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Unformatted text preview: Department of Accountancy Decision Making for Accountancy UNIVERS ITY O F I LLINO IS AT URBANA-CHAMPAIGN ACCY 30 2 ( FALL 2 009 ): SE CTIO NS AE 8, AE9 , AND AEA . Instructor: Dr. Jae Yong (Jay) Shin (please feel free to call me Jay) Office: 4003 BIF Office phone: 244-5759 E-mail: [email protected] – I’m happy to address questions and concerns via e-mail; allow a one-business-day turnaround Office Hours: – Every Monday during Fall 2009 semester from 9:30am to 12:30pm – Other times by advance appointment Section Meetings All sections meet on Tuesdays & Thursdays as follows: Section AE8 12:00 - 1:50 pm 1025 BIF Section AE9 2:00 - 3:50 pm 1025 BIF Section AEA 4:00 - 5:50 pm 1025 BIF 1 COURSE OVERVIEW ACCY 302 develops an understanding of the link between organizational mission and governance structures and accounting’s role in coordinating, controlling and managing organizations. By the end of the course you should have gained an understanding of how accounting is influenced by and influences organizational mission, strategy, structure, and the resulting control systems. To help in the development of this understanding, we’ll discuss numerous examples of decision situations --- simple and complex, hypothetical and real. Part I of this course explores the influence of incentives on rational individuals’ decisions, and how the mission and design of the organization influences the performance evaluation and reward systems (hence, accounting) implemented within it. Using agency theory as our foundation, we explore what motivates individuals’ behavior and the conflicts this can create in an organizational context. We then examine how organizations and the accounting systems within them can be structured to reduce those conflicts and direct individuals towards actions that benefit the organization and the individuals themselves. This is known as the “decision-influencing role” of accounting information. In Part II, we assess how performance measurement and control systems and their content and format can affect decision making. We know from Part I that owners of the organization want managers within it to focus on increasing profitability and competitive advantage, so in Part II we examine ways that accounting helps managers evaluate decision alternatives with this focus in mind. This is known as the “decision-facilitating role” of accounting information. Based on the fundamental accounting equation (profits = revenues - costs), managers can work to increase profitability by increasing revenues and/or decreasing costs. Revenues can be increased through increases in sales volume, changes in prices on existing products/services, or the introduction of new products/services, and you learn lots about theories and strategies behind these options in operations management, marketing and economics....
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This note was uploaded on 08/30/2009 for the course ACCY 301 taught by Professor Keller during the Spring '08 term at University of Illinois at Urbana–Champaign.
- Spring '08