** TENTATIVE **
Organization of Topics
In this course, we study accounting information and management controls in decentralized organizations. Examples of management controls include variance reporting, responsibility accounting, bonus plans, capital budgeting procedures and internal audit practices.
Decentralized organizations are miniature economies wherein differentially informed individuals interact, perhaps in cooperation, perhaps in conflict. In some situations, specific members of the organization may benefit by sharing or concealing information- sometimes to the detriment of the organization as a whole. One example is the familiar managers vs. shareholder (agency) problem. The objective of this course is to use a coherent, organized approach to understand the costs and benefits to the organization of different types of managerial controls.
Our objective departs from the conventional one, which begins with traditional cost accounting concepts, laced with discussion of modern costing practices. The main focus often is on "how to." In this course, we instead build an operational framework that can help us to focus on "why." One advantage of establishing a general framework is it can provide guidance for dealing with an ever-changing environment.
Constructing this framework for analysis and discussion of management control in organizations will require a some rigor (and patience) on your part. We will build and analyze formal models of conflict and cooperation, the essential phenomena that give rise to management control issues. Analysis of these models will make use of optimization techniques (algebra, calculus, linear and nonlinear programming) and probability. Tolerance for abstraction and a willingness to work are highly recommended.Performance Evaluation
|Class Preparation and Participation||30%|
|Oral Case Presentations||50%|
|Take-home Final Examination||20%|
Class Preparation and Participation
Class preparation and participation is important. Preparation involves being ready to discuss the reading and written assignments. Obviously, in order to participate one must attend class. However, participation involves more than attendance . Our learning will be improved by active class discussions, and class will be a lot more fun for all of us if we are "on the same page." Questions or comments that improve the learning environment are always appreciated. To encourage these activities, perfect attendance only guarantees half of the Preparation and Participation credit. Active participation is required to obtain more than half of the credit for Preparation and Participation, and absences will reduce the credit received.
You will form teams that will make oral presentations to the class. Plan on 30 minutes to present. Team members should participate equally in organizing and presenting a case. You may use handouts or the whiteboard in your presentation, but neither power point nor overhead slides. Your presentation grade will be based on three components: (1) your understanding of the "larger" issues in the case, (2) your technical competence (taking into account the difficulty of the assignment) and (3) the coherence of your presentation (oral communication, board organization and quality of handouts). I will assign separate grades to each team member. You are welcome to discuss the assignments with me prior to class.
Take-Home Final Examinations
The final examination is an individual exam. It will consist of writing up one of the cases that were presented by another group in class and answering a few questions. This places a premium on attendance, preparation and careful note taking during the quarter. You may consult your notes and text, but not discuss the exam with any students or faculty.
Course Packet (distributed by instructor)