Objectives

The course ‘Accounting Finance & Control’ (AFC) aims at providing theoretical frames and instruments to understand and manage “numbers” and “key information” for enterprises.

The course aims at enabling future engineers to:

• Understand which are the key accounting and financial information, i.e. those supporting (for profit) companies in the pursue of their fundamental objective (the maximization of enterprise value)
• Measure, analyze and manage enterprise performances and the contribution of its internal parts (responsibility centers).
• Analyze financial present and future (forecasted) financial needs, and assess alternatives to cover these needs (equity and debt).
• Be able to communicate and interact with company stakeholders through the communication of financial and non financial information (external accountability).

Program

• Introduction
• What is Enterprise Value
• How to Manage Enterprise Value
• Why to Manage Enterprise Value: A Multistakeholder Perspective.
• Consolidated Financial statements
• Accounting-Based Measures and benchmarking analysis
• Value Base indicators:
• Direct Measurement of Economic Value
• Financial Planning
• Forma and Techniques for Financing (Short-Term Financing, Long-Term Financing)
• Relative Valuation
• Value Based Proxies
• Value Drivers
• Nonfinancial Performance Indicators
• Nonfinancial Resource State Indicators
• Risk Drivers: Key Risk Indicators
• Scorecards
• The role of management accounting information in decision making
• Performance Management of  Organizational Units
• Measuring Performances at BU Level:
• Corporate costs allocation
• Transfer pricing
• Measuring Performances of Operational Centers
• Measuring Performance Beyond Organizational Boundaries: Supply Chain and Network Accounting

Bibliography

Main text book

Arnaboldi, A. Azzone, G. and Giorgino, M. (2014) “Performance Measurement and Management for Engineers” Elsevier. 

Further material

Anthony R. and Govindarajan V. (2006) “Management Control Systems” McGraw-Hill Higher Education.

Gavin Lawrie and Ian Cobbold “Development of the 3rd Generation Balanced Scorecard” 2GC Active Management

Kaplan R.S. and Norton D.P. (1993). “Putting the Balanced Scorecard to Work”, Harvard Business Review.

Simons, R. (1995) Control in an age of empowerment. Harvard Business Review (March-April): 80-88.

Initial requirements

The course requires student to have knowledge on:

• Basics of financial accounting
• Basics of cost accounting
• Basics of long term and short term decision making

To prepare for the course:

1. Open online course: Fundamentals of Financial and management Accounting

https://www.pok.polimi.it/courses/Polimi/FinAccount101/2014_T2/about

1. Book: Arnaboldi, A. Azzone, G. and Giorgino, M. (2014) “Performance Measurement and Management for Engineers” Elsevier.

Specifically:

• Chapter 7 (Short and long term decision making)
• Annex to the book freely available online:

o  eAnnexure 2: Financial Accounting

o  eAnnexure 3: Cost Accounting

Exam

The exam is articulated in two parts:

• Group work (30% of the final grade)
• Oral (70% of the final grade)

Passing all two tests is compulsory to pass the exam.

IMPORTANT

The group assignment will be valid for three Academic Years.