AU kursuskatalog arkiv

4325: Accounting for Decision and Control ( efterår 2010 - 10 ECTS )

Rammer for udbud

• Uddannelsessprog: engelsk
• Niveau:   COURSE LEVEL: Elective master's level course  
• Semester/kvarter:  SEMESTER FOR WHICH THE COURSE DESCRIPTION APPLIES: Fall 2010  
• Timer per uge:   NUMBER OF HOURS PER WEEK: 4 hours  
• Deltagerbegrænsning:   RESTRICTIONS ON ADMISSION: None  
• Undervisningssted: Århus
• Hovedområde: Det Samfundsvidenskabelige Fakultet
• Udbud ID: 23354

Formål

LEARNING OBJECTIVES:

After following this course, students should be able to

• apply the fundamentals of decision making under uncertainty as it pertains to the decision-facilitating role of accounting
• formulate and apply relevant cost structures for decision making
• apply the fundamentals of risk sharing, incentives and control in decentralized decision making
• formulate and apply how different accounting systems (performance measures) can be used to reduce incentive risk and help coordinating responsibility centers.

Indhold

COURSE DESCRIPTION:

Accounting has two major roles: a decision-facilitating role, and a decision-influencing role. Effective management must identify the available alternative actions, predict the possible consequences of those actions, and then choose that action which has the most preferred outcome. Management accounting systems can be effective tools both in providing information that is useful in predicting the possible consequences of alternative actions and in structuring the description of those consequences - the decision-facilitating role. Managers may not make the choices most preferred by a firm's owners (or higher level managers). To mitigate this problem, the firm's owners (or higher level managers) frequently establish formal or informal incentive systems that are designed to motivate the manager to choose the actions which they prefer. Management accounting systems are often an important part of these incentive systems as the provider of measures of management performance - the decision-influencing role.

COURSE SUBJECT AREAS:

• 1. Fundamentals of decision making under uncertainty
• 2. Modeling cost behavior
• 3. Linear cost models for production planning
• 4. Risk sharing, incentives, and control
• 5. Reducing incentive risk - controllability principle, comparing outcomes to budgets and standards, and relative performance evaluation
• 6. Coordinating responsibility centers
• 7. Goal congruence

Faglige forudsætninger

REQUIRED COURSES (progression): 3354: Managerial and Cost Accounting

Underviser

LECTURER: Hans Frimor

Undervisnings- og arbejdsform

TEACHING METHOD: Lectures and discussion of cases

TEACHING LANGUAGE: English

Litteratur

LITERATURE:

Gerald A. Feltham, Sauder School of Business, UBC:

Teachingnotes:

The Relation Between Market Values and Accounting Numbers

Impact of Capital Cost Allowance on Decision Analysis

Decision Making under Uncertainty and the Impact of Decision-facilitating   Information

Economic Impact of Cost Model Specification Errors

Basic Cost/Production Activity Relations

Basic Resource Allocation Models

Sensitivity Analysis

Extensions to the Basic Resource Allocation Models

Multiple Period Production Planning

Wealth and Risk Sharing

Optimal Incentive Contracts

Decision-influencing Information

Cases and Solutions:

Albert's Gadgets (A and B)

Albert's Wizzers

Electoad

Albert's Machine Shop

Albert's Rules-of-Thumb

Cholesterol Producers (I - IV)

Katastrofik Kemikals

Albert's Chemical Plant

Albert's Phantom Stock Plan

Albert's Partnership

Marion's Pie Shop (A and B)

Ralph's Informativeness Criterion

Albert's Divisions

Investment Center Problems

Peter Ove Christensen:

Lecture notes and Case Solutions: A1 - A3; B1; C1 - C5; D1 - D3; E1 - E4; F1 - F2.

Demski, Joel S.:

Managerial Uses of Accounting Information, Kluwer Academic Publishers, 1994, Chapter 19-21.

Zimmerman, Jerold L.:

Accounting for Decision Making and Control, McGraw-Hill, latest edition, 2006, Chapters 4 - 5.

Christensen, P.O., G.A. Feltham and F. Sabac (2003): Dynamic incentives and responsibility accounting: a comment, Journal of Accounting and Economics , pp. 423-436.

Christensen, P.O., G.A. Feltham and M. Wu (2001): "Cost of Capital" in Residual Income for Performance Evaluation, The Accounting Review , pp. 1-23.

(approx. 800 pages)

Bedømmelse

• Mundtlig, bedømt efter 7-skala med intern censur
5 xxxxx

FORM OF ASSESSMENT: Oral examination, 20 min. preparation time

EXAMINATION AIDS ALLOWED: All - except any means of electronic communication including calculators, mobile phones and PCs.