1: MA & Its Environment I

Question 1

What is Management Accounting?

Answer 1

An internal job that supports internal decision making and has an external impact ; occurs in an organisation

Is not time specified

Doesn’t have to be made public

There is no legal standard

Question 2

What is an Organisation?

Answer 2

People working together to achieve a goal/objective

Examples; School, Retirement Homes, Hospital Maternity Unit etc

Question 3

Types of Organisations?

Answer 3

CATEGORISATIONS CAN BE OVERLAPPED

Generally; Service companies and Manufacturing companies

Legal Status; Corporation and Partnership

Purpose Wise; For-profits and Nonprofits

Question 4

3 Organisation Principles?

Answer 4

HIERARCHY = how an organisation is structured; different levels of management
Organisation structure = Tall or Flat

SPAN OF CONTROL = the number of subordinates directly reporting to a manager
Organisation structure = Wide or Narrow

CHAIN OF COMMAND = the number of different levels in the structure
Organisation structure = Long or Short

Question 5

Accountants view on Organisation?

Answer 5

Impacts their view of factors like costs (clear categories), budgets, etc.

Impacts how they measure performance

Impacts the view that there is no one best structure, and accounting system needs to take that into account

Whatever the accountant does, they need to be able to deal with accounting information and requirements to the accounting system within the confines of an organisation!