PART 1:
Accounting Analysis
Introduction

• Basic accounting principles and concepts.
• Basic difference between financial and management accounting.
• Users of financial information and their requirements.
• Regulatory framework of accounting in Malawi.
• Preparation of financial statements.
• Interpretation of financial statements.

Specific Learning Outcome

The module is included to equip the learners on how to prepare the basic financial statements but also on how to interpret the financial statements. The learners need to know about the books of prime entries, posting to the ledger accounts and drafting the final sets of Accounts.

After completion of this part the participants will have an understanding of the basic accounting concepts, how to prepare and interpret the financial statements. The participants will also acquire knowledge on the regulatory framework of accounting in Malawi. They will have an appreciation of the role of accounting to the smooth and efficient operation of an enterprise.

Sessions to be Covered

This part has 6 units which will be covered in 16 sessions and will take 18hours. The summary of topics to be covered at each session is outlined below:

1. Basic Accounting Principles and Concepts
   • Definition of accounting.
   • Accounting concepts
   • Users of financial information and their information requirements
   • Qualitative characteristics of financial information.
2. Regulatory Framework of Accounting.
   • The function and role of Society of Accountants in Malawi. (SOCAM).
   • The International Accounting Standards Board. (IASB).
   • Harmonisation of Accounting regulatory.
3. Introduction to Financial Accounting and Management Accounting.
   • Similarities between financial and management accounting.
   • Differences in scope of work.
   • Importance of management accounting.
4. Double entry Accounting System
   • Preparation of ledger accounts.
   • Balancing up the books of accounts
   • Posting to trial balance.
5. Preparation of Final Accounts.
   • Preparation of Income Statement accounts.
   • Preparation of Balance Sheet.
   • Preparation of Cash flow Statement.
6. Forecasting Financial Information.
   • Business plan.
   • Cash budget.
7. Interpretation of Financial Statements.
   • Horizontal analysis techniques.
   • Ratio analysis techniques.
   • Non financial statement analysis.
   • Limitation of ratio analysis.