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Financial reporting.

Postgraduate (honours and masters in financial reporting).

Transnet is the utility company responsible for, inter alia, the operation, construction and management of South Africa's fuel pipeline infrastructure. The company is wholly owned by the South African Government and prepares its financial statements in compliance with International Financial Reporting Standards (IFRS). One of Transnet's capital projects involves the construction of an upgraded multi-fuel pipeline. The expected costs of construction ballooned from ZAR12.6 billion (approximately USD120 million) to ZAR24 billion (approximately USD240 million) over a five-year period. This has raised questions about the prudential management of the company's capital projects and the basis on which the government subsidises Transnet's capital costs. The significant increase in project costs also begs the question: how should the cost of the self-constructed pipeline be accounted for in Transnet's annual financial statements?

Describe and explain the qualitative characteristics of useful information in terms of the Conceptual Framework (2010) and summarise the framework's key principles. Evaluate these principles, drawing connections between them and the relevant academic theory (as per the prescribed readings), with specific reference to the accounting for self-constructed plant and equipment.

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CSS 1: Accounting and Finance

In the (A) case, Jason Phillips, Chief Financial Officer of a soup manufacturing business, is given the task of maximizing the value of the firm twelve months after the case is set. Although he does not want to break any legal rules, Jason is interested to see whether accounting and real action choices can be used to enhance the company's financial position and increase its perceived value to investors. The case permits him to select from a menu of options, including decisions on product pricing, inventory levels, accounts receivables, leasing or purchasing a new machine and valuation or sale of securities. These choices are fed into an Excel spreadsheet which adjusts financial projections and accounting disclosures accordingly.

In the (B) case, Ben Kerr, Chief Investment Officer at one of Dragon's main competitors, considers the financial statements produced by Dragon to unravel any earnings management behavior and establish a true value for the company. Although the case can be focused on the accounting consequences of real decisions, a richer discussion is obtained when considering the ethical angles of the decision process. In particular, how much “earnings management” should be pursued and what types of behaviors are simply going to be unraveled by investors?

Students will explore: the concepts of “legal” earnings management as compared to true value optimization; whether sophisticated investors misled by such behaviors; and the management of information flows to investors.

Undergraduate courses: Auditing, Leadership, Management accounting. Postgraduate courses: Leadership, Management accounting.

Auditing, Leadership, Management accounting

This case documents the journey of a professional accountancy organisation, namely, the Malaysian Institute of Accountants (MIA) and document the MIA’s journey on the establishment of digital blueprint for the accounting profession in Malaysia including some major milestone in innovating audit evidence-gathering technique by introducing e-confirm for auditing bank confirmation in Malaysia. This case highlights the significant role played by a lady chief executive officer (CEO) in embarking into the digitalisation of the accountancy profession and practice in Malaysia. While the ultimate objective of digital blueprint is to transform the accounting and auditing practices in Malaysia, the CEO has led by example by embedding digitalisation within MIA’s practices itself.

The learning outcome of this paper are as follows: to develop students’ understanding on the right attitudes, skills and characters that a successful leader should possess in contemporary business environment by focusing on dilemma and stereo-typing faced by women leaders; to develop the students’ understanding on the changes in business environment particularly the rise of digital technology that affecting the ways in which accounting functions in organisations; to encourage students to be aware that technical accounting knowledge is just one of the key success factors in the career of a professional accountant. The case offer insight into accountants’ role in digital environment and the development needed for accounting profession; to demonstrate how auditing process can benefit from the advancement in technology; and to encourage critical discussion on the development of accounting profession in Malaysia. The case aims to develop students’ critical discussion on the roles of MIA as a regulator of accounting profession and to appreciate historical development of accounting profession in Malaysia. The case also aims to encourage students to realise the existence of other professional accounting bodies, accounting practitioners and academic accountants, and together with MIA, they play significant role in shaping the accounting profession in Malaysia.

Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

The case has a strong implication on the role of effective leaders in ensuring that significant efforts involved in digitalisation journal, a vital need for the accountancy professional to continue to be a relevant profession, is a success.

CSS 1: Accounting and Finance.

Women leadership, Digitalisation, Professional accountancy organisation, Electronic bank confirmation, Malaysia

The Max-Value Stores case provides an opportunity for students to apply the understanding of various financial reporting topics (revenue recognition, liability de-recognition, accounting changes, and deferred taxes) to determine the applicable GAAP for recognizing gift card ‘breakage’, the estimated amount of gift cards that is unlikely to be redeemed. The case requires students to examine several technical and conceptual financial reporting issues in a real-world setting and helps to strengthen students? accounting research capabilities, understand implications of the choice of an accounting policy for performance measurement and financial statement analysis, and develop critical thinking and professional judgment skills.

In the (A) case, Jason Phillips, Chief Financial Officer of a soup manufacturing business, is given the task of maximizing the value of the firm twelve months after the case is set. Although he does not want to break any legal rules, Jason is interested to see whether accounting and real action choices can be used to enhance the company's financial position and increase its perceived value to investors. The case permits him to select from a menu of options, including decisions on product pricing, inventory levels, accounts receivables, leasing or purchasing a new machine and valuation or sale of securities. These choices are fed into an Excel spreadsheet which adjusts financial projections and accounting disclosures accordingly.

In the (B) case, Ben Kerr, Chief Investment Officer at one of Dragon's main competitors, considers the financial statements produced by Dragon to unravel any earnings management behavior and establish a true value for the company. Although the case can be focused on the accounting consequences of real decisions, a richer discussion is obtained when considering the ethical angles of the decision process. In particular, how much “earnings management” should be pursued and what types of behaviors are simply going to be unraveled by investors?

Students will explore: the concepts of “legal” earnings management as compared to true value optimization; whether sophisticated investors misled by such behaviors; and the management of information flows to investors.

International business, Accounting and Finance.

Undergraduate and Postgraduate levels (advanced financial accounting, international accounting, other accounting and business courses with an international setting.

The case uses the Asia Pulp & Paper Company’s (APP) entry into the international debt market to highlight the consequences of different business practices between the East (in this case, Indonesia) and the West. On the one hand, it shows that APP was set up as the “front” to access international debt capital; on the other, it reveals the naïvety of Western lenders who parted with their funds without conducting a thorough background research on the financial viability of the company they invested in. The APP debacle is a poignant reminder for market participants and business/accounting students that the divergence of the business settings across countries can make business contractual arrangements tenuous and corporate financial information irrelevant to its users. It also exposes the unique ways of how some Asian countries conduct their business affairs.

The following are the expected learning outcomes: comprehend the impact of differences in culture and ethnic origin on business practices; evaluate the impact of cultural nuances on the legality of contracts in the international business setting; understand the impact of currency fluctuation on the financial position of multinational firms; and be more cautious in conducting business and entering into contracts with foreign firms.

Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CCS 1: Accounting and Finance.

The teaching case is designed to be used by students in higher education institutions at the undergraduate level. This case may also be relevant for staff at the bursary departments of any public universities or public organizations that have biological assets.

This case provides a study on agricultural activity at Universiti Pengurusan Malaysia (UNIPM). The purpose of this case is to create greater awareness for case users on the accounting framework and on methods recommended for recording specific assets in agricultural activity, i.e., biological assets. This case provides users with experience in explaining the nature of an organization’s agricultural activities and accounting for biological assets as recommended in the Malaysian accounting framework. In addition, users are exposed to some current issues in accounting standards, such as ethical issues. In this case, Fakhrul, an accountant at UNIPM and a leader of the Asset Unit, was responsible for reporting the value of all UNIPM’s assets, including biological assets. He was instructed to accurately recognize, measure, and disclose the value of biological assets according to the appropriate accounting standard. Furthermore, UNIPM had been urged to replace the existing accounting standard of the Malaysian Private Entity Reporting Standard (MPERS) with the Malaysian Public Sector Accounting Standard (MPSAS). Fakhrul was considering how to account for and report biological assets according to the new MPSAS. This case is a decision making or ‘unfinished’ case which is suitable for financial accounting and reporting courses. The names of the people and the university are fictitious, but the details were based on actual events. A series of interviews were conducted with the key players to gather the data. Other useful documents such as the university’s annual report, university’s website and the deer reports were also referred.

The primary objective of this teaching case is to provide an opportunity for case users to understand both the accounting framework and the methods recommended for recording specific assets in agricultural activity. More specifically, the teaching objectives of this case are to achieve the following learning outcomes: to identify the relevant accounting standard for recognizing, measuring, reporting, and disclosing biological assets by public universities in Malaysia, to apply the appropriate accounting treatment in recognizing, measuring, reporting, and disclosing biological assets in accordance with the appropriate accounting standard for public universities in Malaysia and to understand the ethical issues involved in deer valuation methods.

Teaching notes are available for educators only.

CSS 1: Accounting and finance.

After reading and analyzing the case study, the students would be able to understand the critical role of the International Financial Reporting Standards (IFRS)-compliant accounting principles in facilitating strategic alliances between publicly traded international corporations and emerging companies in informal business environments, design the company’s accounting system to ensure the application of the accounting standards contained in IFRS and understand the accounting process for properly recording a company’s transactions.

This case study deals with Giulia’s decision to take on the proposal of a conglomerate to acquire a 45% stake in her travel agency, Know Cuba First Travel Agency (KCF). Giulia was an Italian entrepreneur based in Havana, Cuba. She has dealt with informal business practices in the Cuban tourism industry. However, Foreign Investments Ltd., a publicly listed company, needs formal accounting if investing in the venture. If Giulia agrees with the proposal, an accounting information system would have to be implemented to comply with the investor’s requirements.

This case study is suitable for financial accounting undergraduate courses.

Teaching notes are available for educators only.

CSS 1: Accounting and finance.

Auditing, accounting, finance, control.

Upper level undergraduate, MBA, MS accounting.

This case takes an internal approach by exploring how PricewaterhouseCoopers - Egypt develops and applies industry specialization in an emerging market such as Egypt. The case focuses on three aspects of specialization. First, the strategic drivers behind specialization. Second, the internal processes of building industry-specific knowledge. Finally, the costs and benefits of specialization.

Industry specialization is a strategy:

• Specialization is a strategy primarily used by Big 4 auditing firms, such as PwC-Egypt as a means of differentiating it self from the market.

Specialization is a strategy primarily used by Big 4 auditing firms, such as PwC-Egypt as a means of differentiating it self from the market.

Industry specialization is a culture:

• For specialization to be fully effective a learning culture should be in place in which firm personnel are committed to continually seek new in-depth knowledge about clients and their industries.

For specialization to be fully effective a learning culture should be in place in which firm personnel are committed to continually seek new in-depth knowledge about clients and their industries.

Human resources are the most valuable asset of auditing firms:

• Auditing is a service that involves extensive professional judgment. Thus, knowledge and expertise of its personnel is what differentiates one auditing firm's staff from another.

Auditing is a service that involves extensive professional judgment. Thus, knowledge and expertise of its personnel is what differentiates one auditing firm's staff from another.

Teaching notes.

This case attempts to study one of the key problems faced by a multinational organisation in the globalised environment that exists today: whether to outsource or insource. Outsourcing deals with getting into a contract with an outside vendor/supplier (local to the region in question) to deliver services to the parent company as per the agreed deliverables. On the other hand, insourcing deals with setting up operations in the destination country and hiring local staff on behalf of the company to do the same tasks.

Historically, outsourcing has been considered a better choice because of several benefits such as the ease of setting up operations, a predictable costing model and reduced capital investment. However, it comes with its own set of disadvantages as well, including a high attrition rate and a sub-standard level of quality in the deliverables. Apart from the quantifiable parameters, there are several qualitative parameters as well, which encompasses the employees' passion/commitment towards the company, sense of achievement and performance management process.

This case considers an existing situation in First Telecom (henceforth, referred as FT), where they have outsourced one part of their operations to multiple providers in India and are now facing huge issues with the quality of the deliverables; as a result, FT are now looking to explore if an insourced solution would be more cost-effective and productive. It evaluates the two models against various parameters and makes a recommendation on the preferred model.

This case can be used as a teaching tool in the following courses: MBA/postgraduate programme in strategic decision-making; MBA/postgraduate programme in management in management accounting and management control systems; and executive training programme for middle- and senior-level employees to look at the various factors involved (in addition to cost) that should be taken into account while comparing outsourcing versus insourcing.

FT is a communication service provider and has presence in more than 170 countries around the world. The company is considered among the top three telecom companies around the globe and offers solutions to multinational customers in the areas of networks, IP telephony, security services and other managed services.

The company has more than 100,000 employees around the globe. In addition to the regular (on rolls) employees, the company also outsources a lot of its operations in various countries to local service providers. The services that this company outsources include software/tools development, solution pricing and in-life service management. Historically, the company has believed that outsourcing is a better alternative because of the ease of setting up operations and lower cost.

However, because of the recent changes in the global market, there is a huge pressure within the company to reconsider all the functions and find ways to contain costs to help the company's bottom line.

There have been numerous complaints about the quality of output from one of the outsourced functions, namely, the “Pricing Team”, which is being presently outsourced to two service providers in India. The lack of accuracy has cost the company a key opportunity valued at more than USD5 million and the COO is furious at this loss. He has tasked the head of business improvement to do a full review of the function and look at the possible alternatives the company can explore to avoid these issues in future.

FT now wants to do a cost-comparison analysis of the existing set-up with a new insourced set-up considering all costs that would come into play. This would help FT to decide the future course of action to ensure reduced costs and enhanced operational efficiency from the process.

Understanding of cost-comparison parameters involved as an effective tool for strategy development and achieving organisational objectives; understanding of SWOT analysis (organisation level and decision level) and its applicability in the organisation context; understanding the Porter's five competitive forces model to illustrate the effect of environment on an organisation; and understanding of outsourcing and insourcing models and the pros and cons of each model, which is a key management decision in most multinational organisations.

Historical reports of the concerned unit in terms of the costs incurred, rate of attrition and operational efficiency achieved. Cost Accounting: A Managerial Emphasis, 14th ed., Charles T. Horngren, Srikant M. Datar and Madhav Rajan, Publisher: Prentice-Hall, 2012.Practical implications Based on the option (outsourcing versus insourcing) found to be better, appropriate actions would need to be taken in terms of either renewing the contracts with the outsourcing partners or preparing to terminate the existing contracts and hiring of talent from the market to replace the outsourced staff.

For nearly two decades, India as a country has grown considerably and one of the key contributors in that growth has been “Business Process Outsourcing” from all across the world to India. While the outsourcing wave has provided the initial push to the economy of India, it would not be able to help sustain the momentum primarily because of two reasons: the first is the growth of other countries, such as Hungary, the Philippines and China, as alternatives for outsourcing (and equally may be more cost-effective at times); and the second reason is the shift in various companies towards an insourcing model for critical functions.

Therefore, as a country, India needs to move ahead and, instead of only focusing on providing resources to do the tasks outsourced by global companies, focus should now shift to promoting innovation and creativity among the workforce. A lot of companies nowadays are realising the importance of product innovation and are investing huge amounts in R&D to come up with breakthrough technologies that can help them create a sustainable development model. However, this should in no way be considered an end of the outsourcing era. Although there needs to be an effort towards improving the interlock process, outsourcing is here to stay because of the benefits it brings.