University of Alberta School of Business Accounting and Management Information Systems

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1 University of Alberta School of Business Accounting and Management Information Systems ACCTG 523- Sections B1, B2, X5 and X6 Accounting Information and Internal Decision Making Instructor: Cheryl S. M c Watters Term: Winter Term 2010 Office: 4-30F Business Building Office Hours: By appointment Telephone: cheryl.mcwatters@ualberta.ca Class Times: B1: Monday and Wednesday, 14:00-15:20 Room: Tory Building B 87 B2: Tuesday and Thursday, 14:00-15:20 Room: Business 3-5 X5: Monday, 18:30-21:30 Room: Humanities Centre L-4 X6: Tuesday, 18:30-21:30 Room: Business 3-5 A. Course Overview This course focuses on how managers use accounting information and the accounting system to assist them in strategic planning, organisational decision making and management control. This course develops an appreciation of how the management accounting system provides organisational mechanisms to make planning and control decisions. The course is oriented towards training managers to utilise their internal accounting system, not towards training accountants to design and operate it. You will become familiar with management accounting information, including how this information is used to support strategic objectives. As well, the course will foster your understanding of how management accounting measures can both help and hinder the creation of organisational value. The emphasis is on technical skills, but equally, the interpretive, analytic and judgement skills required to understand what accounting means, and how accounting provides valuable information to managers. B. Career Focus This course prepares you to understand the various ways in which management information is collected, manipulated and disseminated in complex organisational settings. A key objective of the course is to integrate material in courses that you have taken and to apply this knowledge in solving real business problems. Many of the technical issues are discussed at a basic and conceptual level. In-depth study of these topics is not anticipated given the time limitations of the course. Employers expect MBA graduates to be confident in understanding and undertaking financial analyses. Cost analyses are important in many instances: pricing, outsourcing, marketing, take-overs and mergers. All of these require an understanding of cost structures and synergies. The intention is to make you aware of the great potential value of management information and to alert you to its limitations and pitfalls. The course should assist you in being a critical user of the accounting system to know what you can and cannot expect from it. C. Objectives and Pedagogy The course combines both theoretical and applied materials. Emphasis is placed upon in-class discussion. Specific objectives follow. ACCTG 523 Course Syllabus WINTER TERM

2 to provide an appreciation of the role of management accounting as part of the firm s organisational strategy, rather than as a set of computational topics; to gain an understanding of the strengths and limitations of an accounting system and the trade-offs between designing it for planning and designing it for control; to prepare, use and evaluate critically management accounting information for decision making in both a planning and control context; to understand behavioural and ethical issues in management accounting; and to sharpen analytic and problem-solving skills, including quantitative techniques. D. Evaluation Contribution 10 % Case Assignment One* 05% Case Assignment Two* 15 % Take-Home Midterm [due March 30th] 15 % Final examination 55 % * due at the beginning of class on the date of the in-class case discussion Letter grades will be assigned to the percentage marks in accordance with University Regulations [Section 23.4(4) of the University Calendar]. Grades will be based on a combination of absolute achievement and relative performance. E. Course Format The course will be blend of lectures and class discussion. You will be expected to read and study the cases, problems or readings in advance of each class. You should be prepared to answer questions regarding the class material if called upon. Small-group discussion sessions will be used. Accounting 523 includes ample opportunities to develop your analytic and problem-solving skills. However, you can only read so much about how to do financial analysis. Like sports or piano, you also must practice. Spend time working through the class material. The purpose of Accounting 523 is to make you a better manager, not to merely have you read problems and solutions. Most cases and problems look easy once you have seen the solution. A key part of practice is thinking about how you would solve a problem, attempting it, and then discussing possible solutions. Reading cases, problems and their respective solutions cannot help you analyse the situations that you will encounter in the final examination and in the business world. Much of the course information builds upon key concepts covered in the first half of the term. Keeping up with the material is important. It is more difficult to apply the advanced concepts in the latter part of the term if you have not invested time to learn the fundamentals. Perhaps more so than other subjects, accounting is difficult to learn by cramming. If you do little work at the beginning of the course, it is likely that you will be increasingly lost for the remainder. This course confronts numerous issues for which the solutions frequently are partial or reflect evolving ideas and on-going debate. Please be prepared to discuss and challenge issues and solutions and integrate these ideas into your own developing expertise. ACCTG 523 Course Syllabus WINTER TERM

3 The ulearn website will be used to notify you of important information, discussion questions and supplementary readings. Do ensure that you log onto the course website to keep up to date on class sessions. F. Reading Materials Supplementary materials will be posted on the course website for viewing and downloading. These readings are related to specific concepts and topics covered in class. The reference textbook is: Hansen, D.R., Mowen, M.M., Senkow, D.W. and R.M. Pollanen, Management Accounting, Sixth Canadian Edition, Nelson. The following are additional references on management accounting. As the reference textbook is one of many introductory books, you will find the coverage of the course topics in any of these other textbooks. You may prefer to utilise or supplement your reading with one of them. Refer to appropriate chapters outlined in their respective table of contents and index. Horngren, C.T., G. Foster, S. M. Datar, H. D. Teall and M.P. Gowling, Cost Accounting: A Managerial Emphasis, Fourth Canadian Edition, Pearson Education. McWatters, C.S., Zimmerman, J.L. and D.C. Morse, Management Accounting: Analysis and Interpretation, Pearson Education (or an earlier edition). A more advanced and technical approach is provided in: Kaplan, R. S., and A. A. Atkinson, Advanced Management Accounting, Third Edition, Prentice Hall. Zimmerman, J.L., Accounting for Decision Making and Control, Sixth Edition, McGraw-Hill Irwin (or an earlier edition). For those interested in a conceptual approach to management control, and one that stresses its links to strategy and organisational design and analysis, I recommend: Macintosh, N., Managerial Accounting and Control Systems: An Organisational and Behavioural Approach, John Wiley. Cases: The required cases for this course are on the ulearn site under Case Materials. Please note that you have the privilege of printing one copy for personal use but have no copyright release to distribute them. As this course places significant emphasis on quality of presentation, you may find it helpful to refer to May, C.B., and G.S May, Effective Writing: A Handbook for Accountants, Seventh Edition, Prentice Hall. (Early editions of this book are in the first author s former name, Aravelo, C.B.) ULearn will be used to notify students of important information, facilitate interaction, and post additional readings, etc. Additional readings will be provided during the course to underscore a particular issue or concept. You should make use of these readings to supplement your textbook reading and, as you deem appropriate, to support your case analyses. These readings have been selected as a starting point only and are not presented as the definitive view on any topic. G. Assignments and Take-Home Midterm Examination The Case Assignments and Mid-Term Examination will be done on an individual basis. However, you may work with one other classmate to complete the two case assignments. The Midterm is an individual effort only. ACCTG 523 Course Syllabus WINTER TERM

4 Case Assignments: You are required to hand in two, formally-written, case reports. The specific cases follow: Case Assignment One: Survey Masters LLC OR Cambridge Hospital (5% of your grade) Case Assignment Two: Citibank Indonesia OR Mobil Oil (A) (15% of your grade) I would ask you to provide me by Thursday, January 19 th (via preferably) the names of the two cases that you have selected to submit. Once you sign up, I would prefer that you not change your selected cases. Knowing who is preparing a specific case will enable us to plan more effectively for the class discussions. The rationale behind the weighting of the first case report is for you to learn early on my approach and expectations regarding case analysis, in a situation where relatively few marks are at stake. Case reports should be economically written. I deduct marks for padding, irrelevant material and inefficient expression. The case report is to be presented as a full report, with headings, exhibits, appendices, and references, as appropriate, and cover the main issues that you identify. If there are questions associated with the case, use them as guidance, but do not be limited by them. Specific directions and details on your role in the assignment cases will be posted under Case Assignments on the course website. The case reports are to be handed in at the beginning of the class in which the case will be discussed. You should keep a copy of your report so that you can refer to it in class. Each case report is limited to five pages. I would be grateful if you would use 1.5 spacing, and Times New Roman 12 pt font. The page limit excludes any exhibits, cover page, bibliography, etc. The page limits will keep your report focused and concise. Do not try to aim for five pages immediately but reduce the text through editing. Your exhibits should be used efficiently and effectively. Don t pad your report with excessive use of exhibits. The inclusion of too many only serves to reduce their overall impact. Submit two copies for each case. One marked copy will be returned to you. I will retain the second copy. Case reports will be evaluated not only on content, but also on presentation (including spelling, grammar structure and format). Case reports are to be written in complete sentences; point form and lists are not appropriate. Case reports must reflect your own ideas and research, although they may be supported by references and sources to provide more substance to your analysis and arguments. All references and citations no matter the origin journals, newspapers, magazines, periodicals, Internet sites, etc. must be included in the report. Do not conduct any interviews as we do not have ethics approval for human research and interviews. A document on case analysis and preparation is posted on the ulearn site. Please read this document carefully as accounting case analysis may differ from the approach you have used in other courses. Assignments can be submitted in class or via the course drop-off boxes prior to class. No late assignments will be accepted. The two case assignments are worth 20 per cent of your overall grade. Take-Home Midterm: This mid-term will consist of a set of problems and mini-cases to be prepared as an open-book exercise. This examination is to provide an evaluation of your grasp of concepts and techniques, as well as your ability to analyse results. The details of this examination will be provided in class and on the ulearn site. The mid-term comprises 15 per cent of your overall grade. It is done on an individual basis. The due date of the mid-term examination is March 30 th at 18:00. H. Final Examination The final examination will be scheduled as per the timetable set by the University. It will presume a high degree of familiarity with the material including class sessions, discussions, readings and cases. The best ACCTG 523 Course Syllabus WINTER TERM

5 way to prepare for the final exam is to prepare carefully for class. The final exam is worth 55 per cent of your overall grade. It is a closed-book examination. I. Contribution Your course contribution is essential, both to your learning and to that of your peers. Most communications in business are oral. Effective contribution is reflected in focused comments, analyses that illustrate your command of the readings, and application of knowledge from other classes and/or prior experience. Thus, you may be called to comment, critique, or lead discussion of the reading material and cases, either as an individual or as a group. Class discussions also give you an opportunity to demonstrate your skills and your ability to think on your feet. Your contribution will be evaluated in terms of quality and not simply quantity, representing 10 per cent of your overall grade. While regular participation in class discussion is a factor, the content, timing and quality of your remarks are most critical. Attendance will be monitored as the first step to contribution is being present. I encourage your active participation in class. Most students tend to under- (rather than over-) estimate the value of what they have to contribute. If you come to class prepared, it is likely that you will want to contribute and use the class time to think about and respond to each other s analyses and ideas. Your contribution grade will be based on my evaluation of your overall contribution to the course. J. Course Policies Academic Integrity: Organisational members are expected to operate ethically. This ethical standard applies to all members of the School of Business - faculty, staff and students. As a CMA, I also am bound by the code of ethics of my professional organisation (see The University of Alberta is committed to the highest standards of academic integrity and honesty. Students are expected to be familiar with these standards regarding academic honesty and to uphold the policies of the University in this respect. Students are particularly urged to familiarise themselves with the provisions of the Code of Student Behaviour (online at and to avoid any behaviour, which could potentially result in suspicions of cheating, plagiarism, misrepresentation of facts and/or participation in an offence. Academic dishonesty is a serious offence and can result in suspension or expulsion from the University. (GFC 29 SEP 2003) Useful resources are available on the University s Truth in Education webpage ( Note: Please read the University s policy on plagiarism at Special Needs: I would like to hear from anyone who has a disability that may require some modification of seating, testing or other class requirements so that appropriate arrangements can be made. Please see me before or after class. Special arrangements must be made before any tests are administered. K. University Policy on Course Outlines Policy about course outlines can be found in Section 23.4(2) of the University Calendar. (GFC SEP 2003) ACCTG 523 Course Syllabus WINTER TERM