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LBS: UNDERSTANDING CORPORATE FINANCIAL ACCOUNTING

Adesola Pitan Written by Adesola Pitan · 2 min read >

Corporate Financial Accounting (CFA) is a course that provides information on the role of accounting in in an organization. For people like me who run businesses but who do not have a finance or accounting background, this course is a ‘life saver’ as it provides an opportunity to develop the much-needed accounting literacy skills needed to better understand the financial position of our organizations. Personally, the knowledge from the course has helped me in having a better understanding and making meaning of the annual year-end statements typically mailed out by companies to their shareholders, investors and the general public. Like many shareholders, I have never been able to make sense of the tables and reports typically mailed out to us as shareholders, neither have I had the courage to seek for help from a financial expert. Unfortunately, the annual general meetings are restricted to majority shareholders, Board of Directors and top management of these companies, so there’s hardly any opportunity left to get detailed information about the business health of the company. This Corporate Financial Accounting course has therefore provided me with the basic skills to understand how the financial statements are prepared, upon what assumptions they are based as well as how to make sense of, interpret, apply and relate information from the nonfinancial statement disclosures such as footnotes and supplementary reports with the financial statements. Ultimately, this course has helped me to know how to use the organizations financial statements to make intelligent and sound business decisions as it relates to my continued investment in the organization.

To get to this point of understanding hasn’t been easy though. The lead instructor does his best to break the steps down to the basics as much as possible having realized that quite a number of his students don’t have a financial background. It was obvious right from the start that he was used to such a mix of students and with benefit of his many years of experience teaching the course, he was able to guide us all to a point of basic understanding of the concepts. He also encouraged us all to help one another, and this advise was literarily taken by many of my colleagues who had finance backgrounds. Contributions and explanations during the breakout sessions before and in-between classes gave many of us the opportunity to ask further questions and seek clarifications from our peers.

Then came the capstone project – an essential part of the course where the class was subdivided into groups with each group mandated to research, identify and compare and contrast the financial statements of two separate companies, using various parameters. Essentially, we were to present our findings as a group and the presenter could be any member of the group. After multiple meetings, calculations, analysis, arguments and counters, we prepared our final presentation and ensured that everyone got ready. As it turned out, I, a non-finance background member, was picked by the instructor to present for my group. Thankfully, our group was commended for a job well done, but it was all due to the unity of purpose and the relentless camaraderie of my colleagues who ensured that people like me without a finance background still got grounded with the basic understanding of the concepts taught in class.

The next step is to build on this knowledge and begin to apply it in my position as head of my organization.    

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