Full time 1 Year(s)
This programme provides advanced study of accounting and financial management. It enables graduates of accounting and finance, as well as professionally qualified accountants, to take stock of what they have learnt, and helps them extend their academic training. You will gain the theoretical framework and skills needed to cope with the increasingly complex and global nature of the field.
Many MSc graduates have progressed to senior positions in the accounting profession and industry, including investment banking. Others are now faculty members in universities in the UK and throughout the world.
You will study a range of modules as part of your course, some examples of which are listed below.
Providing you with a strong foundation for understanding both the economics of financial markets and the main types of securities traded in these markets, this module focuses on bonds, futures, swaps and options. It strikes a balance between the theory and practice as well as making important links between models and the real world. The emphasis is on both principles and problem solving.
Topics covered include bonds, the economics of derivatives markets, futures and forwards, swaps, and options.
This module contributes to the following CFA syllabus areas:
Securities Markets (CFA level I)
Derivative Investments (CFA levels I and II)
Debt Investments (CFA levels I, II and III)
In this module you will cover the basic building-blocks of finance that are of primary concern to corporate managers, and look at all the considerations needed to make financial decisions, both inside and outside the firm. The time value of money is applied to value financial securities, and the module considers in depth the relationship between risk and return. The second part of the module introduces you to the theory and practice of financing and dividend decisions.
Through this module you will gain a good understanding of the following areas: valuation of financial securities, portfolio selection and diversification, capital asset pricing model, financing decisions and efficient capital markets, capital structure and valuation for the levered firm and dividend policy.
Corporate Finance (CFA levels I and II)
Portfolio Management (CFA levels I, II and III)
Basic Valuation Concepts (CFA level II)
This module is designed to give you a better understanding of how professional accountants, working in a variety of environments in various countries, have attempted to use aspects of accounting theory to resolve major reporting issues. It also furthers your understanding of how academics have conceptualised and explained accounting choices.
Topics covered include the regulatory environment of financial reporting, international harmonisation of accounting standards, and contemporary issues in financial accounting.
Financial Statement Analysis (CFA levels I and II)
This module provides a review of basic concepts from mathematics, namely calculus, matrix algebra and probability, that need to be understood by all students of accounting and finance. The emphasis is on helping you to understand these concepts and how to apply them to a wide variety of mathematical problems.
Functions of one variable, including exponential functions and logarithms
Rules of differentiation
Rules of integration
Functions of two or more variables
Partial differentiation and stationary points
Matrix algebra and simultaneous equations
Rules of probability
Conditional probability and Bayes's theorem
Discrete random variables, including the binomial and Poisson distributions
Continuous random variables, including the exponential and normal distributions
Expectation, variance and standard deviation
The normal approximation to the binomial distribution
This short module acts as a primer for the Foundations of Finance module. It starts by introducing you to finance and corporate governance, and then applies time value of money to value perpetuities and annuities. It also looks at the concepts of net present value and internal rate of return and builds on these to address capital-budgeting aspects of investment decisions. Although the module seeks to do this with a minimum of financial maths, to understand these topics properly you will need to invest some time in learning a few relevant formulae.
The objective of this module is to ensure that you have grounding in basic accounting concepts before progressing to the programme’s main assessed modules.
It provides an overview of the context within which financial reporting occurs, the main components of a set of financial statements, concepts commonly accepted as underlying the production of financial statements and an introduction to basic techniques for analysing financial statements and valuing businesses.
The aim of this module is to provide students with an introduction to basic concepts related to financial markets, including key categories of market participants as well as main types of securities traded in these markets.
Advanced Topics in Corporate Finance
Upon completion of this module you should:
Understand how executive compensation as one important element of a firm’s corporate governance structure helps to mitigate agency problems.
Know the main components of pay and how to evaluate them.
Understand the difference between CEO pay and CEO wealth.
Be familiar with different measures of CEO incentives.
Understand the main determinants of CEO incentive-compensation designs.
Understand the primary effects of executive incentives on firm performance and firm risk-taking.
Understanding the endogeneity problem and how it complicates disentangling the determinants from the effects of managerial incentives, and vice versa.
Be able to understand, synthesise and critique key research papers relating to executive compensation.
Possess a good working knowledge of the data resources, statistical methods, and computer software required to undertake empirical research.
Be able to use empirical data to calculate the executive pay, the structure of pay, executive wealth, and different executive incentive measures.
Be able to design and undertake large-sample empirical tests of determinants and effects of executive incentives.
Advanced Topics in Finance
Be familiar with the context for the use of accounting numbers in valuation;
Understand the difference between entity and equity valuation perspectives;
Understand the theory and rationale underlying the multiples-based valuation approach, including Price-Earnings models, Price-to-Book models, etc.;
Be familiar with the key practical issues involved in implementing multiples-based valuation models;
Be familiar with the theory and derivation of accounting flow-based valuation models including the Free Cash Flow Model, the Residual Income Valuation Model, and the Abnormal Earnings Growth Model;
Be familiar with the key practical issues involved in implementing accounting flow-based valuation models;
Be able to understand, synthesise and critique key theoretical and empirical research papers relating to accounting-based valuation;
Possess a good working knowledge of the data resources, statistical methods, and computer software required to undertake empirical research;
Be able to design and implement a small sample analysis of brokers’ reports;
Be able to design and undertake large-scale empirical tests that compare the performance of alternative valuation models.
Advanced Topics in Mathematical Finance
You will be given the opportunity to learn the most recent development in option pricing theory, namely option pricing under rank-dependent utility theory and option pricing under cumulative prospect theory). You will also learn the state of art techniques of extracting asset price distributions and risk preferences from option prices.
This option is for students who do not wish to undertake one of the standard dissertation topics, and are able to find an independent supervisor.
CFA Dissertation Stream (Accounting)
The first component is a critical review and synthesis of the literature on the use of accounting numbers in business valuation. The second component of the dissertation focuses on the implementation of valuation methods.
CFA Dissertation Stream (Finance)
The first component is a critical review and synthesis of the literature on factors predicting the cross-section of equity returns. The second component of the dissertation focuses on implementation of a quantitative equity portfolio management strategy in a practical, real-word setting.
This module builds on and extends the concepts covered in the core financial management module in the first term. The major topics covered include capital budgeting, capital structure, corporate valuation, corporate restructuring, merger and acquisitions, dividend policies, and application of real options in corporate finance. The analytical tools and financial theories discussed in the module are brought together through in an assessed report for which you work in groups to undertake comprehensive corporate finance analyses on a real company.
In lectures we will use cases based on real companies to demonstrate the links between the various areas of corporate finance. A key objective of the module is to help you explore how the financing and investment policies of firms interact with each other and how the decisions have implications for corporate valuation.
This module focuses on how financial theories are applied to investment management decisions. It will also critically analyse various portfolio management approaches used by professional investors in order to understand the strengths and weaknesses of these approaches.
Although not intended to track the Chartered Financial Analysts syllabus, the module should prove useful to those intending to take this qualification or looking to enter the investment management industry as a portfolio manager or security analyst.
This module contributes to the following CFA syllabus areas:
Modern portfolio theory and its applications
Capital asset pricing model
Arbitrage pricing theory and its applications
Style investing: momentum, value, and size investing
Portfolio performance evaluation
Portfolio management approaches, including practical aspects of security selection, risk management and portfolio construction
Mutual funds, exchange-traded funds (ETFs) and hedge funds
This module examines the financial accounting issues that arise – from both conceptual and technical angles – for complex business entities operating within the context of International Accounting Standards, US and UK GAAP. It also assesses the impact of accounting theory in understanding and suggesting solutions to major reporting issues and examines the importance of relevant academic research to this area.
After introducing you to the nature and environment of complex entities, the module focuses on the following areas:
Reporting financial performance: calculating earnings per share, defining income and comprehensive income, using reported income for analysis purposes
Owner’s equity: accounting for share-based payments, reporting changes in owner’s equity
Assets and liabilities: for example, intangible assets (including research and development), accounting for financial instruments, hedging
Accounting for groups: business combinations, goodwill, non-controlling interests, different types of strategic relationships (associates and joint ventures), foreign currency translation
Financial Statement Analysis (CFA levels I and II)
This module provides extensive coverage of methods used for valuing derivative securities in the investment banking industry, and includes an introduction to stochastic calculus.
Topics covered include:
Discrete-time vs. continuous-time finance
Stochastic calculus and Itô’s lemma
Investment in derivatives
Black and Scholes model
Interest rate derivatives
This module contributes to the following CFA syllabus areas:
In this module you will acquire the tools needed to analyse financial statement information, in particular for the purpose of valuing businesses. To give you practice in this, extensive use is made of cases during the class sessions.
After introducing you to fundamental analysis using financial statements, the module focuses on the form and content of financial statements, operating and financial activities in the reformulation of financial statements, and the analysis of profitability. We will also consider issues that arise in the forecasting of financial statements.
On valuation methods we will look at the use of comparables-based multiples and will also examine other methods used for valuation and accrual accounting, including dividend- and free-cash flow-based valuation, the residual earnings valuation model (REVM) and the abnormal earning growth valuation model (AEGM).
Equity Investments (CFA levels I and II)
This module gives you a framework for analysing the governance of organisations. It covers a selection of contemporary issues in corporate governance, using accompanying cases and readings. The teaching style is very interactive, so you will be expected to contribute to class discussions.
Topics covered include the goals of the firm and corporate governance theory, boards of directors, executive compensation, internal control and review, identifying, assessing and controlling risk, and financial reporting and external audit.
Designed to develop your understanding of the principles governing the valuation of fixed income securities and their derivatives, this module examines the main problems and selected issues relevant in the management of interest rate risk, and the organisations and structure of debt markets. Topics covered include debt securities and markets, the measurement of interest rate risk, and embedded options and interest rate derivatives.
This module explains how econometric methods can be used to learn about the future behaviour of the prices of financial assets by using the information in the history of asset prices and in the prices of derivative securities. It also gives you practical experience of analysing market prices.
It will help you to understand the important features of time series of market prices, appreciate the relevance of efficient market theory to predicting prices, and make you familiar with appropriate methods for forecasting price volatility. You will also learn how to use option prices to make statements about the distributions of future asset prices, gain experience of applying computational methods in Excel to stock market and currency prices, and develop your knowledge of a broad range of econometric methods that are applied in finance research.
Designed to develop your appreciation of the main approaches to measuring, analysing and reporting information to support management decisions, this module provides insights into planning, decision-making, performance evaluation and control. The decision-making part focuses on the techniques that enable a firm to find solutions for management accounting problems; the control part provides the insights and techniques that enable a firm to bring these solutions to fruition.
The module deals with techniques that facilitate planning and decision-making such as multi-stage cost allocation and activity-based costing. But it also deals with the effects of these techniques on managerial behaviour, and how to control these behavioural effects. The module is consistent with modern micro-economic theory, but any maths content is presented in an intuitive way. Since the module brings together management accounting and modern microeconomics it will be particularly valuable for those interested in pursuing a career in consulting.
This module looks at what can happen to the asset pricing in situations where market imperfections coincide with imperfections in investor rationality. It therefore explores the boundary between mispricing which can be exploited and that which cannot be exploited profitably.
The module lays foundations for arbitrage, investment and wealth management, investment banking, and corporate finance. The material covered is at the frontier of academic and industry research, forming a conceptually advanced body of knowledge (CFA level III) which is of relevance for theory, research and practice.
Topics covered include:
The efficient markets hypothesis and competing theories
Limits to arbitrage
Heuristics, biases and prospect theory: mental accounts and evidence in market prices
Myopic loss aversion, disposition effect and overtrading
Professional investors and analysts: over- and under-reaction
Bubbles: observational and experimental, rational and non-rational
Closed-end fund discounts, co-movement and sentiment
The equity premium puzzle and the volatility puzzle
Behavioural portfolio theory
This module examines how banking institutions generate earnings and the nature of risks assumed in their operations, and gives you the conceptual framework needed to analyse and comprehend the current problems confronting managers of commercial banks and other financial intermediaries. It is assumed that you already have a good understanding of the basic theoretical concepts of corporate finance, monetary theory and financial accounting.
After briefly revisiting the question of why financial intermediaries exist and the distinctive roles of depository institutions relative to non-depository institutions, we move to the main focus of the module: explaining the various types of risk that financial intermediaries are exposed to as well as the ways that they measure and manage risk. This includes an analysis of interest rate risk, credit risk (individual loan risk and portfolio risk), off-balance sheet risk, and liquidity risk. The risk management component includes liquid asset management and liability management, product and geographic diversification, and the use of loan sales and derivatives.
Other important aspects include prudential bank regulation such as minimum capital requirements (i.e., Basel I, II, and III), countercyclical loan loss provisions, deposit insurance and other explicit or implicit guarantees. All topics are discussed in relation to the recent financial crisis.
Note for non-accounting students:The specific study of the code of conduct for CFA can be replaced with self-studymaterials looking at the code of conduct for the Institute of Directors (IoD). The IFACcode is compulsory for all students as it represents one of the most advanced andinternationally accepted codes of conduct in existence for any profession, andtherefore acts as a useful exemplar for any student who needs to understand anyother codes, later in their professional life.
This module introduces you to the leading financial platforms used in the financial industry. In particular, it gives you a general understanding of the structure, type of data and functionality of the Bloomberg Professional platform.
The module has a strong practical component, as you will be using the Bloomberg Professional terminals in our Financial Markets Lab to extract, analyse and interpret data available within the platform in order to solve real-life financial problems. Through this, you will gain important insights into how financial platforms such as Bloomberg Professional are used for problem-solving within the industry.
Information contained on the website with respect to modules is correct at the time of publication, but changes may be necessary, for example as a result of student feedback, Professional Statutory and Regulatory Bodies' (PSRB) requirements, staff changes, and new research.
Undergraduate Degree: 2:1 (UK Hons) degree or equivalent in Finance, Accounting, Economics or other business-related subject. Graduates in non-business areas with strong quantitative elements may also be considered. It is recommended for your previous studies have covered the following modules: Maths, Finance, Accounting, Economics, Statistics, Quants, Calculus, Econometrics, Micro and Macro Economics, Physics, Linear Algebra.
The University will not increase the Tuition Fee you are charged during the course of an academic year.
If you are studying on a programme of more than one year's duration, the tuition fees for subsequent years
of your programme are likely to increase each year. The way in which continuing students' fee rates are
determined varies according to an individual's 'fee status' as set out on our fees webpages.
Studying at a UK University means that you need to pay an annual fee for your tuition,
which covers the costs associated with teaching, examinations, assessment and graduation.
The fee that you will be charged depends on whether you are considered to be a UK,
EU or overseas student.
Visiting students will be charged a pro-rata fee for periods of study less than a year.
Our annual tuition fee is set for a 12 month session,
which usually runs from October to September the following year.
Overseas fees, alongside all other sources of income, allow the University to maintain its abilities
across the range of activities and services. Each year the University's Finance Committee consider
recommendations for increases to fees proposed for all categories of student and this takes into
account a range of factors including projected cost inflation for the University, comparisons against
other high-quality institutions and external financial factors such as projected exchange rate
Lancaster University's priority is to support every student in making the most of their education.
Many of our students each year will be entitled to bursaries or scholarships to help with the cost of
fees and/or living expenses. You can find out more about financial support, studentships, and awards
for postgraduate study on our website.
Take five minutes to experience Lancaster's campus