Management Accounting and Control AF617 Course Outline continued Wednesday, June 29 Topic: Using Financial Controls in the

presence of Uncontrollable Factors. Source: Text p. 533 In-class discussion; Case 1 Hoffman Discount Drugs Source: Text-p. 549 Assignment questions: 1. Evaluate the HDDI Store Management Bonus Plan. What if anything will you change. Explain. Homework Assignment: Write a brief answer to question 1. Case 2: Beifang Chuang Ye Vehicle Group Source: Text-p.573 Assignment Questions: 1. To what extent should Mr. Zhou compensate his employees, even though his company is losing money? Why? What factors did you take into consideration in making your judgment? Homework Assignment: Write a brief answer to question 1. Note: The take home individual case will be announced today on the website (probably available after class). This complete case write-up will need to be uploaded by midnight on Sunday, July 3. Monday, July 4 NO CLASS HOLIDAY

Wednesday, July 6 Topic: Corporate Governance and Board of Directors Source: Text Chapter 13 Case 1- Pacific Sunwear of California, Inc. Assignment Questions: 1. Evaluate the process that PacSun went through to comply with SOX, and particularly with Section 404. What that process as effective and efficient as it could have been? 2. Are the significant deficiencies that were identified in each of the two years of audit evidence of control system flaws or largely irrelevant technical violations? In other words, should the disclosure of these deficiencies have had a negative effect on PacSuns stock price? 3. PacSun executives seem convinced that the costs of complying with SOX are greater than the benefits to the company. Why did PacSun not benefit from the compliance process to the same extent as some other companies? Or were their compliance costs too high? Note: No homework question from this case but please read up about the Sarbanes Oxley Act of 2002 so you can understand the issues in this case. Case 2- Golden Parachutes Source: Text-p.620 Assignment questions: 1. Is the proposed severance package in the best interests of: a. The executives included in it? b. Database Technologies, Inc. (DTI) and its shareholders? c. A company that is acquiring DTI? 2. Should the compensation committee approve the severance agreement as is? Should some of the elements of the agreement be modify? Or should DTI not have a severance agreement? 3. Suppose that you, as Dennis Feingold, object strongly to at least some of the elements of the severance agreement but that the other two members of DTI compensation committee recommend adopting the agreement as it is written. Would it be worthwhile for you to voice your objections forcefully and, perhaps, to take the issue to the full board of directors? Or would you consider it adequate just to cast a negative vote when the issue comes up in the compensation committee? Homework: Give a brief answer to Question 2.

Monday, July 11 Topic 1: Controllers and Auditors Source: Text Chapter 14 Topic 2: Management control Related Ethical issues and Analysis Source: Text Chapter 15 In-class discussion: Case Don Russell: Experiences of a Controller CFO Source: Text: p.641 Assignment questions: 1. Was Don Russell a good controller for Cook and Spector, Inc.? Why or why not? 2. Does Don have the power to force ETI top management to make a correcting accounting entry? If not what should he do? If so, should he fore the entry to be made, and how large should it be? 3. Are earnings management practices such as took place at C&S and ETI smart? Are they ethical? Homework assignment: Write brief answer to question 1. Wednesday, July 13 Last Day of Class In-class Case Write-up Please be prompt, as the exam will begin promptly at 1:30 to allow the three hours needed for the write-up.