PAS 1919

Question 1

Communication provides insight that is influential

Answer 1

The objective of this principle is to drive decisions about an organization’s strategy and its execution at all hierarchical levels, through insightful communication.

Management accounting begins and ends with communication. It improves decision-making by communicating information at all stages of the process. Communication of information allows management accounting to cut across silos and facilitate integrated thinking. Through effective communication, the consequences of actions in one area of the business on another can be better understood, accepted or changed.

Question 2

Information is relevant

Answer 2

The objective of this management accounting principle is to help organizations plan for and source the information needed for creating strategy and monitoring tactics for execution.

This principle therefore involves the identi cation, collection, validation, preparation and storage of information. It requires the organization to achieve balance between:

a) past, present and forward looking information;
b) internal and external information; and
c) performance (including environmental and social issues) information.

Question 3

Impact on value is analysed

Answer 3

The objective of this principle is to simulate different scenarios and models that demonstrate the potential cause-and-effect relationships between inputs
and outcomes.

Question 4

Stewardship builds trust

Answer 4

The objective of this principle is to protect the nancial and non- nancial assets, reputation and value of
the organization through the active management of relationships and resources. The responsible planning and management of resources provides continuity and availability for future generations.