Module 1: The Nature and Purpose of Management Accounting Flashcards
(110 cards)
1
Q
What is the role of the management accounting function?
To provide _______________ to assist with ____________, ____________ and ________ ___________.
A
To provide information to assist with planning, control and decision making.
2
Q
Three attributes of management accounting information that were identified in 1950?
- Useful for _____________ to see how well the organisation is doing overall, and to ____________ ______________.
- Should be _________-____________ to indicate problem areas that need to be ____________.
- Should be ___________-__________ to provide a means of ______________ alternative responses to the situations in which the organisation finds itself.
A
- Useful for scorekeeping to see how well the organisation is doing overall, and to monitor performance.
- Should be attention-directing to indicate problem areas that need to be investigated.
- Should be problem-solving to provide a means of evaluating alternative responses to the situations in which the organisation finds itself.
3
Q
Management accounting information is used by managers for a number of purposes. What are they?
- To make _____________
- To _____ for the ____________
- To ________ performance of the __________.
- To measure _______ and put a value on ____________
- To implement ____________ and ___________ that focus heavily on __________ and __________ use of organisational __________ to support managers to __________ customer and ____________ value (IFAC 2002).
A
- To make decisions
- To plan for the future
- To monitor performance of the business
- To measure profits and put a value on inventory
- To implement processes and practices that focus on effective and efficient use of organisational resources to support managers to enhance customer and stakeholder value (IFAC 2002).
4
Q
Benefits of cross-functional teams include…
- Improved ___________ and ____________ of systems or activities
- __________ ____________ across traditional ____________ or _____________ boundaries
- Facilitate __________ and _______/_________ development
A
- Improved coordination and integration of systems or activities
- Problem solving across traditional functional or organisational boundaries
- Facilitate innovation and product/service development
5
Q
Management accountants have a key role to play in helping maximise the potential of a cross-functional team by:
- _________, ___________ and ___________ critical team information
- __________ establish goals and ____ priorities
- ___________ with ________ _________ and __________ __________, through the application of __________ _________ models and other techniques.
- Ensuring the team maintains an ___________-______ _____________.
A
- Providing, collecting and assessing critical team information
- Helping establish goals and set priorities
- Assisting with problem solving and decision making, through the application of decision-making models and other techniques
- Ensuring the team maintains an organisation-wide perspective
6
Q
What should the objective of the management accounting function depend on?
The information needs of ‘_________ __________’ - the __________ within an organisation who need information to help them ____ the _________.
A
The information needs of ‘internal customers’ - the managers within an organisation who need information to help them run the business.
7
Q
What should be the overall objective of the management accountant?
The provision of ________ _________ and __________ ___________ information
A
The provision of quality service and decision-making information
8
Q
Suitable performance measures of the management accounting function
- The _________ of information provided
- Value for ___________
- F_________
- ________ provided from _____ __________ surveys
- The ___________ ___________ service itself, including:
–______________ of reports
–____________ / ____________ at management meetings / forums.
– Management accounting involvement in __________ ___________
A
Measures relating to:
- The quality of information provided
- Value for money
- The availability of accounting staff
- Flexibility
- Ratings provided from user satisfaction surveys
- The management accounting service itself, including:
–Timeliness of reports
–Attendance / contribution at management meetings / forums
– Management accounting involvement in strategic projects
9
Q
What do Financial accounting systems do?
- They ensure that the _______ and __________ of a business are properly accounted for, and provide information about p_____ and h__________ ____________ _____________ to shareholders and to __________ stakeholders such as the _ _ _ and _ _ _ _ .
A
They ensure that the assets and liabilities of a business are properly accounted for, and provide information about profits and historical financial performance to shareholders and to external stakeholders such as the Australian Taxation Office (ATO) and Australian Securities and Investments Commission (ASIC); and other interested parties including interest groups, potential shareholders, unions and non-governmental organisations (NGOs).
10
Q
Cost accounting
- Part of _________ ______________
- Purpose is to determine the _____ of __________ and ___________
A
- Part of management accounting
- Purpose is to determine the cost of products and services
11
Q
Management information provides a common source from which information for two groups of people is drawn. What are they?
- ___________ accounts: Prepared for individuals ___________ to an organisation (eg. ___________, _____________, suppliers, r_________ authorities, ___________)
- _____________ accounts: Prepared for _________ use by _____________ of the organisation.
A
- Financial accounts: Prepared for individuals external to an organisation (eg. shareholders, customers, suppliers, regulatory authorities, employees).
- Management accounts: Prepared for internal use by managers of the organisation.
12
Q
Characteristics of Financial Accounts
- Detail the ___________ of an ____________ over a defined period, and the _______ of ________ at the end of that period.
- L_______ L_______ C_______ must, by law, prepare __________ ________
- Format of published __________ ______ is determined by _______ ___, by I_________ A__________ S________ and I__________ F___________ R________ S________.
- Concentrate on the business as a _________
- Mostly of a _________ _______
- H________ picture of _____ operations
A
performance; organisation; state; affairs;
- Limited Liability Companies; financial accounts;
- financial accounts; local law; International Accounting Standards; International Financial Reporting Standards.
whole;
monetary nature;
- Historic; past;
13
Q
Characteristics of Management Accounts
- Used to aid management ______, ____ and _______ the organisation’s __________ and to help the ________-______ process.
- There is no ______ requirement to prepare ____________ ________.
- Format of management accounts is entirely at management ________; no strict rules govern the way they are _________ or __________.
- Focus on _________ areas of an organisation’s ___________.
- Incorporate ___-_________ measures
- Both a h_________ record and a _______ _________ tool.
A
record, plan; control; activities;decision-making;
- legal; management accounts;
- discretion; prepared; presented;
- specific; activities;
- non-monetary;
- historical; future planning;
14
Q
What does cost accounting do?
- Provides ________ _______ for the ____________ accountant to use.
Cost accounting is concerned with:
- _____________ cost estimates of ____ and _________ products.
- ______ data collection.
- Measuring __________ costs including raw ___________, WIP and __________ goods, and the ______ and _____________ of products and ___________.
A
- Provides source data for the management accountant to use.
Cost accounting is concerned with:
- Preparing cost estimates of new and current products
- Cost data collection
- Measuring inventory costs including raw materials, WIP and finished goods, and the costs and profitability of products and services.
15
Q
What is Management Accounting concerned with?
____________ and ______________ of ___________, ____________ and _____________ data, and communicating it as _____________ to users.
A
Interpretation and assessment of financial, accounting and operational data, and communicating it as information to users.
16
Q
Cost accounting is used to measure:
- The _____ of ______ produced or ________ provided.
- The ______ of a department or _________ _____.
- The ________ earned from a _______, _________, ____________ or business unit, or the ____________ in total.
- The ____________ of a product, a service, a department, or the organisation in total.
- __________ ________ with some regard for the ______ of ______.
- The _______ of ____________ of goods (raw materials, WIP, finished goods) that are still held in store at the end of a period.
- _________ ______ of ______ and ________, based on given assumptions about what will happen in the future.
- How ______ _______ compare with _________ ______.
A
- The cost of goods produced or services provided
- The cost of a department or business unit
- The revenues earned from a product, service, department or business unit, or the organisation in total.
- The profitability of a product, a service, a department, or the organisation in total.
- Selling prices with some regard for the costs of sale
- The value of inventories of goods (raw materials, WIP, finished goods) that are still held in store at the end of a period.
- Future costs of goods and services, based on given assumptions about what will happen in the future.
- How actual costs compare with budgeted costs.
17
Q
Are there restrictions on cost accounting systems?
- No, cost accounting systems are ___ just ____________ to manufacturing __________.
- Service __________, government ___________, and non-_______ making organisations all make use of ____ accounting _____________.
- Within a manufacturing organisation, the _____ accounting systems should be applied not only to _____________ but also to ____________, selling and ____________, _____________ and development and all other ______________ and functions.
A
- No, cost accounting systems are not just restricted to manufacturing operations (although they are probably more fully developed in this area).
- Service industries, govt departments, and non-profit making organisations all make use of cost accounting information.
- Within a manufacturing organisation, the cost accounting system should be applied not only to manufacturing but also to administration, selling and distribution, research and development and all other departments and functions.
18
Q
What does Long-Term planning involve?
Long-Term Planning (_________ / ________ Planning) involves selecting ___________ ___________ to prepare a _____-______ plan to attain the ____________ _____________.
A
Long-Term Planning (Corporate / Strategic Planning) involves selecting appropriate strategies to prepare a long-term plan to attain the organisation’s objectives.
19
Q
What does Planning involve?
- Establishing the ________ ___________
- Selecting appropriate __________ to achieve those __________.
- Setting _________ for each __________
- Formulating ___________ ______ for achieving those ________.
A
- Establishing the overall objectives
- Selecting appropriate strategies to achieve those objectives
- Setting targets for each strategy
- Formulating detailed plans for achieving those targets
20
Q
Vision
A succinct statement of an organisation’s ________ ______________.
A
A succinct statement of an organisation’s future aspirations
21
Q
Mission
- Sets out an organisation’s ____________ _________.
- Includes reference to its _________, _________ of ____________ and ________.
- Sets the overall __________ of the organisation.
A
- Sets out an organisation’s fundamental purpose
- Includes reference to its strategy, standards of behaviour and values.
- Sets the overall direction of the organisation
22
Q
Objective
The ____ or ______ of an organisation.
A
The aim or goal of an organisation
23
Q
Strategy
A possible _______ of _______ that might enable an organisation to ________ it’s ___________.
A
A possible course of action that might enable an organisation to achieve it’s objectives
24
Q
Two main types of organisation
- ________ making
-___-______ making
A
- Profit making
- Non-profit making
25
Main objective of profit-making organisations is to?
- Maximise _____________ _________.
- Creating value for __________ and is achieved by ____________ profits.
Secondary objective:
- Growth (eg. increasing ______ and _____ of its goods/services)
- Maximise shareholder wealth
- Creating value for shareholders and is achieved by maximising profits
Secondary objective:
- Growth (eg. increasing output and sales of its goods/services).
26
Main objective of non-profit making organisations?
- To provide ______ and __________.
Secondary objective:
- To minimise the _____ involved in providing the _____/________.
- To provide goods and services
Secondary objective:
- To minimise the costs involved in providing the goods/services
27
Stated objectives of an organisation might include the following:
- Maximise _______
- Maximise __________
- Maximise __________ ______
- Increase ________ _______
- Minimise ______
- Maximise profits
- Maximise revenue
- Maximise shareholder value
- Increase market share
- Minimise costs
28
Does management accounting contribute to long-term strategic planning?
Yes
29
What does Long-Term planning involve?
- Selecting ____________ ____________ to attain the ___________ ___________, and
- integrating these strategies into an overall ____-_____ corporate or __________ business plan.
- Selecting appropriate strategies to attain the organisational objective, and
- integrating these strategies into an overall long-term corporate or strategic business plan
30
The time span covered by a long-term plan depends on what?
- The _____________
- The _________ in which it operates
- The particular _____________ involved
- The organisation
- The industry in which it operates
- The particular environment involved
31
Typical periods for a strategic business plan
- 2 yrs
- 5 yrs
- 7 yrs
- 10 yrs
32
Long-term strategic planning consists of four basic elements. What are they?
- Assess the _________ and its ______________
- Determine the ____________ o__________
- Devise __________ for achieving those ____________
- Create a ___________ plan
- Assess the organisation and its environment
- Determine the corporate objectives
- Devise strategies for achieving those objectives
- Create a corporate plan
33
For operational purposes, what is the corporate (strategic) plan converted into?
- A series of ______-______ plans, usually covering ____ year, which relate to _________ units, functions or _____________
- The _____________ ______________ function supports the ______-_____ planning process
- A series of short-term plans, usually covering one year, which relate to business units, functions or departments
- The management accounting function supports the short-term planning process
34
LONG-TERM STRATEGY PLANNING
1. Assessment Stage
- Assess the ________ ______________
- Assess the ______________
- Assess the _________
- Assess _____________
- Assess the external environment
- Assess the organisation
- Assess the future
- Assess expectations
35
LONG-TERM STRATEGY PLANNING
2. Objective stage
- Evaluate ___________ objectives
- Evaluate corporate objectives
36
LONG-TERM STRATEGY PLANNING
3. Evaluation stage
- Consider ___________ ways of achieving _____________
- Consider alternative ways of achieving objectives
37
LONG-TERM STRATEGY PLANNING
4. Corporate plan
- Agree on a ____________ plan
- Agree on a corporate plan
38
SHORT-TERM PLANNING
- P___________ planning
- R___________ planning
- P___________ planning
-R__________ & ______________ planning
- Production planning
- Resource planning
- Product planning
- Research & development planning
39
Two stages of the control process
1) The _________ performance of the organisation is compared with the ______ performance of the organisation on a _________ and _______________ basis.
2) The ____________ (strategic) plan is ___________ in light of the comparisons made and any changes in the parameters on which the plan was based, to _________ whether the ___________ of the plan can be achieved.
1) The planned performance of the organisation is compared with the actual performance of the organisation on a regular and continuous basis.
2) The corporate (strategic) plan is reviewed in light of the comparisons made and any changes in the parameters on which the plan was based (such as new competitors, government instructions and so on), to assess whether the objectives of the plan can be achieved.
40
Effective control is not practical without ____________
And _________ and ___________ are interrelated
planning
planning; control
41
An established organisation should have a system of......
- ________________ reporting that produces ________ information in a specified format at _________ intervals
- Management reporting that produces control information in a specified format at regular intervals.
42
___________, ____________ and ____________ all require decisions which require information
planning, implementation and control
43
A management control system is?
A system which __________ and ___________ the performance of activities of ___________.
A system which measures and corrects the performance of activities of subordinates.
44
"The raw material for data processing"
Data
45
"Information that has been processed so as to be meaningful to the recipient"
Information
46
Good information is:
- ___________
- ___________
- ___________
- ___________
complete, relevant, accurate, clear
47
Management Control System
a system that __________ and __________ the performance of activities of subordinates in order to make sure that the ____________ of the organisation are being met and the ________ devised to attain them are being carried out.
A system that measures and corrects the performance of activities of subordinates in order to make sure that the objectives of the organisation are being met and the plans devised to attain them are being carried out.
48
The basic elements of a management control system are:
- _____________ what to do and identifying desired results
- _____________ the plan which should incorporate standards of efficiency or targets
- _____________ the plan and measuring actual results achieved
- _______________ actual results against the plans
- ______________ the comparison, and deciding whether further action is necessary
- ______________ corrective action where necessary
- Planning
- Recording
- Carrying out
- Comparing
- Evaluating
- Implementing
49
Management accounting utilises two types of information. What are they?
- Financial information
- Non-financial information
50
Three levels of management activities according to Robert N Anthony (Management Control Systems, 1972):
- ___________ planning
- ___________ control
- ____________ control
- Strategic planning
- Management control
- Operational control
51
Information within an organisation can be analysed into three levels assumed in Anthony's hierarchy:
- S__________
- T__________
- O__________
strategic; tactical; operational
52
Features of Strategic Information:
- It is derived from both ________ and _________ sources.
- It is summarised at a ____ _______ and is directed at senior management.
- It is relevant to the _____ _______.
- It deals with the _______ ___________.
- It is often prepared on an __-___ basis.
- It is both __________ and _____________.
- It cannot provide ___________ certainty, given that the future cannot be predicted.
internal, external;
high level;
long term;
whole organisation;
ad-hoc;
quantitative, qualitative;
complete;
53
Tactical information is used by ________ management to decide how the __________ of the business should be employed (eg. short-term planning).
Such information includes:
- P__________ ________________
- B___________ __________
- V__________ ___________ __________
- C______ ______ ___________
middle;
resources;
productivity measurements;
budgetary control;
variance analysis reports;
cash flow forecasts;
54
Features of Tactical Information:
- It is primarily generated ___________
- It is summarised at a _____ _______ and is directed at ________ management as well as more ________ management
- It is relevant to the ______ and ________ _____
- It describes or analyses activities or _______________
- It is prepared routinely and ____________
- It is based largely on ______________ measures
- It allows the _____________ of business performance against goals.
internally;
lower level; middle; senior;
short; medium term;
departments;
regularly;
quantitative;
monitoring;
55
Operational information is used by '_____-_____' managers (eg. supervisors) to ensure that _________ ______ are planned and carried out properly.
Operational information may be required _______, ______, or second-by-second (in the case of automation).
front-line;
specific tasks;
daily; hourly;
56
Operational information has the following features:
- It is derived almost entirely from ________ sources
- It is ________ __________, being the processing of ____ data.
- It relates to the __________ term, and is prepared constantly, or very ____________.
- It is task-specific and largely ____________
internal;
highly detailed; raw;
immediate; frequently;
quantitative;
57
Information is sometimes referred to as _____________ _____
processed data
58
- Completed questionnaires from the public is a form of _____
- Processed questionnaires are analysed to prepare a report; this is ______________
data;
information;
59
Good information:
- Inspires ____________
- Is appropriately _____________
- Volume is _____________
- It is __________
confidence;
communicated;
manageable;
timely;
60
Qualities of good information:
- R__________
- C__________
- R___________: Means that it should be sufficiently __________ for its purpose.
- C________: Lack of _______ is one of the causes of a breakdown in __________.
- C_________
- C_____________
- V_________: Reports to management must be ________ and ________ and in many systems, control action works basically on the '___________' principle, with ________ only being produced if there is an issue that needs to be brought to management attention.
- T________
- C________ of c_______________
- C____
- C____________
relevance;
completeness;
reliability; accurate;
clarity; clarity; communication;
confidence;
communication;
volume; clear; concise; 'exception'; reports;
timing;
channel of communication;
cost;
comparability;
61
Information is important for management because it provides ___________ and ______________ of an issue.
By helping management to make _____-________ _________, information should contribute significantly to better-quality decision making.
awareness; understanding;
better-informed decisions;
62
Managers require a mixture of _________ and ___-__________ information
financial; non-financial;
63
The management of ABC Co. has decided to provide a cafeteria for their employees.
- The ________ ___________ required by management might include cafeteria ______ _______, costs of _________ ______, capital costs, costs of ___ and e_________ and so on.
- The ___-_________ ___________ might include comment on the effect on employee _________ of the provision of cafeteria facilities, details of the ________ of ______ served each day, meter readings for ___ and __________ and attendance records for cafeteria employees.
financial information; staff costs; subsidising meals; gas; electricity;
non-financial information; morale; number; meals; gas; electricity;
64
Management accounting is mainly concerned with the provision of __________ ____________ to aid __________, control and _________ _____________.
financial information; planning; decision making;
65
Non-financial information may relate to matters such as:
- q______
- s_____
- f________
- c________
- m__________
- c_________ s___________
- c__________ a___________
quality; speed; flexibility; creativity; motivation; customer satisfaction; competitive advantage;
66
An Information Security Management System (ISMS) is a set of procedures for __________ ___________ _____.
One of the main objectives of an ISMS is to ensure staff are fully aware of ___________ _________.
managing sensitive data;
information security;
67
SSBI stands for _____-_______ _________ __________. Business Intelligence software allows users without a statistical background to turn ___ _____ into usable _____________.
Self-Service Business Intelligence;
raw data; information;
68
Management accounting is a _____-________ process. It:
- Guides ___________ ______
- Motivates ___________
- Supports and creates the _________ _______ required to achieve the organisation's objectives.
value-added;
management action;
behaviour;
cultural values;
69
The management accountant helps create organisational value by:
- Providing relevant information for _________ and __________ ________
- Assisting ____________ in _________ and ________ activities
- Motivating managers and other employees towards ____________ _________.
- Measuring the _______________ of the activities of managers and other employees
- Assessing the organisation's ___________ position
planning; decision making;
management; direction; control;
organisational objectives;
performance;
competitive;
70
World-Class Manufacturing (WCM): Sets its objective as ___________ and ___________ competitive advantage in an environment of ___________ _____ reduction.
achieving; sustaining;
strategic cost;
71
Just-in-time (JIT) is a system whose ____________ is to __________ or __________ products or components as they are ___________ by a customer or for use, rather than for __________.
objective; produce; procure;
required; inventory;
72
A JIT system is a '____' system, which responds to _________;
In contrast to a '____' system, in which stocks act as _________ between the different elements of the _________, such as p_________, p___________ and s_______.
'pull'; demand
'push'; buffers; system;
purchasing; production; sales;
73
JIT production is a system which is driven by ________ for finished products whereby each component on a production line is produced _____ ____ _______ for the next stage.
demand; only when needed;
74
JIT purchasing is a system in which material purchases are contracted so that the ________ and _________ of material, to the maximum extent possible, _________.
receipt; usage; coincide;
75
Total Quality Management (TQM) is a culture of ____________ and ________, rather than a specific technique.
The culture is one of achieving _________ ___________, no matter how small each individual improvement may be, so that customer needs and expectations are met with __________ _________.
The approach has a _____ _______ ________ and operations should be 'right first time'.
management; operations;
continuous improvement; increasing success;
zero defects philosophy;
76
Kaizen is a Japanese term for ________ ___________ in all aspects of an entity's ____________ at every level.
Kaizen is a feature of _ _ _.
continuous improvement;
performance;
TQM;
77
Lean management accounting has a lot in common with the other techniques outlined. Its emphasis is on the __________ of _____ and ___________ ____________.
C_______ d_____ determines the flow of ________ and _________, and emphasis is on processes and value streams rather than _____________.
elimination; waste; continuous improvement;
Customer demand; products; services; departments;
78
In a lean system, management accounting systems need to be refocussed to provide the information necessary to drive improvement, and highlight _______.
Distortions such as reduced ____ _____ arising from producing large batches at a time need to be removed.
waste; unit costs;
79
Life cycle costing is based on the view that the ____ and ___________ of products should be planned and monitored over the ______ life ______ of the ________, from the design stage to the end of its commercial life.
costs; profitability;
entire; cycle; products
80
Life cycle costing ______ and accumulates actual _____ and revenues attributable to each product or project _____ the ______ ________/________ life cycle.
The total ____________ of any given product/project can therefore be determined.
tracks; costs; over; entire; product/project;
profitability;
81
Traditional approach to cost, price and profit is to:
- Develop a ________
- Determine the expected _______ p__________ _____ of that product and then set a _______ price with a resulting ______ or loss.
- Costs are _______ through variance analysis at _______ intervals.
product; standard production cost;
selling; profit;
controlled; monthly;
82
The target costing approach is to:
- Develop a p_______ __________ and the primary specifications for performance and ________
- Determine the ______ customers would be ________ to ___ for the __________
- The desired _______ ________ is then d_________ from the ________ leaving a figure that represents total cost.
product concept; design;
price; willing; pay; product;
profit margin; deducted; price;
83
Sustainability is about considering the ________ as well as the _________
future; present;
84
In relation to the development of the world's resources, ______________ has been defined as ensuring that development meets the _______ of the _________ without compromising the ability of ________ _____________ to meet their own needs.
sustainability;
needs; present;
future generations;
85
For organisations, _____________ involves developing _________ so that the organisation only uses resources at a rate that allows them to be ___________ (in order to ensure that they will continue to be available).
At the same time, emissions of _______ are confined to levels that do not _______ the capacity of the _____________ to absorb them (Brundtland report)
sustainability; strategies; replenished;
waste; exceed; environment;
86
The concept of ___________ should not be confused with ___________ ____________ and the __________ of natural resources, although for many industries there is a direct connection between these.
sustainability; environmental protection; scarcity;
87
Objectives of sustainability
Sustainability is about ensuring that an industry will be able to ___________ into the ____________ ________.
The following are 4 key objectives:
- Social _________ that meets the needs of ___________.
- Effective ___________ of the ______________
- Prudent use of ____________ ____________
- Maintenance of high and stable levels of ___________ ________ or employment.
continue; foreseeable future;
progress; everyone;
protection; environment;
natural resources;
economic growth;
88
What can management accountants produce to satisfy sustainability reporting requirements?
_______ and e____________ reports
social; environmental;
89
The role of the management accountant in sustainability accounting includes:
- Producing _______ reports of an organisation's _______ __________, energy use, and impact on the local _________ (sometimes called physical, environmental or social accounting).
- The use of such reports as part of an ____________ or _____________ management system.
- The reporting of such initiatives together with an organisation's _________ _________.
public; carbon emissions; economy;
environmental; sustainability;
financial accounts;
90
According to the International Federation of Accountants (IFAC), 'a sustainability or (environmental) management system can help an organisation:
- Define its ___________ _________, and ensure their alignment to _________ __________
- Identify ___________ challenges, risks, and opportunities; and
- Ensure that _____________ and operational practices respond to these challenges, risks and opportunities
sustainability objectives;
business objectives;
sustainability;
management;
91
The term 'sustainability reporting' refers to the concept of organisations reporting to stakeholders not only on their __________ performance, but also on their performance in relation to the ____________ and ________.
economic; environment; society;
92
The G_____ R_________ I_________ (GRI), founded in 1997, is an international not-for profit organisation.
It is the world-wide standard setter in ____________ __________, providing a framework for organisations to measure their:
- E_________
- E___________; and
- S_______ performance
Reporting on these three aspects of performance is sometimes called '________ ________ _____ __________'
Global Reporting Initiative;
sustainability reporting;
Economic;
Environmental;
Social;
'triple bottom line reporting'
93
E_________ performance concerns the organisation's impacts on the _________ conditions of its ___________ and on _________ systems at local, national, and global levels.
Economic; economic; stakeholders; economic;
94
E__________ performance concerns an organisation's impacts on ________ and ___-_________ natural systems, including ecosystems, land, air, and water.
Environmental;
living;
non-living;
95
Management accounting systems developed from ____ ____________ systems.
They are used for ___________, directing management _________ and _________ _________.
The key inputs of the system are:
- I______
-P_________
-O______
It used for:
- Strategic ________ _________
- Performance _____________
- Operational ________ and _________
cost accounting;
scorekeeping; attention; problem solving;
Inputs;
Processes;
Outputs;
decision making;
measurement;
control; costing;
96
A management accounting system can be defined by its _________ components:
- _______ with accounting ____________
- The ___________ they use
- Paper or computer ________ of __________ ___________
- The _____ ___________ system on which it is based
- The management accounting techniques that are used to provide information: there are a wide variety of simple and complex _____________ ___________ for analysing data.
- The _______ that are produced by the system, or the nature of the information that is accessible online.
- The _____ of the ___________ - the managers for whom the reports are prepared.
tangible;
people; knowledge;
technology;
records; financial transactions;
cost accounting;
mathematical techniques;
reports;
users; information;
97
In summary, a MAS is an ___________ _______ that produces ___________ required by ________ to manage ___________ and create value for __________ and ____________.
information system;
information;
managers; resources;
customers; shareholders;
98
Risks in using Management Accounting Systems
- Excessive emphasis on __________ __________
- I________ orientation
- Lack of _____ c__________
- Lack of future ____________
- Failure to _____ performance measures to ________ circumstances
financial measures;
internal;
goal congruence;
perspective;
adapt; changing;
99
Key factors to consider when designing a MAS:
- I_________ and _______
- Sources of ______ data
- P_________ i________
- R________ required
Information; timing;
input;
processing invovled;
response;
100
An important aspect of MASs is the _________ of i__________ about ___________.
The nature of the performance measures used will depend largely on the nature of the organisation's _________ and the type of ________ in which it operates.
The information will be both __________ and ___-__________ in nature.
provision; information; performance;
business; industry;
financial; non-financial;
101
In the service sector, performance evaluation (and information about performance) may have several dimensions:
- f________
- e________
- i_________
- f________ p_________
- r________ u_________
- c____________
flexibility;
excellence;
innovation;
financial performance;
resource utilization;
competitiveness;
102
In the public sector/government, performance may be judged in terms of _______ and _______, which tie into the idea of '______ for _______', based on:
- E________ - obtaining suitable inputs at the _______ cost.
- E_________ - the process working as expected.
- E__________ - achieving goals.
MAS in the NFP sector may therefore focus on ___ ______ of these aspects of performance.
inputs; outputs;
value; money;
economy; lowest;
efficiency;
effectiveness;
all three;
103
A MAS should be capable of providing information at a:
- S_________
- T_________ (management control), and
- O__________ level
for management.
Strategic;
Tactical;
Operational;
104
Strategic Management Accounting is a form of management accounting in which emphasis is placed on information which relates to factors ________ to the entity, as well as to ___-_________ information and ________-__________ information.
external;
non-financial;
internally-generated;
105
Examples of strategic information:
- C__________ costs
- Financial effect of _________ _________
- P_______ p_________
- C________ p_________
- P______ d_________
- Value of _______ _______
- C________ expansion
- B_____ values
- S_________ w_____
- C____ f____
competitor's;
competitor response;
product profitability;
customer profitability;
pricing decisions;
market share;
capacity;
brand;
shareholder wealth;
cash flow;
106
- The information required for management control _______ the _______ organisation.
- It is provided for budgeting and planning, monitoring and other decision-making purposes at a __________ ______ level within the organisation.
- The information is ____________, such as labour hours, quantities of materials consumed, volumes of sales and production, and is commonly expressed in ______ terms;
- But, tactical information and strategic information may include ___-_________ elements.
embraces; entire;
management control;
quantitative;
money;
non-financial;
107
Examples of management control information might include:
- P_____ f________
- V________ a_______ r_______
- P__________ s_________
profit forecasts;
variance analysis reports;
productivity statistics;
108
Some tactical information is ________ _________, perhaps weekly or _______, in the form of ________ reports
prepared regularly;
monthly;
regular;
109
Operational information is information that is ________ for the _______ of ___-__-___ implementation of _____.
It will include much '__________ _____' such as data about _________ orders, ________ orders, ____ receipts and p________.
needed; conduct; day-to-day; plans;
transaction data;
customer; purchase; cash; payments;
110
The amount of ______ provided in operational control information is likely to vary with the purpose for which it is needed.
Operational information, although __________, is more often expressed in terms of _____, ______ and __________ of material.
The extent to which management accountants are involved in providing information at the operational level will depend on the _______ of the information and the ___________ structure within the organisation.
detail;
quantitative; units; hours; quantities;
nature; responsibility;
