Page 32 - Business Studies 11-12 (2006)

FINANCIAL ACCOUNTING FUNDAMENTALS, GRADE 11, UNIVERSITY/COLLEGE PREPARATION (BAF3M) 31
Internal Control, Financial Analysis, and Decision Making
Overall Expectations
By the end of this course, students will:
• demonstrate an understanding of internal control procedures in the financial management of a business;
• evaluate the financial status of a business by analysing performance measures and financial statements;
• explain how accounting information is used in
Specific Expectations
Internal Control Procedures
By the end of this course, students will:
– describe the basic elements of an internal control system (e.g., separation of duties, prenumbered documents, rotation of staff);
– apply appropriate control measures used in accounting for assets (e.g., petty cash pro- cedures, bank reconciliation procedures);
decision making.
– analyse a company’s profitability by using simple financial ratios (e.g., gross profit percentage, return on equity) and other financial analysis tools (e.g., comparative statements, trend analysis, common size statements).
Decision Making
By the end of this course, students will:
– describe the role of budgeted financial – statements in planning, controlling, and evaluating business results (e.g., difference between budgeted and actual income statements);
describe how accounting information is used by company personnel (e.g., depart- ment managers, owners) in making deci- sions;
– describe the role and work of an auditor.
Financial Analysis
By the end of this course, students will:
– explain the importance of current assets and current liabilities when interpreting a balance sheet;
– analyse a company’s liquidity and solvency by using simple financial ratios (e.g., cur- rent ratio, debt ratio) and other financial analysis tools (e.g., comparative statements, trend analysis, common size statements);
– explain the role of financial analysis in decision making from the standpoint of potential investors (e.g., mutual fund man- agers, institutional investors, individual investors);
– describe how accounting information is used by individuals or organizations out- side the company (e.g., governments, Ontario Securities Commission, police, forensic accountants) in making decisions.