BSc Accounting with Industrial/Professional Experience

Year of entry: 2021

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Course unit details:
Corporate Financial Communication and Valuation

Unit code BMAN31610
Credit rating 40
Unit level Level 3
Teaching period(s) Full year
Offered by Alliance Manchester Business School
Available as a free choice unit? No

Overview

This course unit is explicitly skills-based. It provides an opportunity to apply existing knowledge from other course units in accounting and finance, as well as other subjects you may have studied. It also presents new ideas and material intended specifically to help you develop and enhance your skills of research and analysis.
The course unit is research-based, with the work carried out in groups in semester 1 and individually in semester 2.  It is crucial for you to recognise that the key focal points of this course unit are the researching, preparation and submission of the assessed pieces of work. As the assessment for this course unit is based upon a group project, a personal essay, and a personal company case study, all requiring the integrative application of existing and new knowledge, it is the independent undertaking of these assessments that is the main driving force on this course unit, and these assessments are entirely your responsibility, whether working with other students in your project group in semester 1, or individually in semester 2. 
Note that the Semester 1 group valuation project represents a 'classic' accounting valuation project, the underlying theoretical positions and methodological approaches of which are then subject to critique and development via the personal essay; which then allows students to form their own judgement as to how an accounting valuation and/or investment analysis project should be conducted (and defended and justified) with the more ‘free flowing’ spirit of the personal company case study providing students with the opportunity to intellectually challenge, express and demonstrate their self-development and application capacity.
Tutorials are used at appropriate staging posts or points in the course, providing sounding boards for the development of ideas and appropriate guidance on how to approach and organise the project assignments. While guidance and feedback is given to assist students, the assessments remain entirely a responsibility of the student.

The course will include lecture presentations by the three lecturers.

Online information about the course will be available on Blackboard. This will include the course description, lecture notes, and other support materials.
 

 

Pre/co-requisites

Compulsory for and available only to students on the BSc Accounting programme.

Pre-requisites: Completion of the second year of the BSc Accounting

 

Aims

The course aims to:
1.    introduce the concept of comprehensive financial statement analysis comprising four components: business strategy analysis, accounting analysis, financial analysis, forecasting and valuation;
2.    develop the theoretical relationships between accounting numbers and stock market values;
3.    develop an understanding of the usefulness of financial accounting information from evidence in the field;
4.    develop the theoretical foundations of research on financial communication; 
5.    develop an understanding of the determinants and economic consequences of corporate social responsibility reporting; 
6.    introduce the experience of working on a group project; and
7.    introduce the experience of working on a supervised mini-research project involving a longitudinal company case history.
8.    challenge you technically and intellectually in order to prepare you for a demanding research role, eg a MSc or PhD, or complex and challenging work environment. 

 

Learning outcomes

On successful completion of this course unit students will be able to:
1.    understand the four components of a comprehensive financial statement analysis, including the links between the four components;
2.    explain the principles of using accounting and other information to value a company; 
3.    critically evaluate the usefulness of financial accounting information for investors;  
4.    understand and discuss the formal and informal processes companies use to communicate with investors;
5.    understand and discuss determinants and real effects of corporate social responsibility reporting;
6.    demonstrate an ability to work as the member of a team in the context of a company valuation exercise; and
7.    demonstrate an ability to put into practice transferable skills such as team working, project management, time management, assimilation of complex management information and business report writing.

 

Teaching and learning methods

Lectures:        36 one-hour lectures;

Tutorials:        12 one-hour tutorials, including group presentations;

Total study:    400 hours split between lectures, tutorials, self-study, reading, and team meetings.

 

Informal Contact Methods

1. Office Hours

Assessment methods

The course is assessed 100% by coursework and all coursework submission should be through Blackboard as specified by the lecturer. The three pieces of assessed coursework and their weightings are as follows:

1.    A group valuation project (with 4–6 students per group, assigned by the course convenor) with the report submitted via Blackboard at the end of Semester 1. The weighting for the group valuation project is 33%. More information – including title, description, and case study company – will be provided early in Semester 1 via lectures and Blackboard.

2.    A personal essay (a recommended length of no longer than 3000 words, excluding references) on an aspect of financial accounting communication, to be submitted via Blackboard in Semester 2 as specified by the lecturer. The weighting for the personal essay is 33%. More information and guidance will be provided in tutorials 1-4 in Semester 2.

3.     A personal company case study of a firm’s financial and management communications over a 5 year period to be submitted via Blackboard at the end of Semester 2.  This is a comprehensive due diligence business report consisting of a maximum 15 double spaced pages (in 12pt font) plus up to 12 pages of appendices, plus references, title page and ToC. The weighting for the personal company case study is 34%.  This pulls together the technical aspects of project one and the theoretical discussions from project two to enable students to use their intellectual ability to develop their own business report.
 

Feedback methods

Feedback to Students
Feedback will be provided to students on the group project progress reports in semester 1 and the draft essay plan in semester 2. In addition students will get feedback on their assessed essay and their assessed group valuation project. Feedback will also be given in the tutorials. Students will be able to attend office hours to discuss their questions and progress with course lecturers and academic advisors. Feedback for all formative assessment and assessed coursework is returned within 15 working days of the submission deadline. A working day is defined as Monday to Friday, not including bank holidays and excluding student vacation periods and University examination periods.

Feedback from Students
In addition to the central unit survey students are encouraged to provide feedback on the course in the tutorials, and especially in the final two Q&A sessions in Semester 2.

Recommended reading

The main textbook recommended for purchase for work in the first semester is: 

K Palepu, PM Healy, & E Peek, Business Analysis and Valuation, IFRS Standards Edition, Cengage Learning – third (2013) or fourth (2016) or fifth (2019) edition.

The supplementary book reading comes from: 

S. Penman, Financial Statement Analysis and Company Valuation, McGraw Hill, second edition or later.

J.B. Barney and D.N. Clark, Resource-Based Theory, Oxford University Press, 2007, available as an e-book in the library.

The following journal articles are relevant:

For lectures on the usefulness of financial accounting information in Semester 1: 

Cascino, S., Clatworthy, M., Osma, BG., Gassen, J. & Imam, S. (2020). The Usefulness of Financial Accounting Information: Evidence from the Field. Available at SSRN: http://dx.doi.org/10.2139/ssrn.3008083.
Cascino, S., Clatworthy, M., Osma, BG., Gassen, J., Imam, S. & Jeanjean, T. (2014). Who Uses Financial Reports and for What Purpose?: Evidence from Capital Providers.  Accounting in Europe, vol 11., pp. 185-209.

For lectures on financial communication in Semester 2: 

Beyer, A., Cohen, DA., Lys, TZ. & Walther, BR. (2010). The Financial Reporting Environment: Review of the Recent Literature, Journal of Accounting and Economics, Vol. 50, pp. 296-343.

Christensen, H, Luzi, BH & Christian L (2019). Adoption of CSR and Sustainability Reporting Standards: Economic Analysis and Review. Available at SSRN: http://dx.doi.org/10.2139/ssrn.3427748

Other references will be provided via the lecture presentations and should be followed up.

For the personal company case study, a useful example of how to describe the evolution of a firm’s reporting practices over time is:

Campbell, D., Ridhuan, M. & Rahman, A. (2010). A Longitudinal Examination of Intellectual Capital Reporting in Marks & Spencer Annual Reports, 1978–2008. British Accounting Review, Vol. 42, pp. 56–70.

Good books for signs of corporate failure and red flag indicators:
Steer, Tim (2018) The Signs Were There. Profile Books – London.
Schilit, M, Perler, J., Engelhert, Y., (2018), Financial Shenanigans. McGraw Hill – London. 4th Edition.

Other essential material comes from:

Analysts’ Reports are available via Thomson Research. Students are reminded that it is essential to cite any material they use from such reports.

Supplementary study notes prepared by the lecturers and available from Blackboard.
 

Study hours

Scheduled activity hours
Lectures 36
Tutorials 12
Independent study hours
Independent study 352

Teaching staff

Staff member Role
Thomas Schleicher Unit coordinator
Mike Strivens Unit coordinator
Wei Jiang Unit coordinator

Additional notes

Staff involved: Dr Thomas Schleicher, Dr Wei Jiang, Dr Mike Strivens.

Pre-requisites: Completion of the second year of the BSc Accounting.
Co-requisites: None.
Dependent courses: None.

Programme Restrictions: Available only to BSc Accounting students.

For Academic Year 2021/22

Updated: March 2021

Approved by: March UG Committee

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