Learn the meanings of the strategies and concepts behind a company’s financial statements.
Duration: 8 weeks
In MSA 604 The Theory and Practice of Financial Reporting, you will examine the flexibility of U.S. GAAP (Generally Accepted Accounting Principles) for income and the various management techniques that can be used to influence the formal presentation of an organization's financial statements. You will evaluate the movement toward a single set of GAAP accounting and financial statement presentation rules for the global economy. As you grasp the specific reasons behind a balance sheet’s structure, you will observe how the income statement is used as an audit tool to illustrate cash flow. You will also become familiar with time-series and cross-sectional financial statement analysis.
You will consider how discounted cash flows functions as the main valuation technique used by the credit industry and stock analysts to evaluate a company’s ability to meet obligations and provide future income streams for investors. You will inspect various approaches to equity valuations as you work your way through a mock business valuation opportunity. You will also evaluate credit risk concepts and methods for conducting a credit analysis. Management compensation is an industry hot topic, and you will see how major U.S. corporations handle this often-controversial issue.
Inventory and accounts receivable valuation can make up an inordinate share of a firm's total assets, and you will arrive at an understanding of how to use both to analyze operations methods and cash flow philosophies. You will consider the challenges of valuing inventory in terms of weighted average, LIFO and FIFO techniques.
What You Will Learn in MSA 604
You will review the GAAP techniques for measuring the carrying amount of long-lived assets, and for reporting asset impairment and other depreciation estimate methods. Many corporate balance sheets include bonds and their liabilities for paying and presenting interest and principal obligations. You will observe how to portray bond cash flows, bonds issued at par, premiums and/or discounts. You will also consider the proper GAAP accounting and presentation rules for contingent liabilities. You will acquire a deeper understanding for the use and misuse of lease agreements to avoid GAAP accounting and corporate income tax reporting.
After choosing an existing major company to research, you will use its recent Annual Cash Flow Statements and its Income and Balance Sheets and prepare a complete Financial Report and Analysis, examining a number of designated financial reporting areas.
The statement of cash flows is the link between the balance sheet and income statement operations. You will examine key statement format issues involving operations, investments and financing decisions. You will see how operating cash flows can be distorted using measurement tools such as the changes in net workings capital, capitalizing versus expensing and the impact of stock options in terms of cash management. You will also see how global business requires its own presentation of owners’ equity.
Throughout this course, weekly topics may include but are not limited to:
- The Economic and Institutional Environment for Financial Reporting
- The Structure of Balance Sheets, Cash Flow Statements, and Financial Analysis
- The Role of Financial Information, Cash Flow Analysis and Credit Risk Assessment
- Receivables and Inventory
- Long-Lived Assets and Depreciation, and Financial Instruments as Liabilities
- Leases and Understanding Income Tax Reporting
- Statement of Cash Flows
- Financial Reporting for Owner’s Equity
Course Learning Outcomes
Upon successful completion of MSA 604, you will be able to:
- Identify factors that influence accounting choices by managers.
- Distinguish among the various accounting regulatory decisions made by the FASB and other financial reporting rule-makers.
- Research authoritative guidance to identify appropriate accounting treatment of complex situations.
- Analyze the ramifications to financial statements of accounting changes made by government regulators, particularly those changes addressed by the Sarbanes-Oxley Act of 2002.
- Utilize financial statement information as a tool for decision making.
- Differentiate between IFRS and FASB standards for financial statements.
Request More Information Today
To learn more about the online Master of Business Administration curriculum from Benedictine University, including The Theory and Practice of Financial Reporting, call (866) 295-3104 to speak with a program manager or request more information.
Course content and outcomes may vary and are subject to change without notice.