Economics of Accounting Information

1
Economics of Accounting Information
02

• Accountancy 503
• Fall 2006
• Professor Clifton Brown

2
Eli Lilly Co. An introduction
Who can briefly describe Eli Lilly?

• Its business model (i.e., how does it create
  value?)
• Its primary products customers
• Its critical business processes.

3
Annual reports
Why is it important that Eli Lilly, like other
publicly traded companies, publish annual reports
that contain financial statements?
4
Eli Lilly contracts
Identify contracts Lilly has entered that
utilizes accounting information to execute,
monitor, and/or control the contract.
Discuss how you think the contracting parties use
accounting information for one of these contracts.
5
Manager influence on reported information
What are some of the ways that managers can
influence reported information?
Select one of the contracts identified earlier
and indicate how Lilly managers might influence
the information the company reports about that
contract.
6
Quality of earnings
When financial analysts refer to earnings
quality, what do they mean?
What are some issues concerning Lillys quality
of earnings?
7
E-mailing assignments

• Attach the assignment as a Word document to the
  e-mail.
• The subject line of the e-mail should include
  your last name (first name if more than one last
  name in the class), course , and short name of
  the case
• Chen Jeff 503 Lilly A
• The title of the word document should be the SAME
  as the subject line of the e-mail.

8
Turn-in a case write-up
The following individuals should e-mail a
write-up of Eli Lilly A to the instructor no
later than 24-hours from now
Ates, Nuri Chen, Jeffrey Choi, Hong Joo Gundogan,
Gurol Jeong, Doo Hwan
Kuzu, Durmus Ali Lu, Hsieh-Yi Nurguzhina,
Madina Phitakburanapath, Krit Wright, Nathan W.