Lecture 1 Flashcards
What is management accounting
Management accounting measures and reports financial and non financial information and helps and motivates managers to make good decisions to fulfil an organisations goals
Cost management
Cost management is short and long term planning and control of costs with the goal of cost reduction
Important part of company’s strategies
Cost accounting
Cost accounting measures and reports financial and non financial data that relates to the cost of acquiring or consuming resources by an organisation
Two roles of management accounting
Decision-facilitating
Decision - influencing
Decision facilitating (example) startups
36% of businesses fail within the first two years of operation
Management accountanta can play a vital role to bridge gap between strategy and financial controlb
scenario planning, strategic options and evidence bwsed decision making are among the areas where management accountants can provide expertise
Decision influencing (example) pa relationships
Controlling and coordinating actions: how to motivate (incentivise) employees to provide effort and make decisions in the interest of the principal
Selection: how to attract the employees that are most likely that they act in the interest of the principal?
History of management accounting
Farmers needed to have an overview over their inventory. Merchants needed to plan inventory, cash and travels.
But determining a number for profit was less important in Older times
Modern role of management accountant and controller
Planning - problem solving (outline, analyse, and evaluate)
Control - score keeping + attention directing
Emerging themes in strategic management accounting
Big data and social media
Digitisation
Environmental, ma, csr, sustainability
Automatisation and artificial intelligence
Knowledge management and intellectual capital
