Introduction To Management Accounts - 10%

Question 1

What are the 4 global management accounting principles

Answer 1

Communication provides insight which is influential

Information is relevant

Impact on value is analysed

Stewardship builds trust

Question 2

What is management accounting used for ?

Answer 2

Internal reporting

Question 3

Management accounting is used for what 5 reasons ?

Answer 3

Financial implication
Drives business strategy
Used to control costs
Used for internal auditing purposes
Integrity

Question 4

Management accountants and IFAC

Answer 4

Fiduciary Controls
Analytical support
Risk management
Ethics

Question 5

Global management accounting principles

Answer 5

To drive better decisions about strategy and its execution at all levels

To help organisations plan for and source the information needed for creating strategy and tactics for execution

To stimulate different scenarios that demonstrate the cause and effect relationships between input and outcomes

To actively manage relationships and resources so that the financial and non- financial assets reputation and value of the organisation are protected

Question 6

Why do management accountants provide information ?

Answer 6

Planning
Decision making
Control

Question 7

What are the uses of management accounts

Answer 7

• inform strategic decisions & formulae business strategy
• plan long medium and short run operations
• determine capital structure
• Design reward strategies for executives and share holders
• inform operational decisions
• control operations and ensure the efficient use of resources
• measure & report financial and no financial performance to management & other stakeholders
• safe guard tangible and intangible assets
• Implement corporate governance procedures, risk management & internal controls

Question 8

users & characteristics of Strategic information

Answer 8

• Used by senior managers
• unstructured
  -qualative and quantative
• relevant to the long term
• highly summarised
• derived from internal and external sources

Question 9

Users & Characteristics of managerial information

Answer 9

• used by middle management
• routinely prepared
  -relevant to short & medium term
• summarised at a lower level
• primarily generated internally

Question 10

Users & characteristics of operational information

Answer 10

• used by front line managers
• detailed
• numerical
• relevant to the immediate term
• derived almost entirely from internal sources

Question 11

Management information users and characteristics

Answer 11

• Strategic, managerial & operational information is all management information
• given to people running an organisation
• helps them to make decisions
• classified as FINANCIAL and NON- FINANCIAL

Question 12

Management information should be :

Answer 12

• Timely
• Reliable
• Clear
• Relevant
• Complete
• Accurate

Question 13

What does management information assist with ?

Answer 13

• planning
• control
• decision making

Question 14

Who is IFAC

Answer 14

The internal federation of accountants

Question 15

Who is CIMA

Answer 15

Cima is a global accounting body which regulates its members in order to comply with best practice and to protect the public

Question 16

What is CIMA’S role ?

Answer 16

• uphold ethical and professional standards
• regulating activity by its members by;
  Codes of practice
  Disapline committee
  Continuing committee
  Continuing education scheme

Question 17

What are CIMAS 5 fundamental ethical principles

Answer 17

• Integrity
• Objectivity
• Professional compitance and due care
• Confidentiality
• Professional Behaviour
• it is the responsibility of each student & member to ensure they comply with CIMAS regulations.