assumptions.
1.17. Management control systems.
1.18. Management planning and control systems and management accounting.
1.19. Non-financial performance measurement
PART II: THE USE OF FINANCIAL REPORTS FOR DECISION-MAKING.
2.1. Constructing Financial Reports:
1. International Financial Reporting Standards (IFRSs) True and fair view.
2. Framework for the Preparation and Presentation of Financial Statements.
3. Reporting profitability: the Income Statement.
2.2. Reporting financial position:
1. The Balance Sheet.
2. Accruals accounting.
3. Depreciation.
2.3. Reporting cash flow: The Cash Flow Statement.
2.4. Interpreting Financial Reports and Alternative Perspectives:
2.4.1. Annual Reports.
2.4.2. Operating and Financial Review.
2.4.3. Ratio analysis.

2.4.4. Profitability.
2.4.5. Liquidity.
2.4.6. Gearing.
2.4.7. Activity/efficiency.
2.4.8. Working capital.
2.4.9. Managing receivables.
2.4.10. Managing inventory.
2.4.11. Managing payables.
2.4.12. Shareholder return.
2.4.13. Interpreting financial information using ratios
2.5. Accounting for Inventory:
2.5.1.Introduction to Inventory.
2.5.2 Methods of costing inventory in manufacturing.
2.5.3 Job costing illustration.
2.5.4 Process costing illustration.
2.5.5 Long term contract costing.
2.5.6 Management accounting statements.
PART III: USING ACCOUNTING INFORMATION FOR DECISION-MAKING,
PLANNING AND CONTROL.
3.1. Accounting and Information Systems.
3.2. Introduction to accounting and information systems.
3.3 Internal controls for information systems
3.4. Cost behavior.
3.4.1. Cost-volume-profit analysis.
3.4.2. Alternative approaches to pricing.
3.4.3. Cost-plus pricing.
3.4.4. Target rate of return pricing.
3.4.5. Optimum selling price.
3.4.6. Special pricing decisions.
3.4.7. Transfer pricing.
3.4.8. Segmental profitability.

3.4.9. Cost classification.

3.4.10. Calculating product/service costs.
3.5. Shifts in management accounting thinking.
3.6. Alternative methods of overhead allocation.
3.7. Activity-based costing.
3.8. Behavioral implications of management accounting.
3.9. Strategic Investment Decisions.
3.9.1. Investment appraisal.
3.9.2. Accounting rate of return.
3.9.3. Payback. Discounted cash flow.
3.9.4. Comparison of techniques.
3.11. Variance analysis.
1. Cost variances.
2. Materials variance.
3. Labor variance.
4. Overhead variances.
5. Reconciling the variances.
6. Criticism of variance analysis.

MODE OF TEACHING-LEARNING PROCESES

A combination of the following major methods of delivery will be used for each course of the MBA
Program:
● E-learning
● Video/Audio
● Virtual-Lectures
● Individual & or group Assignment /projects / term paper

● Class presentation and discussion by students

● Case analysis depending on the nature of the course
ASSESSMENT SCHEME
● Presentations (group & individual) 25%
● Term paper 25%
● Final examination 50%
Total 100%
Text Book
Ross S, Westerfield. R., and Jaffe, J., &Kakani, RK. (2014). Corporate
Finance. 10th ed.
India: McGraw H
Reference Books :
1. Ross S, Westerfield. R., and Jordan, BD. (2000). Corporate Finance. 5th
ed. USA: McGraw
Hill.
2. Ross S, Westerfield. R., and Jaffe, J., &Kakani, RK. Corporate Finance.
10th ed. USA:
McGraw Hill.
3. Brealey, Myers & Allen. (2008). Corporate Finance. 9th ed. USA:
McGraw Hill.
4. Brealey, Myers & Marcus. (2001). Corporate Finance. 3rd ed. USA:
McGraw Hill.
5. Brealey, Myers & Marcus. (2012). Fundamentals of Corporate Finance.
7th ed. USA:
McGraw Hill.
6. Brealey, Myers & Marcus. (2001). Corporate Finance. 3rd ed. USA:
McGraw Hill.