A. Course
Objective
This course is designed as an
introduction to basic accounting concepts and simple mathematics of finance.
Prior exposure to these topics is not required. The concepts covered will
serve as the foundation for Public Financial Management in the curriculum.
B. Course
Organization
The first two days of this four-day
course are devoted to basic accounting concepts: the nature of accounting
as a field and its relation to public affairs; accounting vocabulary; and
accounting skills. The last two days deal with financial mathematics: indexing,
time value of money, and financial instruments . |
C. Reading
Material
There is no required textbook
for this course. The following reading materials will however be relevant:
Norvelle, Joan W.
Introduction to Fund Accounting. (5th Ed.) Tucson: Thoth,
Books, 1994.
Frank Budnick: Applied
Mathematics for Business, Economics, and the Social Sciences.
(4th Ed.) New York: McGraw Hill, 1994. Chapter
8: Mathematics of Finance.
This course will cover the first
four chapters of the Novelle text. This text is also used in some sections
of PFM and will be available at the bookstore at The University. |
D.
Scheduled Topics
- Session
1 August 10 Overview
of Accounting Concepts
- The first session will introduce
accounting as a language and mindset. We will present the evolution
of accounting as an information system; discuss the types of accounting
systems; introduce important accounting terms and vocabulary and practice
the use of basic concepts like debits, credits, simple T accounts, the
accounting equation, and double entry system.
- Session
2 August 11 Accounting
Practice and Policy Decisions
- This session will begin
with a presentation of evolving accounting tools, the standards setting
boards, and ethics. We will then demonstrate with an example how managers
actually "do accounting" today: with computer software. The
session will end with a discussion on how accounting is reported to
policymakers and what the limitations are of financial information.
- Session
3 August 12 Introduction
to Indexing and Time Valuation
- This session introduces
two topics that are fundamental to financial computations and decisions:
indexing and the time value of money. Within each topic we will discuss
the mathematics involved, and demonstrate with policy examples how the
concepts are applied in policy analysis.
- Session
4 August 15 Introduction
to Financial Instruments
- This session extends the
discussion of time value of money and introduces concepts surrounding
public debt. Bonds and debt management will be introduced. The skills
presented include project evaluation (net present value, cost benefit
analysis, internal rate of return) and bond structures.
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