Accounting addresses the measurement, aggregation, and evaluation of economic information useful for decision making. Because decision makers are outside the firm (e.g., shareholders, creditors, regulators) and inside the firm (e.g., managers, auditors, tax professionals), accounting is divided into more manageable areas of study. Auditing uses established methods of testing and confirming financial information prepared by managers and is conducted by an independent third party who attests to the reliability of financial reports that are to be disseminated outside the enterprise. Financial accounting is concerned with the needs of external users of firm-related, audited financial information, which is prepared and presented according to Generally Accepted Accounting Principles (GAAP) in the US or some other authoritative guidance with which the reporting entity must comply. Managerial accounting focuses on the needs of managers in their roles as decision makers, planners, and evaluators of business objectives, relying on internal, proprietary firm information. Tax accounting identifies tactical and strategic issues related to prudent financial planning and cuts across an enterprise’s operating and financial activities. Because accounting is the language of business, successful managers must be knowledgeable and discerning consumers of accounting information to understand and present their own business goals and performance and to evaluate and judge other entities from an independent perspective.
The course offerings in various programs are listed below.
The Duke MBA-Weekend Executive
The Duke MBA-Daytime
ACCOUNTG 590 – Financial Accounting
This course addresses the construction and interpretation of corporate financial reports. Our goal is not to train you to become an accountant. Rather, we want you to become an informed user of financial statement information. Because annual reports are somewhat formidable, we will spend time discussing how firms present the information for various accounts in the statements, including the footnotes. Specifically, we will focus on accounting for specific assets (e.g., Accounts Receivable, Inventories, Property, Plant and Equipment, Intangible Assets), liabilities (e.g., Bonds, Deferred Taxes) and owners’ equity on a firm’s balance sheet. We will also focus on how a firm’s performance is presented in the income statement through Net Income, and in particular, discuss how different revenue and expense recognition practices affect this performance measure. By the end of the course, you should have a basic understanding of financial statements and the ability to use them for decision making.
Fulfillment of these objectives involves acquiring several skills. We will emphasize i) gaining familiarity with the transactions firms engage in, ii) the mapping of transactions into accounting numbers, iii) understanding the choices that managers have in accounting for transactions and the rational behind the various methods, iv) developing fluency in accounting terminology, and v) appreciating the complexity of accounting due to discretion and judgment involved in choosing among alternative methods .
ACCOUNTG 591 – Managerial Accounting (SEE FAQ VIDEO HERE)
Managerial accounting is concerned with how to do the practice of operating a business using financial and, in some cases, non-financial information. Managers of business enterprises (including early-stage firms and start-ups) have to gather data, and convert that data to usable information, to apply basic concepts of profit-seeking. The data and its conversion to information come from the entity’s managerial accounting system. To illustrate: (i) microeconomics shows the constructs of marginal cost and marginal revenue; managerial accounting supplies the data to support these estimations at the individual-firm level. (ii) Marketing describes break-even as a construct; managerial accounting brings data to the construct. Managerial accounting also teaches how to monitor and assess performance toward agreed-upon goals and how to gather data and convert data to information that can be used to analyze trade-offs among goals as part of defining the entity’s strategy. Finally, the way an entrepreneur measures and evaluates employee performance would directly affect factors related to organizational culture; managerial accounting provides a framework for performance measurement and evaluation.
The course is loosely divided into two: cost management systems and managerial control systems. The objective of the cost management system is to provide information about the costs of the goods and services sold by the firm to aid managerial decision-making. The objective of the managerial control system is to facilitate performance measurement. We will describe widely used cost management and managerial control systems, better understand the reasons for using these systems, and identify how and when the misuse of these systems can lead to dysfunctional outcomes for the firm.
ACCOUNTG 592 – Detecting Earnings Management (SEE 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.
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. Prerequisite: Accounting 590.
ACCOUNTG 596 – Accounting for Mergers and Acquisitions
The principal objective of this course is to provide in-depth understanding of financial reporting issues related to business combinations, intercorporate investments, joint ventures, leveraged buyouts, and similar corporate restructurings. International accounting is also included. All of these transactions often have a major impact on financial statements, and understanding their economic substance and the ways they are reflected in corporate financial statements is essential to sophisticated financial statement analysis. Each topic is introduced by discussing the business environment producing the various transactions and related reporting issues. The key measurement and reporting issues are then examined, and their impact on the interpretation of financial statements is analyzed. This course builds on the corporate reporting concepts and methods studied in ACCOUNTG 590. It is helpful, though not necessary, to have completed ACCOUNTG 592 (or an equivalent course).
ACCOUNTG 597 – Financial Statement Analysis
Financial Statement Analysis (FSA) (ACCOUNTG 597) provides a broad framework for using financial statement analysis to evaluate a firm’s business operations and to predict its future condition. It is designed to achieve two main objectives. The first is to appreciate and understand the connections between firms’ operation strategies and their financial statements. This understanding then serves as the basis for the second objective, which is to develop a critical, user’s perspective to analyze and interpret financial statements to gain further insights into firms’ performance.
To achieve these objectives, important tools and skills are taught throughout the course with cases based on actual companies’ financial statements. Main topics include, but are not limited to, ratio and profitability analysis, analysis of the statement of cash flows, pro forma forecasting, (credit and governance) risk analysis and earnings quality analysis.
The course is targeted to a wide range of students, including those preparing for careers in general management as well as in investment banking, financial analysis and consulting. The material is designed for students with little or no background in security analysis.
The course assumes a solid understanding of financial accounting at the level of ACCOUNTG 590 and of financial management at the level of FINANCE 645. Students are also expected to be comfortable with working with Excel spreadsheets and with collecting data from various databases.
The course has little or no overlap with other accounting electives, specifically ACCOUNTG 592 (Detecting Earnings Management, formerly Corporate Financial Reporting) and ACCOUNTG 598 (Valuation). Students uncomfortable with core financial accounting concepts are highly recommended to take Corporate Financial Reporting (ACCOUNTG 592) before, or concurrent with, FSA. The topics covered in FSA are designed to precede, and to complement, those discussed in Valuation (ACCOUNTG 598).
ACCOUNTG 598 – Valuation and Fundamental Analysis
This course focuses on the valuation of equity securities using fundamental analysis. The course material augments and extends the basic material in Financial Statement Analysis (ACCOUNTG 597) to the specific and complex setting of valuing equity securities. The tools covered in this course consist of valuation models (i.e., discounted dividend, cash flow (weighted average and adjusted present value methods), abnormal earnings and economic profit) as well as multiples approaches. The course emphasizes the role of financial statement data in equity valuation, using advanced problems and cases developed around actual financial statements. In addition to viewing equity valuation from a fundamentals perspective, we will cover selected technical strategies, including momentum-based trading rules.
Overall, the course is intended to provide students with a strong theoretical and applied understanding of the key equity valuation and stock selection approaches used by securities analysts and investment/portfolio managers. The links between, and the limitations of, these approaches will be discussed, so that students gain an understanding of the issues governing the appropriateness of one or more methods in a particular setting.
The course assumes a basic understanding of introductory financial accounting and introductory corporate finance/investments. Although not required, some basic understanding of financial statement analysis (ACCOUNTG 597) is helpful. The topics covered in the class are intended to complement related elective courses in accounting (such as financial statement analysis) and in finance (such as corporate restructuring). Prerequisite: Accounting 590.
ACCOUNTG 601 – Taxation and Global Management Decisions (SEE FAQ VIDEO HERE)
Throughout the course, we will link the tax strategies that we learn with concepts from corporate finance, financial accounting, business law, and economics. We will make extensive use of real transactions to illustrate the impact of the tax structures on earnings and cash flows. Understanding how tax rules work and how they interact with other relevant factors places students at a distinct advantage in the marketplace. This course is particularly useful to those interested in a career in general management (e.g., executive in a large company, entrepreneur, or owner of a family business) or financial intermediation (e.g., financial analyst, venture capitalist, consultant, or investment banker).
Traditional finance and strategy courses often do not consider the role of taxes. Similarly, traditional tax courses often ignore the richness of the decision context in which tax factors operate. The objective of this course is to develop a framework for understanding how taxes affect business decisions.
Part of being financially savvy is having a basic understanding of how taxation affects business decisions that companies typically face: forming the business and raising capital, operating the business, compensating employees, financing new projects, expanding through acquisition, divesting lines of business, and expanding internationally. Taxes have a direct impact on cash flow and often divert 30% to 40% of a firm’s pretax cash flow to the government. Taxes are everywhere and are an essential part of the global business environment.
Although significant time will be dedicated to learning important tax “rules” this is NOT a rules-oriented class. Instead the course takes the perspective that taxes are one additional set of constraints which should be considered in global business decisions.
ACCOUNTG 894 – Business Sustainability Reporting & Analysis
This course aims to assist students in developing the skills to read, critically assess and use the information in business sustainability reports. The course includes an overview of the current sustainability reporting environment, with a focus on the major reporting frameworks, regulatory requirements in the European Union and elsewhere, and sustainability reporting standards, including issues related to faithful representation, verifiability and comparability. The main focus is on reading, understanding, and evaluating sustainability information; using sustainability information to assess corporate sustainability-related activities; using sustainability information both to make operating and investing decisions and as an input to incentive contracts and performance evaluation.
The Duke MBA-Global Executive
ACCOUNTG 590G – Financial Accounting
This course focuses on how economic events and transactions are communicated through the financial reporting process in both U.S. and non-U.S. jurisdictions. In this course, students will obtain a basic understanding of (1) the fundamental concepts that support financial reporting systems; (2) the role of judgements and estimates in the preparation and interpretation of financial reports; (3) how to read, analyze and interpret financial reports prepared in different countries; (4) the major differences across countries in financial reporting and some implications of those differences.
ACCOUNTG 591G – Managerial Accounting
This course emphasizes the use of accounting information for internal purposes as opposed to the external disclosure focus of the financial accounting course. The design of management accounting systems for planning and controlling operations, and for motivating personnel is covered. The course integrates accounting with ideas from microeconomics, data analysis, finance, and operations management.
ACCOUNTG 598E – Valuation and Fundamental Analysis
This course emphasizes the role of financial statement information in equity valuation, using cases developed from (real) financial statements. The course is intended to provide students with a strong theoretical and applied understanding of the equity valuation and stock selection approaches used by financial managers, investment professionals, securities analysts, and portfolio managers. The approaches covered include relative valuation (price-multiples) and discounted payment models (such as free cash flows and residual income). The course focuses on the implementation of these models using information reported in the financial statements and notes thereto.
The Duke MBA-Weekend Executive
ACCOUNTG 590W – Financial Accounting
Introduces the student to the types of information requirements imposed on the firm by agencies in its environment and develops an understanding of the activities of the firm within the framework of a financial accounting system designed to satisfy these information requirements. Emphasis is given to the study of financial accounting, reporting, and measurement problems from a theoretical and an applied basis, using cases and topical problems in financial accounting as a foundation for the learning experience.
ACCOUNTG 591W – Managerial Accounting
This course emphasizes the use of accounting information for internal purposes as opposed to the external disclosure focus of the financial accounting course. The design of management accounting systems for planning and controlling operations, and for motivating personnel is covered. The course integrates accounting with ideas from microeconomics, data analysis, finance, and operations management.
ACCOUNTG 598E – Valuation and Fundamental Analysis
This course emphasizes the role of financial statement information in equity valuation, using cases developed from (real) financial statements. The course is intended to provide students with a strong theoretical and applied understanding of the equity valuation and stock selection approaches used by financial managers, investment professionals, securities analysts, and portfolio managers. The approaches covered include relative valuation (price-multiples) and discounted payment models (such as free cash flows and residual income). The course focuses on the implementation of these models using information reported in the financial statements and notes thereto.
The Duke MMS (FOB and DKU)
ACCOUNTG 510F/K – Introduction to Financial Accounting
This course provides you with a basic understanding of the construction and interpretation of corporate financial reports which are used by external parties (including investors, creditors, and regulators). Our goal is to help you become informed user of financial statement information. Fulfillment of these objectives involves acquiring several skills: (i) gaining familiarity with business transactions; (ii) understanding how those transactions map into accounting numbers; (iii) developing fluency in accounting terminology; and (iv) appreciating the complexity of accounting due to the (considerable) discretion and judgment involved in implementing accounting rules. The course emphasizes the use of real financial statements, so that you become accustomed to the many variations that these reports take.
ACCOUNTG 511F/K – Cost and Managerial Accounting
Managerial accounting is concerned with the internal use of accounting information by managers to plan, control, and evaluate operations and personnel of the firm. The course covers two broad topics: (i) cost management systems and their use in decision making (these systems provide information about the costs of the goods and services sold by the firm, and decisions based on them include break-even analyses, pricing, and make/buy decisions); and (ii) management control systems and their use (control systems help the firm plan, execute, measure, and evaluate its operations). Topics covered include cost structures, costing systems, budgeting, variance analysis, performance measurement and evaluation, and transfer pricing.
ACCOUNTG 512F/K – Fundamentals of Financial Analysis
This course focuses on financial analysis of a firm and on valuation of its shares. The course provides a framework to analyze and interpret financial statements, exposes students to the publicly available sources of financial information used in capital markets, and develops important Excel modeling skills pertaining to financial planning, analysis, and valuation. The course builds on prior coursework (in financial accounting, strategy, managerial accounting, investments, and corporate finance) by having students: (i) evaluate the financial implications of a firm’s articulated strategy; (ii) use that information to project the firm’s financial statements several years into the future; and then (iii) apply various valuation techniques (such as free cash flow valuation and multiples approaches) to determine forecasted (target) prices of the firm’s shares.