Chapter 2 Flashcards
(29 cards)
What is Strategic Management Accounting?
Focuses on both financial and non-financial information to support strategic decision-making. Emphasizes external factors and long-term performance.
How does Strategic Management Accounting differ from traditional management accounting?
It is more focused on external factors and long-term performance, while traditional management accounting is internally focused and short-term.
What are the three levels of performance in the Performance Hierarchy?
Corporate level, Strategic Business Unit (SBU) level, and Operational level.
What is the importance of aligning performance levels?
It ensures operational activities support strategic goals.
What are the types of control in Performance Management?
Strategic control, Tactical control, and Operational control.
What is feedback control?
It corrects past performance.
What is feedforward control?
It prevents problems in advance.
What is the impact of decentralization on management accounting?
It creates a need for divisional performance measures and makes transfer pricing key for inter-divisional transactions.
What are ESG factors?
They assess sustainability: environmental impact, social responsibility, governance.
What does the Triple Bottom Line measure?
Profit, People, Planet.
What is the difference between risk and uncertainty?
Risk has measurable probabilities, while uncertainty has unknown probabilities.
What tools are used to manage risk?
Sensitivity analysis, Scenario planning, Simulation models, Risk mapping.
What is the role of Performance Management Information Systems (PMIS)?
PMIS collects, processes, and reports data to support decisions and evaluation.
What are the internal sources of management information?
Financial records, production data, HR records.
What are the types of data analytics?
Descriptive analytics, Diagnostic analytics, Predictive analytics, Prescriptive analytics.
What systems improve data accuracy and accessibility?
ERP (Enterprise Resource Planning) and CRM (Customer Relationship Management).
What should management reports be?
Relevant, clear, timely, accurate, actionable, and tailored to user needs.
What does the Balanced Scorecard measure?
Financial, Customer, Internal processes, Learning & growth perspectives.
What are the methods of transfer pricing?
Market-based, cost-based, and negotiated.
What do non-financial performance indicators (NFIs) include?
Customer satisfaction, Product quality, On-time delivery, Employee turnover, Innovation rates.
What is Total Quality Management (TQM)?
It focuses on continuous improvement and zero defects.
What are the types of quality costs?
Prevention costs, Appraisal costs, Internal failure costs, External failure costs.
How does performance measurement relate to strategic HRM?
It links performance to HR metrics like satisfaction, retention, skills, and training effectiveness.
What can bad performance measurement systems cause?
Gaming, short-term focus, and demotivation.