Financial Accounting and Financial Statement Analysis

The course is offered in the first cycle and is included in the fourth semester of the Bachelor’s Programme in Business and Economics (S1EKA) for students majoring in financial economics. It is also offered as a freestanding course.

Department of Business Administration

Admission to the course requires knowledge equivalent to basic courses in economics(30 credits), business administration (30 credits) and statistics (15 credits), i.e. a total of 75 credits of which at least 60 credits must be completed.

The course focuses on theoretical aspects of the measurement issues that arise in financial statement preparation, including general structures and principles in financial accounting. In the accounting theory section, the aspects are covered from a preparer perspective. In the financial statement analysis section they are covered from a user perspective. In addition, the course covers issues that arise in the regulation of financial accounting, and in the audit of financial statements.

In the area of regulation, the course gives an overview of current regulation, why regulation exists and the costs and benefits of regulation. Various regulatory vehicles are discussed, as well as which specific rules Swedish and other companies currently must follow. The accounting theory section focuses on underlying principles and structures and how these principles are reflected in a number of current accounting standards. Financial statement analysis covers how users of financial statements are affected by firms’ accounting policy choices as well as how these choices are reflected in actual financial statements. Financial statement analysis also includes models for business valuation and how financial statements can be used in such models.

An area where accounting theory is reflected in specific standards, and that is in particular focus in the course, is group accounting. In this section of the course, students learn the principles and conceptual ideas behind different group accounting methods. There are also technical aspects, where students obtain insights into the preparation of consolidated financial statements.

The course includes elements that will strengthen students’ generic competences. Analytical skills are acquired in solving theoretical and practical assignments. Oral and written communication skills, as well as training in finding information, are acquired via the submission of written reports combined with oral presentations and discussions in seminar groups.

On successful completion of the course the student will be able to:

Knowledge and understanding

Describe how conceptual ideas are reflected in accounting regulation and specific standards, including in technical aspects of group accounting. Students should also be able to identify how standards and accounting policy choices are reflected in financial statements, asses their usefulness for financial statement analysis, and explain how financial statements are used in business valuation models. (Learning outcome 1)

Competence and skills

Use an annual report to assess how accounting quality affects the usefulness of financial statements for analysis, use financial statements in a business valuation model, and communicate findings in written and oral form. (Learning outcome 2)

Judgement and approach

Describe how financial reporting regulation is focused on business valuation, and how this focus is reflected in an annual report (Learning outcome 3).

Lectures and seminars.

Language of instruction: English

Learning outcome 1 is assessed through a written exam. Learning outcomes 2 and 3 are assessed through a group case study, reported in written and oral form.

In addition to the above compulsory examination elements, non-compulsory elements are present during the course, which gives the student the opportunity to prepare for the written examination. The non-compulsory elements consist of smaller written tests or similar assignments, which can give bonus points. The noncompulsory parts are only possible to participate in, and get points for, when the student is registered for the course.

Due to resource contraints, the case studies can only be performed and assessed within the course dates.

A student who does not participate in the compulsory oral presentations and discussions in seminar groups needs to complete a special make-up assignment within the prescribed time.

A student who has taken two exams in a course or part of a course without obtaining a pass grade is entitled to the nomination of another examiner. The student needs to contact the department for a new examiner, preferably in writing, and this should be approved by the department unless there are special reasons to the contrary (Chapter 6 Section 22 of the Higher Education Ordinance).

If a student has received a recommendation from the University of Gothenburg for special educational support, where it is compatible with the learning outcomes of the course and provided that no unreasonable resources are required, the examiner may decide to allow the student to sit an adjusted exam or alternative form of assessment.

In the event that a course has ceased or undergone major changes, students are to be guaranteed at least three examination sessions (including the ordinary examination session) over a period of at least one year, but no more than two years, after the course has ceased/been changed.

The grading scale comprises: Excellent (A), Very good (B), Good (C), Satisfactory (D), Sufficient (E) and Fail (F).

To obtain a passing course grade, students must receive a passing grade on the individual written examination and the case assignment including the seminar. The course grade is based on the examiner's overall assessment of the student's performance on all examination components. The non-mandatory components can only be credited within the scope of the course instance (regular examination and two re-take examinations).

Upon completion, the course will be evaluated in accordance with the rules for course evaluations established for the Programme in Business and Economics at the School of Business, Economics and Law. The results of and possible changes to the course will be shared with students who participated in the evaluation and students who are starting the course.