Course description
Course Summary
This course produces graduates with a sound knowledge of both accounting standards and corporate governance, as well as their role in the operation of financial markets. The programme includes topics such as the theory of finance, company valuation, the assessment of corporate risk, international accounting standards, corporate governance and financial statement analysis. Subsequently, it provides a solid platform for a successful career in the financial sector.
All students will also be offered research training to prepare them for undertaking independent research and preparing a dissertation in an accounting and/or finance related topic.
Course Details
The programme includes topics such as the theory of finance, company valuation, the assessment of corporate risk, international accounting standards, corporate governance and financial statement analysis.
All students will also be offered research training to prepare them for undertaking independent research and preparing a dissertation in an accounting and/or finance related topic.
All students take a one-week introductory course in mathematics and statics.
Core Modules
Introduction to Quantitative Methods
Main topics of study: introduction to econometrics; further aspects of two variable relationships; the 'classical' regression model; OLS; specification; heteroscedasticity and GLS; dynamics, specification and error correction; logit and probit; predicting of acquisitions; company failure.
Financial Theory
Main topics of study: option pricing theory; capital structure and the cost ofcapital; dividend policy and mergers.
Company Valuation and Performance
Main topics of study: the annual report, the annual review, web pages; the changing reporting environment ASB discussion paper - year end financial reports: improving communication; the financial statements; other regulatory and voluntary elements of the annual report, including audit and corporate governance; techniques of analysis; prediction of corporate failure and ‘Z’ scores; techniques of communication and presentation: structural, narrative, visual; perpetuity and residual income models of valuation; earnings management; the predictive properties of accounting numbers;
the conservatism in accounting principles.
Accounting and Corporate Governance
Main topics of study: the variation in accounting standards across the major economies and their economic significance; accounting for intangibles;
accounting for financial instruments and directors' share options; accounting for comprehensive income; the Cadbury report, the Greenbury report, the Hampel report and the combined code on corporate governance; directors: independence, responsibilities, remuneration; internal control; audit: internal, external, audit committees; independence; shareholders; the role of institutional shareholders; metrics to measure corporate governance.
Dissertation
Elective Modules
Two from:
Security Investment Analysis
Main topics of study: valuation models; overall relevance of financial statements; relevance of specific information sets; investment strategies; securities analysis; portfolio management and institutional investors; capital market dynamics and information.
International Finance
Main topics of study: foreign exchange markets and currency derivatives; exchange rate determination in a floating exchange rates regime: theory and empirical evidence; exchange rate determination in a floating exchange rates regime: theory and empirical evidence; fixed exchange rates, target zones and speculative attacks: theory and empirical evidence.
Financial Engineering
Main topics of study: risk management with derivatives; introduction to derivatives; valuation of forward and futures contracts; interest rates, swaps; options; the binomial asset pricing model; the black-scholes model; conditional volatility models; value-at-risk and credit risk.
Money and Banking
Main topics of study: the nature and justification of banking; bank risks; banking regulation; applications of banking economics to derivatives and to international banking; consideration of standard and widely used models of money; application of these models to a variety of monetary questions e.g. inflation, hyperinflation, price surprises, central banking, payments systems, speculative attacks, banks and the government budget constraint; consideration of insight of models to real world episodes.
Development Finance
Main topics of study: finance-growth relationships; financial repression: concepts and issues; government deficit, money and inflation; bank-based versus stock market, based financial system: theory and empirical evidence, financial distress, financial crisis and contagion; stock market volatility: concept, measurement and its implication to economic growth.
Mathematical Finance
Exams are held in late April/early May each year. After successful completion of the taught component of the course, students can work on their dissertation, starting in early June to be submitted in September.
Recent examples of dissertations by students taking this course include:
* Volatility spillover effects from developed to emerging markets;
* Interrelationship between banking and currency crises;
* Pension funds - is there an alternative? Comparison with property investment.
