ACCOUNTG 592 - Corporate Financial Reporting

Course Overview – Watch FAQ VIDEO HERE

When companies report financial performance to the capital market, do you understand and believe what management communicates?  This course gives you the skills to rigorously evaluate and understand corporate financial reporting.  Earnings press releases from corporate management and related media coverage attempt to explain and interpret reported accounting numbers.  Are the accounting numbers being managed?  How can you tell?  How do incentives of managers and other market participants like financial analysts and regulators influence reported performance? For accounting numbers to be managed and for incentives to play a role, there must be some level of discretion in the financial accounting system.  As such, in this course we identify and study the areas of financial reports that require the most managerial discretion.  These areas naturally include accounting estimations that span multiple periods, including long term revenue recognition, long term receivables, restructurings, contingent liabilities, leases, uncertain tax positions, stock based compensation, pensions and derivatives.
This course is highly recommended for anyone with an interest in consulting, credit and equity analysis, investment and commercial banking, and any other career where an understanding of financial reporting is part of the decision making process.

Course Requirements

Readings, exercises, and problems and cases are assigned for each class. Lectures, handouts, and course pack materials summarize background information and technical issues. Assigned problems and cases are the major focus of class discussion. Grades will be determined based on two quizzes, three assignments, class participation and a comprehensive final examination.

Representative Topics

Contract Revenue Recognition and Channel Stuffing     
Reserves, Securitization and Contingencies
Restructuring
Pension and Post Retirement Obligations
Deferred Taxes, Valuation Allowances and Uncertain Tax Positions
Leasing (including synthetic leases)
Stock Options
Derivatives
Strategic Stock Repurchases & Earnings Per Share

Representative Readings

The principal textbook is Financial Reporting and Analysis by Revsine, Collins, Johnson and Mittelstaedt (5th Edition), McGraw-Hill Irwin.