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Unit information: Financial Accounting in 2015/16

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Unit name Financial Accounting
Unit code EFIM20007
Credit points 20
Level of study I/5
Teaching block(s) Teaching Block 1 (weeks 1 - 12)
Unit director Mr. Ricky Tutin
Open unit status Not open

Fundamentals of Accounting and Finance 1 and Fundamentals of Accounting and Finance 2; or ACCG10052 Introduction to Accounting; or 60% in 25 Principles of Accounting (University of London External Diploma)



School/department School of Accounting and Finance
Faculty Faculty of Social Sciences and Law


This unit aims to equip participants with a good understanding of the principles and techniques of Financial Reporting, Income Concepts (Valuation) and Auditing, providing a useful and interesting foundation for future studies.

Intended learning outcomes

Financial Reporting

1. Explain, apply and evaluate the principles underpinning international financial reporting, including those described in the evolving International Accounting Standards Board's Conceptual Framework for Financial Reporting

2. For a selection of topics, explain and apply the requirements of international financial reporting standards (IASs and IFRSs) currently in force; explain and apply the requirements arising from proposed alternatives and/or improvements to those standards; evaluate current requirements and proposals for change

The topics are those which are prominent in the world of financial reporting at the time the unit operates and are likely to include: Leases; Provisions, Contingent Liabilities and Contingent Assets; Property, Plant and Equipment (including the impact of government grants and borrowing costs); Intangible assets; Impairment of assets; Group accounts

Income Concepts

  1. Recall the central definition of income according to J.R. Hicks;
  2. Derive and use appropriate formulae for the calculation of income as interest, income as capital maintenance, income as consumption maintenance and income as consumption maintenance in real terms;
  3. Define, calculate and explain windfalls and holding gains and losses;
  4. Explain and evaluate the proposals of the Joint International Group on Performance Reporting for presenting the performance of an entity
  5. Recall and explain alternative capital maintenance concepts;
  6. Explain and apply the principles and techniques of exit and entry value accounting to the preparation of financial statements;
  7. Explain and apply the principles and techniques of current cost accounting in real terms to the preparation of financial statements
  8. Explain and apply the principles and techniques of deprival and relief valuation to the preparation of financial statements;
  9. Explain and apply the principles and techniques of Current Purchasing Power accounting to the preparation of financial statements; and
  10. Compare, contrast and evaluate alternative valuation bases


  1. Explain what an audit is;
  2. Explain why external audits are performed;
  3. Recall who is eligible to audit;
  4. Recall the rules on the appointment, removal and resignation of auditors;
  5. Explain the purpose and content of an auditor’s report;
  6. Select and explain appropriate audit opinions for given scenarios;
  7. Recall the formula for calculating audit risk and explain its components;
  8. Understand and explain the audit tests on control and substantive procedures, and the concepts relating to obtain and evaluate audit evidence, such as analytical review and sampling.

Teaching details

20 hours lectures for whole cohort

10 hours of exercise lecture for groups of 50-60 students

10 one-hour tutorials for groups of no more than 15 students

Assessment Details


  • 100% on 3 hour written exam at the end of the relevant teaching block.


  • Tutorials: worked exercises
  • Exercise Lectures: worked exercises

All learning objectives are assessed by both summative and formative assessment

Reading and References

Alexander, Britton and Jorissen International Financial Reporting and Analysis

Iain Gray and Stuart Manson The Audit Process