Management Accounting

LO’s tested:

LO1 Display and apply extensive detailed knowledge of methods of managing funds within a company.

LO3 Critically review the validity of arguments in support of theoretical models and investigate contradictory evidence.

LO5 Debate issues in finance and provide professional recommendations and advice in an appropriate format.
1. The topic of the assignment
During the first week of your class you shall learn several basic but quite fundamental concepts in finance. Later we shall use those concepts as building blocks to look at various theories and debated topics in finance. We start with a simple question – what it or should be the objective of a company?

This is a great question. The main text for this module generally does a good job guiding you towards mastering various topics in finance. Unfortunately, on the Corporate objective, in my opinion, it fails to show you where the academics and practitioners took the major debate. It still uses an old term CSR (Corporate and Social Responsibility) as a possible objective, describes it in a limited manner, i.e. being more charitable than something that can create value to shareholders and the society at large.

The topic you will research is called ESG, an acronym that stands for Environmental, Social and Governance. These are three factors that are considered in the process of responsible investing. The term ESG was coined in 2005. However, it has been becoming more of a mainstream language only in recent 6-7 years or so. It is gradually and certainly replacing CSR.

And as ESG enters the mainstream so are the attitude and thinking about a company objective changes. The old-school view is that maximisation of shareholder wealth is the ultimate objective of a company. The companies have to choose between shareholder value and CSR/ESG issues. Focusing on CSR is more of a philanthropic act.

The new thinking emerging among the investment community is that maximisation of the shareholder wealth and ESG can and should go hand in hand. Sounds like a nice idea only if we could apply it with ease. There are many practical issues that prevent ESG investing evaluation and performance management even though it is becoming truly mainstream.

2. Required
Your task is to investigate ESG investments and construct an argument in favour or against the view that ESG Investing will become inseparable from investment decisions and that companies will have to incorporate ESG requirements into the investment decisions and not view them as an option. Please complete these steps and show evidence of doing so in your write-up:

1. Please review the knowledge your class has already created during the first attempt of the assignment and posted on the BB. Show evidence by referencing this body of knowledge.
2. Research further the ideas they proposed individually by reviewing academic and practice based literature.
You can review a wide range of sources from academic literature (articles published in academic journals would be the most preferred choice) to anything published by professional organisations, think-tanks, news media specialised on finance and investing, blogs of prominent thinkers on the issue etc.

3. Write an essay style argument. Please use Harvard referencing to correctly reference the sources on both your research and review of the knowledge created by your peers.
This assignment counts for 40% of the total mark available for the module.

Assessment criteria

To obtain a good mark all parts of your assignment will need to set your discussion in a theoretical context and to demonstrate:

Content 80%

•a wide range of reading and research

•an understanding of differing views and opinions

•logical and relevant argument

Presentation and referencing 20%

•appropriate presentation and clarity of writing

• correct referencing
You should not exceed the presentation time and word-count limit for your deliverables allocated. Marks may be lost for exceeding the limit as excessive material may not be marked.
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When referring to material from books and articles, or when quoting directly, clear references must be made. Copying sentences and paragraphs from books, articles or any other source without identifying that source is plagiarism and subject to the sanctions set out in the university’s policy on plagiarism. The text in your report other than that from clearly referenced sources must be your own “self -generated” words.

Reports must be word-processed/

This is the assignment brief

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