Accounting
Please note: Before scheduling classes, check with the department to determine the availability of courses for the upcoming semester or visit the Accounting website.
The Accounting major helps students acquire the skills to measure and communicate an organization’s economic activities.
Accounting is the formal system of collecting, organizing, and reporting the financial data used to make economic decisions. The data shed light on current financial status and liquidity, as well as past profitability and funds-generating capability. Its users include corporate shareholders, lenders, management, employees, research organizations, and taxing and regulatory agencies.
Many different types of economic decisions require accounting data. One major use of accounting data is to inform outsiders (interested people who do not have direct access to corporate records) of the firm’s economic status and progress. By contrast, the firm’s management requires data that will aid in controlling operations and evaluating performance. Outside agencies often collect accounting data for tax collection and other social and economic policy purposes.
The accounting major at the Wharton School focuses on the user of accounting data. Most courses in the department stress concepts, procedures and applications with a view to the student understanding how accounting information is generated and its reliability in analysis. Most accounting majors are preparing for careers in which accounting data are used extensively. The department’s flexible curriculum also allows interested students to take the required courses toward certification as a CPA (certified public accountant) or CMA (chartered management accountant). As the specific course requirements for these certificates vary from state to state and usually exceed the minimum requirements for a Wharton MBA major, students who seek professional certification should seek the advice of the Accounting Department adviser as early as possible to plan their programs.
Requirements for the Major:The specific courses that are required for an accounting major are designated by the department and cannot include the introductory core courses, ACCT 620/621 and ACCT 622.
Each accounting major is required to take one course in financial accounting (currently ACCT 742). In addition, a major is required to take three additional credit units from all of the graduate courses offered by the department. Courses taken to satisfy the accounting major cannot be taken on a pass/fail basis.
From time to time an individual student wishes to pursue a course of study that extends beyond the coursework offered by the department. In that case, the student will elect an independent study course. A maximum of one credit unit of independent study may be counted toward the accounting major, but only when both of the following conditions have been satisfied:
1. The student has obtained the agreement of an Accounting Department faculty member to supervise the independent study. 2. Written approval of the department Chair is received, indicating that the proposed project does represent: (1) a quantity and quality of work equivalent to a full semester in-class course, and (2) the subject matter is indeed advanced work not covered in regularly scheduled Accounting Department courses. 3. FNCE 728 cannot be presented for major credit in addition to an independent study. Summary Requirements for the Major:Note: Core courses ACCT 620/621 and ACCT 622 do not count toward the major, but are prerequisite to all other courses in the department.
- a) Required course:
- ACCT 742 Problems in Financial Reporting
- b) The equivalent of three credit units from the following:*
- ACCT 705 Tax Planning and Administration **
- ACCT 706 Advanced Managerial Accounting II (.5 cu)**
- ACCT 717 Federal Income Tax: Input on Business Decision Making
- ACCT 718 Auditing
- ACCT 730 International Accounting and Financial Reporting
- ACCT 743 Accounting for Mergers, Acquisitions, and Complex Financial Structures
- FNCE 896 Applied Financial Analysis and Equity Valuation
- ACCT 897 Taxes and Business Strategy
- FNCE 728 Corporate Valuation
- ACCT 706 Advanced Managerial Accounting II (.5 cu)**
MBA Advisor: Brian Bushee (telephone: 215.898.4872; email: bushee@wharton.upenn.edu)
ACCT 620 (1 cu)
Financial Accounting
Description: See description in Core section.
ACCT 621 (.5 cu)
Financial Accounting
Description: See description in Core section.
ACCT 622 (.5 cu)
Fundamentals of Managerial Accounting
Description: See description in Core section.
ACCT 705 (new in 2007-2008)
Tax Planning and Administration
Description: Presents an overview of the Federal tax raising system and its impact on the planning and conduct of business operations. Draws on the disciplines of business finance, public finance, and accounting as they relate to taxation.
Format: Midterm and final
Prerequisites: Accounting 620, 622
ACCT 706 (.5 cu)
Advanced Managerial Accounting
(not offered in 2007-2008)
Description:: ACCT 706 deals with two broad topics – cost analysis and performance evaluation. The first part of the course focuses on understanding the different kinds of costs incurred by firms, and the way that firms account for them. Included in this are discussions of inter-departmental allocations, joint costs and capacity costs, as well as extensions of activity-based analyses to service industries. The second part of the course analyzes the process of evaluating the performance of firms and their business units. Included in this are issues related to transfer prices, productivity measures, the estimation of cost functions using accounting data, and the study of benchmarking procedures. Finally, the course analyzes the optimal choice of performance metrics for compensation purposes, and analyzes the rationale behind the balanced scorecard.
Format: Lecture, case studies, participation, written group cases, and a final.
Prerequisite: ACCT 622 or equivalent.
Federal Income Tax: Input on Business Decision Making
(not offered in 2007-2008)
Description: The objective of this course is to introduce students to the broad, general concepts of federal income taxation with particular emphasis on individuals, partnerships, and corporations. Some attention is given to international and state and local taxes. Emphasis is placed on recognizing tax issues, general tax planning considerations. Concepts and topics covered include choice of entity, income recognition, deductions, and credits, capital gains and losses, forms of compensation, mergers and acquisitions, investment tax planning, and tax management.
Format: Lecture, discussion, and applications, short research paper and final examination.
Prerequisites: None.
ACCT 718
AuditingThis course includes a consideration of the role of the auditor, the organization of the accounting profession, and the current audit environment. It introduces the student to generally accepted auditing standards, professional ethics, and legal liability. A conceptual theory of auditing is discussed and practical examples of auditing techniques and work programs are used to illustrate the application of the theory. The course also covers the auditor’s reporting standards and uses case studies and professional journal articles as bases for discussion and analysis.
Prerequisite: ACCT 620/621 or equivalent.
ACCT 730 (.5 cu)
International Accounting and Financial Reporting
Description: Generally accepted accounting principles and reporting practices vary significantly throughout the world. The objectives of this course include: (1) broadening the student’s knowledge of how those principles and practices vary and how they are developed in the various countries; (2) analyzing how those differences impact upon financial statements and business decisions; and (3) gaining an understanding of certain especially important international financial reporting matters, such as (a) foreign currency translation and transaction concerns, (b) accounting for transactions designed to hedge exposure resulting from changes in currency values, and (c) inflation accounting. To probe the matter of comparative practices we will review several important areas including the accounting and reporting for: 1) consolidations; 2) leases; 3) foreign exchange gains or losses; 4) deferred income taxes; 5) inflation; and 6) pension costs.
Format: Lectures, cases, foreign annual report reviews, exercises and problems.
Prerequisites: ACCT 620/621 or equivalent.
ACCT 742
Problems in Financial Reporting
Description: This intensive one-semester course focuses on how to extract and interpret information in financial statements. The course adopts a user perspective of accounting by illustrating several specific accounting issues in a decision context.
Format: Discussions, lectures on advanced topics, problems and cases. Daily preparation of cases and reading assignments. Comprehensive final exam. Some instructors may choose to grade homework, class participation, and case write-ups.
Prerequisites: ACCT 620/621 or waiver. ACCT 620/621 must have been completed; it cannot be taken concurrently with ACCT 742.
ACCT 743
Accounting for Mergers, Acquisitions, and Complex Financial Structures
Description: This class studies how complex financial structures account for their activities. Primary emphasis is on the application of purchase accounting for mergers and acquisitions, the equity method for investments, and preparing and interpreting consolidated financial statements. Other topics covered include translations and remeasurements for nondomestic investments, and earnings per share calculations for complex financial structures. Tax considerations and acquisition strategies are of only peripheral interest in this class, and students who are concerned primarily with those topics are advised to seek a different elective.
Format: Lectures and quizzes, class participation, and satisfactory performance on quizzes.
Prerequisites: ACCT 620/621 or its equivalent.
ACCT 896x
Applied Financial Analysis and Equity Valuation
(not offered in 2007-2008)
Description: This course provides an applied approach to financial statement analysis. The focus of the course is on understanding fundamental valuation techniques that are used by investment and hedge fund managers. The principles of valuation and return forecasting will be applied to a setting of managing a simulated equity portfolio. The course synthesizes three key elements: (1) The role of the theory and technical skills taught in accounting and finance courses to fundamental equity valuation and investment; (2) Familiarity with real time data feeds and risk optimization software that are used by today’s investment professionals; and (3) The application of the first two elements above to the management of a simulated equity portfolio.
Format: Discussions, lectures on advanced topics, software applications exercises, cases, and class presentations will form part of the course as will in-class quiz and final semester presentations.
Prerequisites: ACCT 620/621 or waiver. ACCT 620/621 must have been completed; ACCT 742 is recommended.
FNCE 720 or equivalent is a co-requisite.
ACCT 897
Taxes and Business Strategy
Description: : The objective of this course is to develop a framework for understanding how taxes affect business decisions. Traditional finance and strategy courses 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 key themes of the framework – all parties, all taxes and all costs – are applied to decision contexts, such as investments, compensation, organizational form, regulated industries, financial instruments, tax-sheltered investments, mergers and acquisitions, multinational, and multistate. The ultimate goal is to provide a new approach to thinking about taxes (and all forms of government intervention) that will be valuable even as laws and governments change.
Format: Lecture and case discussions