CHAPTER 1

Question 1

What is Management Accounting?

Answer 1

The process and techniques that focus on the effective and efficient use of organisational resources to support managers in their task of enhancing both customer value and shareholder value.

Question 2

Users of Information:

Answer 2

Internal -Managers and employees at all levels.

Question 3

Regulations

Answer 3

No Accounting Standards or external rules are imposed.

Information is generated to satisfy managers information needs.

Question 4

Source of data

Answer 4

Both financial and non-financial data drawn from many sources.
The core accounting system, physical and operational data from production systems and market.
Customer and economic data from sources external to the organisation.

Question 5

Nature of the information

Answer 5

Past, current and future oriented; subjective; relevant; timely; and supplied at various levels of detail to suit managers specific needs.

Question 6

Customer Value

Answer 6

The value that a customer places on particular features of a product or service.

Question 7

Shareholder value

Answer 7

The value that shareholders or owners place on a business.

Question 8

Planning

Answer 8

A broad concept that is concerned with formulating the direction for future operations.

Question 9

Control

Answer 9

putting mechanisms in place to ensure that operations proceed according to plan and that objectives are achieved.

Question 10

The fundamental principles of the code of ethics are?

Answer 10

• Integrity
• Objectivity
• Professional competence and due care
• Confidentiality
• Professional Behaviour

Question 11

Integrity

Answer 11

to be straightforward and honest in all professional and business relationships.

Question 12

Objectivity

Answer 12

to exercise professional or business judgement without being compromised by:

• Bias
• Conflict of interest
• undue influence of or undue reliance on, individuals, organisations, technology or other factors.

Question 13

Professional Competence and Due care

Answer 13

• Attain and maintain professional knowledge and skill at the level required to ensure that a client or employing organisation receives competent professional activities, based on current technical and professional standards and relevant laws and regulations and
• act diligently and in accordance with applicable technical and professional standards and relevant laws and regulations.

Question 14

Confidentiality

Answer 14

to respect the confientiality of information acquired as a result of professional and business relationships.

Question 15

Professional behaviour

Answer 15

to

• comply with relevant laws and regulations
• behave in a manner consistent with the professions responsibility to act in the public interest in all professional and business activities and relationships
• avoid any conduct that the member knows or should know might discredit the profession.