2. nature and scope of management accounting Flashcards
1
Q
what is accounting? (3)
A
- the language of business
- developed from a capitalist thinking
- to record business transactions
2
Q
types of services around accounting (8)
A
➢ audit
➢ assurance
➢ taxation
➢ management consulting
➢ valuation
➢ market research
➢ actuarial
➢ corporate finance
3
Q
management accounting v financial accounting
A
see sticky note (slide 6)
4
Q
responsibilities of management accounting
A
- Determining the relevant information
- Collecting the information
- Communicating the information
- Incentives to achieve objectives
- Monitoring achievement of objectives and highlighting any cause for concern
5
Q
definition of management accounting
A
- techniques and processes that are intended to provide financial and non financial information to people
- within an organisation
- to make better decisions and thereby achieve organisational control and enhance organisational effectiveness
6
Q
> > - > - > - > - > - >
A
- planning
> formulate plans for different activities and
> coordinate these plans into budgets - controlling
> management accountants produce performance reports that compare actual outcomes with planned goals - organising
> management accountants develop accounting reporting systems that are closely related to organisational structure - communicating
> Management Accountants can aid the communication function by installing and
maintaining an effective communication and reporting system (e.g. the budget and
performance reporting process) - motivating
> The budgets and performance reports produced by Management Accountants have an
important influence on the motivation of managers and employees - decision making
> Providing guidance for decision making and problem-solving
7
Q
customer satisfaction and new management approaches (5)
A
- key success factors
- continuous improvement
- employee empowerment
- value chain analysis
- social responsibility and ethics
8
Q
- key success factors
A
- Quality: quality measures, Total Quality Management
- Cost efficiency: increased emphasis on accurate product costs and
cost management - Time: reduced cycle time and focus on “non-value-added” activities
- Innovation: responsiveness in meeting customer requirements
- Product comparisons
- Feedback on customer satisfaction
9
Q
- continuous improvement
A
- Static historical standards are no longer appropriate
- Benchmarking
10
Q
- employee empowerment
A
- Delegate more responsibility to people closest to operating processes
and customers
11
Q
- value chain analysis
A
- Suppliers, R&D, design, production, marketing, distribution, customer
service - Internal customer perspective
12
Q
- social responsibility and corporate ethics
A
- CSR
- Sustainable development
13
Q
cost accounting
A
- provides information for both management accounting and financial accounting
- measures and reports financial & non financial data that relates to the cost of acquiring or consuming resources by an organisation
- accounting concerned with cost accumulation for inventory valuation to meet the requirements of external reporting and internal profit measurement
14
Q
cost management
A
- describes activities of managers in short run and long run planning and control of costs
- includes continuous reduction of costs
- key part of general management strategies and their implementation
- accounting concerned with the provision of information to people within the organisation to aid decision making and improve the efficiency and effectiveness of existing operations
15
Q
benchmarking
A
❑ Identify an activity that needs to be improved.
❑ Find an organisation that is the most efficient at this
activity.
❑ Study its process and utilise that process.
