5411464: C20 Financial Statement Analysis

Beschreibung

The course aims to introduce students to the critical assessment of financial statements, such that they are able to understand managers’ motivation and capability to engage in earnings management. The assessment of firms’ accounting quality is essential for the reliability of cash-flow forecasts in the context of corporate finance and business valuation. Students will engage with current research in the area, and they will be able to understand the relevance of identifying managerial discretion in accounting choices for the analysis and valuation of companies. Students will work empirically with corporate finance data. This module prepares students for the modules «Alternative Investments» and «Corporate Finance».

Topics covered include (e.g.):

• The analysis of financial statements
• The decision-usefulness of accounting information
• Determinants and managerial motivations for earnings management
• Earnings smoothing
• Audit quality and audit fees
• Empirical research

Ziele

Students...

• Know about the analysis of financial statements
• Gather knowledge on the managerial leeway for the management of earnings
• Understand the quality spectrum of financial reports
• Learn about the role of the financial audit for accounting quality
• Are able to apply empirical methods based on financial statement information

Lehrmethoden

• Seminar, consisting of a presentation and a term paper.
• Moodle is used throughout the course to disseminate course material and for information and discussion

Literatur

• Robinson, Thomas R.; Henry, Elaine; Brouhaha, Michael A. (2020): International financial statement analysis. Fourth edition. Hoboken, New Jersey: Wiley
• Palepu, Krishna G.; Healy, Paul M.; Peek, Erik (2019): Business analysis and valuation. Fifth edition, IFRS standards edition. Andover, Hampshire, UK: Cengage Learning EMEA.