BFA582 Financial Reporting & Analysis Semester One 2011 (Part -Time)

Transcription

1 BFA582 Financial Reporting & Analysis Semester One 2011 (Part -Time) School of Accounting and Corporate Governance Faculty of Business Unit Outline Unit Coordinator: William Maguire Lecturers: William Maguire; Kerri O Donnell CRICOS Provider Code: 00586B 1

2 Your lecturers: William Maguire and Kerri O Donnell William holds a BCom and a Certificate in Theory of Accounting from the University of Natal at Durban, an MBL (Master of Business Leadership) from the University of South Africa and a PhD from the University of Cape Town. He is also a Chartered Accountant (South Africa). He worked in public accounting and commerce and industry before joining academe. He has held permanent positions at the Universities of Natal, Cape Town, and Auckland; and visiting appointments at Melbourne, Texas at Dallas and Copenhagen Business School. He has been a senior lecturer at UTAS since His teaching and research interests span management control, cost management, revenue management and related reporting. Kerri holds a BCom (Accounting) from UTAS and is a Certified Fraud iner. She worked in Sydney for 17 years, and has business, legal and tertiary education experience, mainly in the entertainment industry. She has been teaching at UTas since Her teaching interests include both financial and management accounting. Her research interests involve various contexts of risk management, behaviour and cognition. She is currently a research higher degree candidate, exploring professional scepticism and financial statement fraud. Contact details Lecturer and tutor: William Maguire Campus: Hobart Room: william.maguire@utas.edu.au Tel: Fax: Lecturer and tutor: Kerri O Donnell Campus: Hobart Room: kerrio@utas.edu.au Tel: Fax: Postal address: School of Accounting & Corporate Governance University of Tasmania Private Bag 86 HOBART TAS

3 Contents Page Unit description and Aims 4 Learning outcomes 4 Generic graduate attributes 5 Learning resources required 6 Details of teaching arrangements 7 Assessment details 7 How your final result is determined 10 Submitting assignments and penalties 11 Requesting extensions 12 Returning assignments 12 Academic referencing 12 MyLO Plagiarism Other information and assistance 14 Unit schedule 15 3

4 Unit Description and Aims Welcome to Financial Reporting and Analysis. We hope that you find the unit challenging and rewarding. It aims to develop your ability to understand, use and interpret financial reports and information from the points of view of a manager and an investor. The unit assumes that you have no previous knowledge of accounting. In this unit our main aim is to give you the ideas, concepts, analytical skills and language to pass the subject. We want you to understand how and why accountants, managers and other people affected by accounting (its numbers) think and behave in contemporary Western Society. The unit is not concerned with the skills and knowledge needed by a professional accountant. We do not expect you be able to design and maintain accounting systems - this is the task of the professional accountant. However, as a manager you must able to communicate intelligently with accountants, investment advisers and other managers and feel confident in using financial information and terminology in managing an organisation. You should also understand articles in the financial media and contemporary debates about issues and events, such as the recent financial crisis. In other words you should become financially literate by understanding the language of business. Learning Outcomes/Generic Graduate Attributes The University has defined a set of generic graduate attributes (GGAs) that can be expected of all graduates. You can read about them on the following website: By undertaking this unit you should make progress in attaining the following attributes: 4

5 Learning Outcomes/Generic Graduate Attributes Learning Outcomes In this unit students will learn: To read and interpret financial reports and knowledge of the origins of financial data: The skills and concepts necessary to use and interpret the data offered in financial reports: To make decisions based on the information contained in financial reports: Communicate financial information: Assessment Criteria: In assessing the learning outcome we will be looking at ability to: Explain the legal and organisational setting in which financial information is prepared and used Define the elements of accounting reports and describe the principles and concepts underpinning the preparation of financial statements Analyse and interpret information contained in internal and external financial reports. Record accounting transactions and prepare simple financial reports. Analyse and interpret information contained in internal and external financial reports. Identify inherent limitations of the information contained in a financial report. Use financial information and financial models to make decisions about the efficient and effective allocation of economic resources within an organisation. Consider the contemporary issues of ethics and social responsibility in accounting. Explain orally, to internal and external stakeholders, the reasons behind financial decisions. Write a report that details the financial decisions from financial data analysed. Assessment Methods Online tests Online tests Online tests Online tests Online tests Graduate Attribute Outcomes The assessments and teaching activities in this unit have been designed to develop the following graduate attributes in students: Knowledge Communication Problem solving Global perspective Social responsibility Knowledge Communication Problem solving Global perspective Social responsibility Online tests Knowledge Problem solving Social responsibility Knowledge Problem solving Social responsibility 5

6 Alterations to unit as a result of student feedback No alterations to the unit were required following feedback in Learning resources required Prescribed Text Atrill, P, McLaney, E, Harvey, D & Jenner, M 2009, 4th edn, Accounting: An introduction, Pearson Education Australia Pty Ltd, Sydney. You should also obtain a recent copy of an Australian company s annual report to shareholders (the full version, not the concise report) from companies websites specified by your co-ordinator. The reports will be of companies that sell inventory and will exclude reports of financial, banking or mining companies. Recommended Reading The publications listed below are recommended for further reading on the topics covered in the unit. Books Bazley, M & Hancock, P 2010, Contemporary Accounting, 7 th Australia Pty Limited, Melbourne. edn, Cengage Learning Carlon, S, Kimmel, PD, Loftus, J, Mladenovic, R, Kieso, DE & Weygandt, JJ 2009, Accounting: Building Business Skills, 3 rd edn, John Wiley & Sons Australia Ltd, NSW. Godfrey, JM & Robb, AJ 1997, The Australian Dictionary of Accounting and Finance Terms, 3 rd edn, Longman, Melbourne. Horngren, CT, Harrison, WT, Best P, Fraser, D, Willet, R, Accounting 6 th edn, Pearson, Melbourne. Pierson, G & Ramsay, A 2003, Financial Accounting an introduction, 3 rd edn, Longman, Melbourne. Journals and Periodicals In additional to reading other books, you will find it valuable to read relevant articles from journals and periodicals (including the Business section of the Australian, the Financial Review and magazines, such as The Economist). The Australian Accounting Review is a particularly relevant academic journal. Restrict your reading to periodicals and journals available from University of Tasmania libraries. Other References There is a list of references at the end of most topics in your text, which provides full detail for all references cited. The items in these reference lists may be helpful in supplementing your reading. 6

7 Details of teaching arrangements Weekly Workshops The dates, topic, and readings are detailed in the unit schedule on the last page of this outline. Assessment details To pass this unit you must achieve an overall mark of at least 50 per cent of the total available marks. Details of each item of Coursework are given in the Assignment Topics section. Method of assessment Weight date due (at 15.00) Length*/ duration Coursework Assessment task 1 On-line tests 10 To be advised Assessment task 2 Transactions and financial statements March As required Assessment task 3 Internal report April 1,500maximum words Assessment task 4 Report analysis and interpretation 20 9 May 1,500 maximum words ination 50 period 3 hours + 15 minutes reading time Total Marks 100 * Word Limit: The word count includes such items as headings, in-text references, quotes and executive summaries. It does not include tables, appendices or the reference list at the end of the assignment. Assessment tasks Submit the first two assessment tasks individually. While you may discuss the assignments with your peers, the assignment that you submit must be your own work. Submit assessment task 3 as a team. 7

8 Assessment Task 1 10% On line tests Answer on-line tests as required Assessment Task 2 10% Task description Record accounting transactions using worksheets and prepare financial reports. (The transactions and worksheets will be handed out at the first workshop/ tutorial). Task length As appropriate (show all workings and calculations) Links to unit s learning outcomes Refer to the table on page 5 Date due Monday 14 March Assessment Task 3 10% Task description Internal report Task length Links to unit s learning outcomes Date due Assessment Task 4 20% Task description Task length 1,500 words Refer to the table of page 5 Monday 11 April Financial Analysis of an Australian listed company 1,500 words max. Links to unit s learning outcomes Refer to the table on page 5 The following guide relates to the practical completion of the ratio and other analysis, and the report presented. Date due Monday 9 May 8

9 Topic: Financial Analysis of an Australian listed company A major investor has asked you to analyse the annual reports of a listed company of your choice. The company will include inventory in its balance sheet, and will not be a mining company or be involved in banking and financing. The investor is considering either buying a substantial block of shares in the company or subscribing to a forthcoming issue of five-year unsecured debentures. To complete the Assignment you will need to understand Topic 4 thoroughly (together with the related readings). You will find most listed Australian companies have web sites that are useful to research the company s background, current financial status and future prospects. There are other useful web sites that give industry average data that you can use for comparisons. Below is a suggested contents page that you may find helpful in structuring your report. Contents Part I Overview Introduction and terms of reference Basis of analysis Sources of information Part II Financial analysis History and nature of business (what it does) Summary of key financial data (that you use for your analysis) Trends in profit and cash flows Ratio analysis o Profitability o Management efficiency o Liquidity o Capital structure o Industry comparison (if applicable) o Prospects (trends and predictions) Part III Other Considerations Non-financial influences/considerations (political, economic, managerial) Part IV Conclusions Conclusions/recommendations Limitations to analysis Disclaimers Reference List Appendices A summary of the key figures in the financial statements on which ratios were based (up to 2 pages) Explanation of terms/ratios Ratio calculations When you submit your assignment you should append a double-sided copy of the company s annual report. This should be a hard copy of at least the financial statements and notes (preferably the whole report). Also attach a pair performance report. 9

10 ination 50% Description / conditions Date A three-hour closed book final examination. Information about the content of the examination will be provided in the lecture in Week 13 The final examination is conducted by the University Registrar in the formal examination period. See the Current Students homepage (inations and Results) on the University s website. Format The final examination will be of three (3) hours duration, preceded by 15 minutes reading time. The exam will contribute to 50% of the overall assessment of the unit. Nonprogrammable calculators are permitted into the examination room. Further information about the examination will be given during the semester. Scheduled date and place of the examination The final examination will be held during the scheduled examination period as advised by Student Administration. inations are normally scheduled Monday to Saturday inclusive. They may be held during the day or evening and students should consult the university information that is made available towards the end of semester. Make necessary arrangements with employers now for time off during examination period to sit this examination. You are expected to sit the examination at your recorded study centre. Supplementary ination Except in special circumstances and on the recommendation of the lecturer-in-charge or the Head of School, a student who fails will not be granted a supplementary examination. How your final result is determined We work out your final result simply by adding your weighted marks for the different assessment components of the unit. To obtain a pass grade or better in the unit, the sum of the weighted marks must be 50% or more of the marks available. The School expects high standards and insists that you spend sufficient time (12 hours a week) and effort to your studies throughout the semester to achieve grades of pass or higher on merit. As noted previously, this needs good time management. 10

11 Submitting assignments and penalties Your assignments are to be presented and submitted in accordance with the Guide for Students - Presentation and Submission of Assignments issued by the Faculty of Business. The Faculty of Business Guide for Students is available via MyLO or from the school s website - The appropriate individual assignment cover sheet must accompany all assignments. Again, we draw to your attention to the University s rules on plagiarism. Assignments containing any plagiarised information will be given a zero mark and will be subject to the disciplinary processes of the University. Please read the section on plagiarism. If you are not sure what constitutes plagiarism, ask your lecturer. Assignments will be marked as quickly as possible after all have been submitted, and will be returned with comments and marks achieved. Assessment Submission Policy 1. In this Policy a. day or days includes all calendar days, including weekends and public holidays; b. late means after the due date and time; and c. coursework includes all internal non-examination based forms of assessment 2. This Policy applies to all students enrolled in Faculty of Business Units at whatever Campus or geographical location. 3. Students are expected to submit coursework on or before the due date and time specified in the relevant Unit Outline. The onus is on the student to prove the date and time of submission. 4. Students with special circumstances may apply for an extension. Requests for extensions should, where possible, be made in writing to the Unit Coordinator on or before the due date. Students will need to provide independent supporting documentation to substantiate their claims. 5. Late submission of coursework will incur a penalty of 10% of the total marks possible for that piece of assessment for each day the coursework is late unless an extension had been granted on or before the relevant due date. 6. Coursework submitted more than five (5) days late will not be accepted. 7. Academic staff do NOT have the discretion to waive a late penalty, subject to clause 4 above. Word length The word limit specified on your assessment task is a maximum. If you submit over-length work there will be an automatic 10% penalty of available marks. It will be at the discretion of the Unit Coordinator whether the words beyond the limit will be assessed. Title pages, reference lists and appendices are not included in word counts. 11

12 Requesting extensions Consistent with the Faculty s policy on late submission, you will only be given extensions of time on medical or compassionate grounds. They will not be granted because of work or other commitments. Make your request for an extension to the unit coordinator in writing on the School s Application for Late Submission Form (available on MyLO) before the due date of the assignment. You must attach medical certificates or other evidence to support your application, and these must contain enough information to justify the extension. Returning assignments Assignments will be returned during workshops or can be collected from the lecturer s room at nominated times; they will not be available from the School s offices. In some circumstances they may be mailed to you. Academic referencing In your written work you must support your ideas by referring to texts and scholarly literature. It is important that you understand how to correctly refer to the work of others and maintain academic integrity. If you don t appropriately acknowledge the ideas of others it constitutes academic dishonesty (plagiarism or cheating), which the University considers a serious offence. The appropriate referencing style for this unit is the Harvard referencing method. The required text for this unit, Fleet, W, Summers, J & Smith, B 2006, Communication Skills Handbook for Accounting, gives detailed information about using the Harvard referencing system. More information on presentation of assignments, including referencing styles is available at: You can also access information about the referencing style for this unit in the Faculty of Business Guide for Students available via MyLO or from the school s website - Please read the statement on plagiarism. If you don t understand it please see your unit coordinator or lecturer. MyLO As you know, MyLO is the internet service that is adopted by the University and is used in this unit for posting PowerPoint presentations and readings, and for registering for tutorials. MyLO can be accessed on computers in computing laboratories at the University or on your computer at home or at work. Information about accessing and using this service, about required computer specifications, frequently asked questions, and about how to get help if you experience difficulties, is available at the following University website: You should visit this site and become familiar with its features, especially if you haven t used it before. You will probably be using it in other units that you are studying as well. Here are some important points about accessing our web site: 12

13 Access to MyLO You can access MyLO from the Student Page on the University s web site: Quick Links MyLO or go directly to the web address noted above: Enter your POP account Username (for example, wmaguire) and your Password. These are identical to the pop account/ username and password that you are given with your enrolment confirmation form. If you forget your pop account username, contact the Help Desk (see below under getting assistance with MyLO). Both MyLO and passwords must remain the same. If you are going to change your password, change your password first. When you enter your user name and password, click on OK and choose BFA582 from the list of units (subjects) in which you are enrolled. [NOTE: Another box may sometimes appear when using the University network which asks you to verify your user name and password, this is simply a security device enter your password when asked and click OK]. o MyLO will automatically check that your browser is properly configured. If the MyLO browser checker window appears scroll down to make sure you have a tick in each area shown then close the window. From the Unit s homepage click on the area you wish to access e.g. Unit Information. A table of contents will appear on the left hand side of your screen. Scroll through the list until you find what you want & click the underlined topic. Plagiarism Plagiarism is a form of cheating. It is taking and using someone else's thoughts, writings or inventions and representing them as your own; for example, using an author's words without putting them in quotation marks and citing the source, using an author's ideas without proper acknowledgment and citation, copying another student's work. If you have any doubts about how to refer to the work of others in your assignments, please consult your lecturer or tutor for relevant referencing guidelines, and the academic integrity resources on the web at: The intentional copying of someone else s work as one s own is a serious offence punishable by penalties that may range from a fine or deduction/cancellation of marks and, in the most serious of cases, to exclusion from a unit, a course or the University. Details of penalties that can be imposed are available in the Ordinance of Student Discipline Part 3 Academic Misconduct, see The University reserves the right to submit assignments to plagiarism detection software, and might then retain a copy of the assignment on its database for the purpose of future plagiarism checking. For more information on the above statement and general referencing guidelines, see or follow the link under Policy, Procedures and Feedback on the Current Students homepage. 13

14 Other information and assistance If you are experiencing difficulties with your studies or assignments, have personal or life planning issues, disability or illness which may affect your course of study, you are advised to raise these with your lecturer in the first instance. There are a range of University-wide support services available to you including Student Services, International Services and Learning Development. Please refer to the Current Students homepage at: Should you need help in accessing the Library visit their website for more information at If you have a problem In the first instance you should discuss the issue with your unit coordinator, lecturer or tutor. If you have a discussion with the appropriate person and are not satisfied with the outcome, then contact the course coordinator: MBA Name: Mark Wickham Room: 312 Ph: (03) mark.wickham@utas.edu.au Discussions with the major / course will be kept in strict confidence. You are also welcome to raise issues with the Head of School, Sue Hrasky, who you can for an appointment (Sue.Hrasky@utas.edu.au). If you are on the Launceston or the Cradle Coast campus and the coordinator is not located on that campus, you may consult Trevor Wilmshurst (Launceston, Trevor.Wilmshurst@utas.edu.au) or Steve Allen (Cradle Coast, Stephen.Allen@utas.edu.au ) with whom you can also have confidential discussions. If you wish to pursue the matter further, a student advocate may be able to assist you. Information about the advocates is available at: The University also has formal policies, and the following link gives you advice about the procedures that you can follow: Students with Disabilities University & Faculty Equity Plans Goal 1 of the University of Tasmania Equity Plan provides for: An inclusive teaching and learning environment that values diversity, supports the pursuit of academic excellence and produces high quality education and employment results for all students and staff. The Faculty of Business Equity Plan facilitates the University Plan at an operational level and has developed an Action Plan. The Action Plan for Goal 1 lays down procedures to ensure that all students, including those with disabilities, have equal access to lecture and course materials. The School of Accounting & Corporate Governance complies with these procedures. 14

15 Unit Schedule Semester 1, 2011 Workshop no. and date Topic Atrill et al: Chapter 1 26 February Introduction to accounting and finance; different accounting entities. Measuring and reporting financial position 1, 2, March Measuring and reporting Income flows Cash flows Analysis and interpretation of financial statements 4, 5, March Cost-volume-profit analysis and marginal analysis Full costing 7,8 4 9 April Budgeting Projected financial statements Capital investment decisions 9, 10, April Security and business valuations April Easter break 21 April to 27 April 6 14 May Management of working capital Financing the business May Trends and issues in accounting Unit review 14, 15 *Complete the review questions for each chapter as these will help you to understand the subject matter for each topic, and complete the problems and cases before each workshop. 15