School of Management, Unit Catalogue 2007/08 |
MN50181 Financial statements, corporate governance and regulation |
| Credits: 6 |
| Level: Masters |
| Semester: 2 |
| Assessment: EX 100% |
| Requisites: |
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Aims: To set corporate governance best practice on internal control and reporting in the broader context of the 'regulatory state' and accountability through 'transparency'. To understand financial statements and their compilation.
Learning Outcomes: To acquire knowledge of the main theories of the regulatory state and the roles and accountabilities of the modern corporation, as well as their application in practice through government policies on external regulation, self-regulation of the corporate sector through the Combined Code of Practice, and the setting of accounting and reporting standards in an international trading environment. To apply the principles of financial accounting, accruals and the double-entry method to the preparation of financial statements, including profit and loss account, balance sheet and cash flow statement. Skills: Preparing financial statements. Discussing key issues and applying generic models to particular cases. Content: The Regulatory State - the Corporation in Context * Market and non-market conduct failures * The principles of good regulation * Regulatory accountability * The role of the corporation - profit maximisation and corporate social responsibility (CSR) in context * Ownership and control: - the principal-agent model; the stakeholder model; regulated public service industries; public ownership/agency model. Controlling the Corporation * Reconciling 'conformance' and 'performance' * Shareholder roles: - AGM empowerment; exit strategy and take-overs; 'aligned' remuneration; external audit: controlling conflicts of interest * Corporate governance: the directors' roles: - codes of practice, Hampel, Turnbull, Higgs and Smith; structuring the board for 'internal control'; 'independence' of non-executives; internal audit and separating roles and responsibilities in organisations; ethics: learning cultures and whistle-blowing and note international comparators Transparency: regulating financial reporting - the rule-makers and reporting standards - international harmonisation - the framework of principles, FRS3, accounting policies and the Operating and Financial Review (OFR) - key concepts in practice (substance over form, capitalisation of leases, provisions for deferred liabilities, eg, tax); modified historical cost (statement of total gains and losses), goodwill and intangibles. |