Question details

Describe three types of information management accounting can provide
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Fiches

Fundamentals

Management Accounting

:

SESSION 1

:

Objective 1:

Describe three types of information management accounting can provide

-

Questions management accountants can help to answer

Scorecard questions (score keeping

):

“is the company doing

well or poorly

Attention

-

directing questions

: “

which areas require additional investigation?”

Problem solving questions: “Of the alternatives being considered which is the

best”

Objective 2: Explain how management accounting is involved in supporting man

agers

doing their job

-

Elements of the management process: PDAC

Planning:

cost volume analysis, budgeting...

Executing (DO

):

cost, sales...

Evaluating (Check)

:

product cost/profitably, performance reports...

Feedback (Act)

: reduce costs,

invest/d

isinvest...

-

Planni

ng process:

1.

Define the company’s mission and objectives

2.

Analyse the company’s position (SWOT analysis)

3.

Identify and assess strategic options

4.

Select strategic options and formulate long

-

term plans

5.

Break down long

-

term plans into short

-

terms plans (budge

t)

Objective 3: Discuss the role accountants play in the company’s value chain functions

-

Value Chain: the set of business functions or activities that add customer

usefulness to the products or services of an organisation

Research and development

è

Des

ign

è

Production

è

Marketing and sales

è

distribution

è

customer service (Déf page 3)

-

Managing the value chain: Senior management must decide which of these

functions enable the company to gain and maintain a competitive advantage

Management accounting

estimate the costs incurred, identify ways to reduce

costs, make cost

-

benefit

trade

-

offs

Objective 4: Explain the contemporary business environment and how it has influenced

management accounting

-

Major business trends: global competition, shift to the s

ervice sector...

 

 

 

-

Financial measures of success: sales growth, profit growth, dividend growth,

bond and credits ratings, cash flows and increase in stock price

-

Non financial measures of success: P17

Objective 5: Distinguish financial accounting from manage

rial accounting

-

Financial accounting is the measuring and reporting of accounting information for

external users

-

Managerial accounting is the measuring and reporting of accounting information

for the internal users of a business

-

Constraints

on accounti

ng systems:

Generally accepted accounting principles (GAAP)

Tax rules and regulations

Government regulations: Sarbanes

-

Oxley Act (2002), Loi de Sécurité

-

Differences between management and financial accounting

Issue

Mana Acc

Fin Acc

Primary account

ing

product

Internal reports

General Purpose

Financial Statements

Primary users

Manages at various

levels

Outside parties

What is included?

Defined by management

Determined by GAAP

Underlying basis of

information

Internal and external

transacti

ons, focus on

future

Based on historical

transactions with

external parties

Emphasis

Data must be relevant

Data must be reliable

and objective

Business unit

Segments of the

business

Company as a whole

Preparation

Depends on mana needs

Annually an

d quarterly

Verification

Internal audit

External audit

Objective 6: Describe the organisational structure and the roles and skills required of mana

accountants within the organisation

-

Role:

Ensuring accurate financial records

Preparing standardiz

ed reports

Analysing and interpreting accountant data

Providing decision support

SESSION 2: Introduction to budgeting

 

Available solutions