Quantitative Methods for Accounting

Catalog description

The objective of this course is to provide a foundation for critical thinking and decision making while introducing the student of accounting to some of the quantitative tools necessary for his/her profession. The foundations for critical thinking are developed by discussing the various activities typically employed in the decision-making process, particularly when dealing with complex situations containing uncertainties. All aspects of the modeling process are discussed. One vehicle for establishing this conceptual framework is the tools of decision trees and influence diagrams, since both facilitate, by visual means, an understanding of the complexities and interrelationships of the relevant factors of a decision problem. Subsequently, the student will be introduced to the statistical concepts of sampling in auditing, including attribute and variable sampling, different types of sampling schemes, accounting estimation, and auditing testing. Simple linear and multiple regression models for the estimation of cost functions are discussed in detail, including assumptions, model development and evaluation, and interpretation of output. The use of linear programming for the optimal allocation of scarce resources within an organization is discussed, and particular emphasis is placed on the economic interpretation of the linear programming output with regard to valuation, acquisition, and reallocation of scarce resources. Students are required to use the computer to solve and analyze regression and linear programming problems. Students who take OPR/STA 3300 may not receive credit for OPR 3450.