"Accruals (the difference between earnings and cash flows) are one of the most useful accounting metrics for assessing the reliability and relevance of a company’s financial statements. This course would introduce the concept of accruals, discuss various measures of it, and how to interpret them and apply to equity investment decisions. Accruals are important in financial statement analysis because sources of earnings that are not reflected in cash flows may or may not be sustainable over time. Identifying when the accruals are probably unsustainable can allow investors to predict the future course of earnings and thus the future course of stock prices. Accruals are useful in identifying both buy and sell opportunities in the stock market. The course will consider both aggregate and disaggregate accruals measures with discussion of the differences in interpretation for, e.g. inventories, receivables, long-term investments, and deferred taxes. The underlying drivers of these various accruals will be examined such as earning management, income smoothing, and departures of accounting rules from economic reality. Identifying when these causes apply will allow investors to distinguish legitimate accruals that are sustainable from illegitimate accruals that will trigger earnings reversals in the future. Application will be made to the financial statements of several companies from around the world. Brief mention will be made of the challenges of dealing with differing countries with varying accounting rules (IFRS, US GAAP, etc.), presentation schemes (especially the cash flow statement varies a lot in different places), and currencies. At the end of the course, each student will be expected to choose a company and produce an analysis of its accruals and make a recommendation to buy or sell the shares based on the analysis."