Course Resources Archive

The module provides an advanced level course into the nature and importance of the external financial reporting environment facing large corporations and the impact of International Financial Reporting Standards on the financial reporting environment. The course looks at historical perspectives on the development of, and justification for, accounting regulation, and explores the development of conceptual frameworks for financial reporting. Using the published accounts of listed companies the module examines a range of technical issues relating to the preparation of consolidated accounts and their component elements and explores the underlying requirements of the key international financial reporting standards for the elements selected for examination, including alternative approaches to revenue recognition and capital maintenance.

The module also considers how good corporate governance provisions are demonstrated in the accounts, including the impact of the City Code, and the contribution that internal and external audit makes to the overall audit and assurance framework, and also the social and professional aspects of ethical behavior as they apply to accountants.

Finally the module will consider current developments in international financial reporting including variations in different international jurisdictions and moves towards harmonization of international standards.

The conceptual and regulatory framework; harmonisation of international accounting standards and convergence programme. Modern accounting in its historical context and the evolution of international financial reporting standards. The “anatomy” of published general purpose financial statements and the principal component elements. Evaluation of conceptual and technical issues involving business combinations and consolidated accounts, associated companies, tangible and intangible assets and impairment issues, accounting for leases, principles of substance over form, provisions, contingent liabilities and contingent assets, inventories and construction contracts, outline of corporate taxation including deferred taxation, financial assets and liabilities, revenue recognition, reporting financial performance, continuing and discontinued operations, earnings per share, cash flow statements. Inflation and Current Value Accounting. Analysis of accounts and interpretive techniques. Creative accounting and the ethical framework. The significance of corporate governance principles and the reporting requirements in the published financial statements.

i. Knowledge and Understanding
By the end of the module, students should be able to:
a) Recognise the historical influences on the development of financial reporting in the UK and other economic areas;
b) Understand the significance and structures of the UK and international standard setting bodies;
c) Understand the significance of and evaluate the concepts contained in the Framework for the preparation and presentation of financial statements, and the evolution of financial reporting standards within the consistent principles and guidelines contained within it;
d) Analyse in some detail, information contained within a set of published financial statements and understand the underlying legal, regulatory and professional requirements which must be fulfilled in the compilation of the various elements of those statements;
e) Prepare detailed evaluations and in depth interpretations of corporate performance (group assignment);
f) Identify the conceptual arguments underlying the requirement to prepare consolidated financial statements for a group of corporations and in general terms, the mechanics of producing such statements;
g) Understand the significance of corporate governance principles to the disclosure requirements for published financial statements and the role of the external auditor within this framework;
h) Understand the general principles of taxation of corporations, including deferred taxation;
i) Identify and evaluate the implications of aspects of creative accounting, and assess them in the context of recent corporate reporting scandals;
j) Understand the concepts of capital maintenance from an accounting and economic perspective, standards relating to revenue recognition, and the difficulties of measurement in relation to inflationary conditions;
k) Recognise current developments in the process of harmonisation of international financial reporting standards;
l) Understand the ethical framework in which those involved in accounting corporate financial reporting are expected to operate and the various cultural and professional influences on such ethics.

ii. Skills
By the end of the module students should have developed skills in:
Application of numerical techniques: The use of a range of accounting models and techniques.
Communication and literacy: Group presentation (see below); personal study and research to strengthen understanding of concepts and principles covered in the module.
Problem Solving: Through discussion of conceptual arguments and accounting requirements to practical situations.
Working with others: In-depth research into the financial statements for financial statements for a selected entity leading to a group presentation.
Specific vocational skills: This module is vocationally specific in that it introduces students to a wide range of international and national Financial Reporting Standards (IFRS and FRS) that are used in an accounting based career.

Staff/student contact: approximately 20%
Student directed study: approximately 80%

The Library Catalogue contains full details of the current reading list for this module. Further details may also be found in the Module Guide.