Accounting Curriculum
The accounting faculty teaches one MBA core course: Financial Accounting, a full-semester course that students take in their first semester. In addition, the accounting division offers a wide variety of elective courses in financial accounting and valuation, managerial accounting, and taxation for students in the MBA and EMBA programs. We also contribute to several highly rated Executive Education programs.
Course Listing
MBA/EMBA Core Courses
MBA/EMBA Elective Courses
Exec Ed Courses
PhD Courses
MBA/EMBA Core Courses
The core course, Accounting I: Financial Accounting covers the basic concepts and tools of accounting. Financial Accounting emphasizes the development and use of financial statements (e.g., annual or quarterly reports).
Accounting I - Financial Accounting (B6001)
Designed to develop an understanding of accounting principles for users of accounting information. The course looks at how users of financial information interpret accounting reports when making business decisions. The emphasis is on profitability concepts and performance evaluation. Coverage is not restricted to the existing U.S. model but includes a broad discussion of measurement issues and alternative country practices.
Financial Accounting Electives
Accounting for Value (B8022)
The answers to these questions require, first, an understanding of the integrity of the numbers that financial statements report and, second, an understanding of what a “clean” number tells us and what it does not tell us. The first question is the issue of so-called “earnings quality.” While we will be sensitive to the quality of the accounting in this course—and indeed develop some striking criticisms and make adjustments—our focus will largely be on the second, the issue of appreciating the value implications of accounting numbers. (There is a detailed course on earnings quality at Columbia Business School, Earnings Quality and Fundamental Analysis, B8008.)
Accounting numbers, used appropriately, are powerful aids to the value investor in understanding a business and the value in that business. However, they can be easily misused. A P/E ratio, for example, serves as an important input to a value investor, but the investor is in danger of being falsely cued if he or she does not appreciate what that ratio actually captures. A too-simple form of “value investing” trades on P/E and price-to-book (P/B) under the label, “Value versus Growth” investing, but the uninitiated is in danger of falling into the Value Trap. In this course you will understand the Value Trap and how to avoid it. More importantly, you will appreciate how a dedicated approach to value investing deals with accounting numbers to understand when price is different from value. Indeed, the course will show how to bring the appropriate (possibly adjusted) accounting numbers together to challenge the market price and thus avoid the greatest risk in investing, the risk of paying too much.
The course title is that of my book, Accounting for Value. This easy-read develops the themes and the course flushes them out. By the end of the course, you should have the answers to the following questions:
How do I understand the profitability of a business from the financial statements and what does that imply for the value of the business?
Apple Inc. trades at a forward P/E of 11.5. What does that tell me? Is the stock cheap or expensive?
Apple Inc. trades with a PEG ratio of 0.85. Is it cheap?
The value investor is wary of taking on leverage. How does leverage affect accounting numbers such as earnings and return on equity, and how can those levered numbers lead me astray?
The value investor is wary of buying growth, for growth is risky. How does the accounting tell me that prospective growth is risky?
What is the Value Trap? How can I avoid it?
Which accounting numbers do I have to be wary of?
How do I use accounting numbers to understand the growth expectations built into the market price?
How do I challenge the market price using accounting numbers?
Corporate Transactions and Financial Modelling (B8018)
The course draws on basic valuation concepts and financial statement analysis skills taught in your core classes. We advance them in various ways. First, we integrate institutional and process-related details into our study of corporate transactions. Second, we extend your accounting, taxation, valuation and regulatory knowledge to equip you for deal-specific analysis. Third, using Excel 2010 we develop full-blown M&A, LBO and bankruptcy models (with integrated B/S, I/S and CFS) to study the impact of different financing and transaction structures on the feasibility of deals.
Throughout the course, we use databases that are commonly used by practitioners and place special emphasis on real-world applications. For example, I provide you with your own FactSet Desktop license including Excel add-in and incorporate FactSet applications into the course. The course’s overarching goal is for you to obtain an advanced toolbox that helps to succeed in a position in IB, PE, consulting, investment management, corporate management or an entrepreneurial role that requires corporate transaction skills and knowledge.
For more information about this class, feel free to contact Anne Heinrichs at [email protected].
Earnings Quality and Fundamental Analysis (B8008)
Economics of Strategic Behavior (B7216-001)
The topics covered will be (1) the dynamics of entry and the impact of global competition, (2) the strategic imperatives of competitive markets, (3) sources of competitive advantage (local and global), (4) managing competitive interactions (cooperation and preemption), (5) bargaining situations, (6) the impact of information distribution and (7) financial implications of strategic economics. The course will consist of approximately one-third lectures and two-thirds cases. The emphasis in the course is on the ability to apply a small number of principles effectively and creatively, not the mastery of detailed aspects of the theory. For this reason the case discussion classes are particularly important.
Financial Statement Analysis and Valuation (B8009)
use financial statement analysis as an integral part of the strategic analysis of firms;
interpret financial statements, make judgments about earnings quality, and uncover hidden assets and liabilities;
apply financial statement analysis prospectively to forecast and value firms by applying modern accounting-based technologies.
The course has a very practical emphasis, with a wide variety of cases, in-class exercises, and a group project, all involving comprehensive analyses of publicly traded companies.
Financial Planning and Analysis (B8007)
Fundamental Analysis of Investment and Management Decisions: A Practical Guide (B8010)
We consider how to use financial reports and to supplement the accounting information to understand the company.
It will cover some topics/concepts that are in financial statement analysis, earnings quality, security analysis and valuation classes. But I have never received feedback that the coverage in this course is redundant irrespective of other courses taken. We will focus on understanding how businesses create/destroy value and how to change this, and discuss if this is in the price or not.
You draw on > 30 years of my experience: advising and analyzing companies, creating a new framework for analysis and investment, and as part of senior management at Morgan Stanley, plus as an academic researcher, auditor and participant in accounting regulation. My objective is to pass on as much of this knowledge to you as possible.
Value Investing in Credit Markets (B8012)
This course will rely heavily on case studies and guest speakers.
Value Investing with Legends (B8378-001)
Executive Education Courses
The accounting group is proud to contribute to the success of Columbia Executive Education, which offers top-rated nondegree programs for executives at all levels.
Our faculty members lead this popular Executive Education course:
Finance and Accounting for the Nonfinancial Executive
PhD Courses
The accounting division offers two PhD-level seminar courses. Both courses have a methodological focus as opposed to a topical focus: rather than offering a managerial accounting seminar and a financial accounting seminar, we offer an empirical seminar and a theory seminar, which cover both financial and managerial accounting research.
The Theory Seminar provides an introduction to research into accounting phenomena using analytical methods. The course covers research papers and follows the evolution of research ideas across different papers. The topics covered include contracting within the firm, accounting-based valuation and disclosure.
The Empirical Seminar introduces students to empirical research in both financial and managerial accounting. Students are exposed to a wide range of empirical research methodologies, including large sample archival research, small sample nonparametric methods, and field-based research. The topics covered include stock market valuation of financial information, positive accounting theory, equity valuation, contracting, corporate governance, and auditing.
In addition to the two seminars, our PhD students take required PhD-level courses in statistics, economics, and econometrics and elective courses in allied disciplines such as finance and economics.
The Masters of Science in Accounting and Fundamental Analysis
The Masters of Science in Accounting and Fundamental Analysis is a three semester master’s degree program offered by the Accounting Division of Columbia Business School. The Program provides academically distinguished and industry-oriented students the opportunity to obtain a rigorous, graduate level training in Accounting, Fundamental Analysis, Statistics, Finance, and Economics . Students take a carefully constructed curriculum of Doctoral and MBA courses offered at Columbia Business School. The program has some overlap with our PhD program, but is intended for students who prefer a shorter and more industry-oriented experience than the School’s Doctoral Program.
The goal of the program is to provide students with the quantitative and theoretical tools for a successful career in Investment advisory, equity and credit analysis, and consulting.
Candidates should have academic preparation equivalent to that of entering PhD students, and should be fully prepared to participate in PhD classes and to complete a substantial research project. Applicants who may also be considering MBA or PhD programs are encouraged to carefully review the academic differentials between the offerings to better understand the preparation for post-MS opportunities.