The clear line drawn between accounting and managing, for example, illustrates that traditional accounting systems are of little use to the managers, and that they should have their own accounting systems to meet their needs.
Another way in which Fayol influenced managerial accounting systems is in the way he viewed organizational structure. Some of his key structural principles, such as centralization and scalar chain, reinforce the value of management accounting systems. The systems are needed to support the chain of command, and the top manager at the center of the system. The principle of unity of direction probably contributed the most to management accounting systems because it ties objectives together with a single manager. This guided management accounting systems towards meeting specific singular objectives, and framed the chain of tasks around goals.
Behavioral theories also helped to have an influence of the development of management accounting systems. Human relations is…… [Read More]
Management accounting provides data that can help a small business craft a strategy that can be used to meet their financial and organizational objectives by assisting in the decision making process. Examples of types of issues that a management accountant is equipped to analyze might include items such as product costing, relevant costing, capital budgeting, and operational or strategic planning. Furthermore, a management accounting can design, implement, and manage internal metrics that sustain timely decision making, planning, and control over the business's most critical operations. Being able to determine financially which business activities are profitable and which could be refined is a critical part of any small business strategy and often can represent the difference between success and failure.
The field of management accounting, or managerial accounting, is rapidly evolving with new technology and analytical tools. The modern business environment is becoming increasingly competitive and sophisticated their strategic positioning. For…… [Read More]
This is consistent with contingency theory -- not only must the managerial system be broadly appropriate for the firm type, but is must also be fine-tuned to meet the specific structural and environmental needs of the firm. The subsystems must be congruent with the firm's objectives, and firms of the same type do not necessarily have the same objectives (ade & Schneberger, 2006).
A firm can, if it chooses, use a managerial system that broadly fits its needs, such that the same system is used in a number of similar organizations. However, for a firm to be most effective, it should tailor that broad system to meet its specific circumstances. Management cannot assume that a managerial system used by a similar organization will work for them, because not too firms will have the exact same structure, environment, and objectives. Because management accounting is so focused on the provision of information…… [Read More]
This will help mananagement to understand how sensitive the organization is to changes in the sales mix. Such information is helpful when determining future strategy and spending decisions.
The sensitivity analysis can also help is determining the ideal degree of operating leverage. In general, the greater the leverage the greater the sensitivity of the organization to change. Understanding the effect that operating leverage has on the business is one of the key benefits to CVP analysis.
One of the potential problems with CVP analysis is that it implies future performance based on either past trends or on assumptions. The market may not react as expected changes in the marketing mix, price or other variables. The sensitivity analysis can mitigate some of this effect, but the risk still exists that the market will not react in the manner that was modelled using CVP.
Another potential problem is that CVP analysis is…… [Read More]
In addition, service measures like customer satisfaction are also gauged. Production measures -- especially those related to efficiency and airplane load factors -- are also critical in decision-making at the organization. But the PSP philosophy illustrates clearly that FedEx recognizes the link between non-financial measures and financial outcomes. Thus, the company explicitly measures performance in non-financial terms, specifically because it believes that its financial performance will benefit from focusing on non-financial measures.
Overall performance evaluation approaches should include a mix of non-financial and financial measures. This perspective recognizes that financial objectives are not achieved in a vacuum -- that they require work on a number of inputs in order to achieve financial objectives. The use of performance measures of all types will help to orient the activities of the organization towards actions that will have a positive impact on the company's ability to achieve its financial objectives. Good companies recognize…… [Read More]
The IMA statement of ethical professional practice begins with the overarching principles of honesty, fairness, objectivity and responsibility. The statement consists of four standards, these being competence, confidentiality, integrity and credibility. Lastly, the statement provides guidance for the resolution of ethical conflict. Three steps are to contact a superior, then an IMA ethics counselor and then finally a lawyer.
There is evidence in the Enron case that Enron's executives violated some of the elements of the IMA ethical statement. Now, it is worth remembering that the fraud was related to the financial accounting statements, and there is less strict legal guidance with respect to managerial accounting, but the IMA statement still pertains to the accounting function. Clearly, Enron did not adhere to the overarching principles of honesty, fairness, objectivity and responsibility. It is felt that they were probably deliberately dishonest and it has been proven that they hid…… [Read More]
The control of the financial resources is pivotal in any occupation as it serves a multitude of purposes. For instance, an extensive budgetary process helps set realistic and attainable objectives, while also considering resource constraints (Shim and Siegel, 2005, p.9). Additionally, the financial planning component is a central element in the final success of any business endeavor, and one could wonder how it is possible to reach business success without focusing on financial constraints. It is in fact rather difficult. While it may be doable for companies in the public sector or for not-for-profit institutions, to a for-profit company, for which "profitability is the primary goal of the firm, […] financial systems are inevitably the primary mechanism through which top management seeks to control performance" (Grant, 2005, p.214).
From the lessons of Body Glove however, one can see that business triumph is indeed possible with a reduced emphasis on budget…… [Read More]
Purpose of Management Accounting
An organization is typically a system consisting of many departments that work as a system. The overall performance of an organization is based on the individual contributions made by the varied departments therein. One of such departments is the accountants and accounting management department. The purpose of management accountant is to support decision making by collecting, processing, and communicating information that helps management plan, control, and evaluate business processes and company strategies. These types of roles and responsibilities have not been accorded to the self-directed accountant in most cases. This is because many of these responsibilities have been left to individual people in the company.
Many organizations do not have a typical docket of management accounting. Instead, this docket has many individuals who are accorded the same roles. Financial reporting is an important docket within an organization. This role is executed at the beginning…… [Read More]
Classic Pen Company is an organization specializing in the production of pens, the Classic Pen has been enjoying the low costs for the production of BLACK pens and BLUE pen, and the company has enjoyed the profit margin of 20% of sales. Increase in sales makes sales manager to decide to expand business by introducing new product line, which could offer at a 3% premium. Thus, management introduced ED pens, which could be sold at 3% premium despite its complicated production requirements. PUPLE was also introduced last year because it is has been viewed to command 10% premium selling price.
Since the introduction of new products, the financial statement of Classic Pen has been disappointing and there is a need to address the problem to make the company to enjoy increase in profitability.
Production of new ed Pen and Purple Pen has made Classic…… [Read More]
Management Accounting in a Growing Business
One of the most important factors towards the success, productivity, and growth of a business is management accounting whose significance has attracted considerable attention in the recent past because of new trends and recent developments. Actually, management accounting is considered as a business process that creates energy, which drives a company's results and success. The significance of management accounting in today's business environment is also attributable to the fact that business organizations are increasingly focusing on value creation instead of valuation. In light of these factors, a growing business needs to establish suitable management accounting processes based on understanding the significance of investing in management accounting systems for future organizational growth and profitability.
Management Accounting v. Financial Accounting
Management accounting and financial accounting are terms that have widely been used interchangeably despite the difference between the two concepts. While management accounting is a process…… [Read More]
The use of managerial accounting to keep profit margins where they need to be and make sure that individual product offerings are not a net drain on the company is not the only thing that Thai Airlines can and must do to keep a competitive edge and to protect themselves from things like corporate malfeasance and terrorists attacks, but it is certainly a major thing that should be take into account and otherwise dealt with in a timely and complete nature. It will not be easy for Thai Airlines to keep their competitive edge largely because other firms will be doing the exact same calculations and measurements. However, not doing so would be ceding progress and adeptness to their competitors. As such, not doing managerial accounting should be a non-starter for Thai Airlines.
AccountingExplained.com. (2013, May 12). Managerial Accounting Introduction | Accounting Explained. Accounting Explained | Financial and Managerial…… [Read More]
The two basics to keep in mind is that managerial accounting should be used early and often and not just internal stakeholders should be heeded and listened to (Tutor2U.net, 2013).
In conclusion, Thai Airlines would benefit greatly from an entrenched and well-managed managerial accounting framework. It should supplement and complement both the financial accounting mechanisms of Thai Airlines as well as general process management, general product management, marketing, other accounting matters and general business decision making for Thai Airlines. Part and parcel of all of that is integrating stakeholder's expectations and conversely managing the expectations and perceptions of those same stakeholders is also vital on a number of levels. However, if all of the above is managed and managed well, then the outcomes for firms like Thai Airlines that use managerial accounting effectively will tend to be very good.
Holtzman, M. (2013, May 12). Managerial Accounting for Dummies…… [Read More]
Yet, success would be reached as the system would be better able to account for the intangible assets within a corporation and link them to the final costs of the service. This view argues that despite its recognized reduced applicability in today's business community, traditional management accounting systems enjoy the benefit of vast expertise and advantages which have been consolidated across time. Therefore, their elimination would have a negative impact and the most desirable course of action would be that of a readjustment of the system to meet the new and continually emerging needs (Financial Executive, 2002).
The next proposition that is being then forwarded revolves however around the idea that it would be even more efficient to replace the traditional systems altogether, rather than spend additional time and efforts to repair the old one. The traditional techniques of management accounting, despite their past benefits, are nowadays less applicable. And…… [Read More]
The mistake occurred when enthusiasts tried to use those data for other purposes such as 'strategic product decisions.' The average cost of production never could, and never will, be relevant for those classes of decisions where only the change in total costs and revenues are relevant. That is, the rough, average post calculations provided a guide for pricing unique one-off products or services, but were of no use for the other purposes (emphasis added) (Garner & Tsuji, 1995, p. 52).
The strategic product decision function of management accounting described above is based on the strategic management accounting method; this approach serves to cause change in the management framework through various accounting devices designed to adapt effectively to the constantly changing external business environment (Garner & Tsuji, 1995). Strategic management accounting, though, should be managed by production people (including sales and engineering), rather than by accounting staff (Garner & Tsuji, 1995).…… [Read More]
role of management accounting for Bravo plc and discusses its use as an effective management tool. Management accounting, also called managerial accounting, is concerned with providing information to managers inside Bravo, those who direct and control its operation.
For management accounting to have strategic value, it must accomplish the three strategic objectives of quality, cost and time. Management accounting achieves its objectives by providing information that links the daily actions of managers to Bravo strategic objectives; by enabling Bravo mangers to effectively involve the entire extended Bravo enterprise of customers and suppliers in achieving strategic objectives; and by taking a long-term view of Bravo's organizational strategies and actions. Once Bravo managers understand the benefits to their organization that management accounting provides, they can use the information that is generated to make better decisions and improve the company's performance (Bell, Ansari, Klammer and Lawrence, 2010).
The Institute of Management Accountants (IMA)…… [Read More]
history of Management Accounting in a ten-page paper and review product costing, investment analysis and organizational performance evaluation over the past 150 years.
Read Relevance Lost: The Rise and Fall of Management Accounting and reference four other articles that describe the evolution of Management Accounting.
This paper examines the role of management accounting over the years as a system for determining an organization's performance and profitability. This paper further analyses the evolution of certain management accounting practices and their role in global competition and productivity.
Today's management accounting information, driven by procedures and the cycle of the organization's financial reporting system, is too late, too aggregated, and too distorted to be relevant for managers' planning and control decisions.
"In attempting to understand the genesis and scope of modern cost and management accounting systems, accounting historians adopting what has been labeled as a "Foucauldian" approach have been rewriting the history of…… [Read More]
Louis, MO, and investing heavily in intuitive products (2004, pp. 1-2).
It should be easy for one's roommate to see why it is important to take financial accounting if one wants to go into International business. Management accounting will afford one the knowledge to make important international business decisions when needed. Without this basic knowledge, it would be more difficult for one to understand the significance of some basic decision making moments. Without management accounting, one can have difficulty deciphering whether or not to invest staff, money, or other resources in another part of the world.
Anderson, D.J. (2004, May 25). Management vs. Financial Accounting. AGILEManagement.NET, 2004,May, pp. 1-3. etrieved 08/04/05, at http://www.agilemanagement.net/Article/Weblog/Managementvs.FinancialAcc.html
Venture Line (2005, 2005). Accounting Dictionary. etrieved 08/03/05, at http://www.VentureLine.com… [Read More]
Financial & Management Accounting
Selling price of the AOK Play
Contribution per unit = Selling price per unit -- variable cost per unit
total variable cost (= total cost -- total fixed costs) / sales
(3,600,000 -- 2,100,000) / 80,000
(1,500,000 / 80,000)
Selling price = $50 per unit
Fixed cost per unit
Fixed cost per unit = total fixed costs / sales
= 2,100,000 / 80,000
= $26.25per unit
Total cost per unit
Total cost = total variable cost + total fixed costs
= 18.75 x 80,000 + 2,100,000
= 1,500,000 + 2,100,000
Cost per unit = total cost / sales
= 3,600,000 / 80,000
= $45per unit
Contribution margin per unit = total contribution / sales
= 2,500,000 / 80,000
= $31.25per unit
Expected Profits and Breakeven
Breakeven = total fixed costs / contribution per unit
= 2,100,000 /
=…… [Read More]
"The nature of crop and livestock life-cycles means there are fewer and more significant opportunities to intervene, as opposed to the continual tinkering that can occur in a factory" (Ross 2008, p.42).
However, Jack believes that inadequate record-keeping may also be to blame for farmer's reluctance to use TCM in the industry. Even if TCM must be modified for agriculture, this does not negate its applicability. Farmers must learn how to make TCM work for them. Certain factors make it more difficult to identify target prices and costs, but they are not reasons to avoid implementing TCM. Rather, using TCM could encourage farmer to adopt more innovative practices and help to manage risks inherent in this industry. Jack believes that the resistance to TCM is more endemic to the culture of the agricultural industry than due to real problems with its use in agriculture.
The formula for TCM is fairly…… [Read More]
The topic of finance and managerial accounting inclusively, are broad and incorporate a critical skill set in the modern day business student. Finance involves corporate and investment finance and managerial accounting is complimentary as it involves cost accounting and essentially stresses cost management. Together, these topics provide a comprehensive financial analysis skill set yielding capability in solving the day's most critical business financial quandaries. The literature review will seek to narrow down the literature and funnel the topic into the main financial analysis area.
According to Musvoto, (2011), "Studies in accounting measurement indicate the absence of empirical relational structures that should form the basis for accounting measurement. This suggests the lack of objectivity of accounting information. Landmarks in the development of finance theory indicate the use of accounting measurement information as a basis for their development. This indicates that subjective accounting information is incorporated in finance theory. Landmarks…… [Read More]
Strategic Perspectives in Management Accounting and Finance
The main reason for differentiation in the accounting studies seemed to occur due to the functionalist perceptions in the expertise of social studies. According to Dellaportas and Davenport (2008) professions are being separated by occupation on the basis of the level of distinctiveness one occupation has from another; a model first designed by Greenwood in 1975.
Abercrombie et al. (1994, p. 335) in their study explained that such distinctiveness is surrounded by the concept which results in more beneficiary outcomes for the public than for an individual's professional interest in providing services. This simply means that it was an original human demand that gave birth to all professions. There's an equality on profession's social compulsion i.e. there is a balance between a professional's job and his obligation to serve the public. In this regard Carey (1965, p. 376) asserted that it was in…… [Read More]
Management Account in the Public Sector and Management Accounting in the Private Sector: A Comparative Review
The late 20th and early 21st centuries have brought increasing change to almost every country in the world, Australia included. Globalism describes, in fact, the increasing unification of the world through economic means (reduction of trade barriers, support of international trade, and mitigation of export and import quotas). They goal for globalization is to increase material wealth and the distribution of goods and services through a more international division of labor and then, in turn, a process in which regional cultures integrate through communication, transportation and trade. The overall theory is that if countries are tied together cooperatively economically, they will not have needed to become political enemies. Additionally, the idea of globalism and international trade has changed the way Australian's view public and private businesses and the opportunities afforded them because of investment,…… [Read More]
"Management believes that the accounting estimates employed are appropriate and the resulting balances are reasonable; however, due to the inherent uncertainties in making estimates actual results could differ from the original estimates, requiring adjustments to these balances in future periods."
ased on the data retrieved and the projections made, the accounting division will proceed to the development of the consolidated statements for all of GM subsidies and the overall group. There are 24 consolidated statements, as follows: Discounted Operations; Asset Impairment; Investment in Nonconsolidated Affiliates; Marketable Securities; Variable Interest Entities; Finance Receivables and Securitization; Inventories; Equipment on Operating Leases; Income Taxes; Property - Net; Goodwill and Intangible Assets; Other Assets; Accrued Expenses, Other Liabilities and Deferred Income Taxes; Long-Term Debt and Loans Payable; Pensions and Other Postretirement enefits; Commitments and Contingent Matters, Stockholders' Equity; Earnings per Share Attributable to Common Stocks; Derivative Financial Instruments and Risk Management; Fair Value of…… [Read More]
Yet, financial statements and managerial accounting reports can be highly effective nonetheless. Sometimes they will merely confirm what the proprietor already knows, but there are inevitably going to be times when they will reveal that the proprietor's assumptions about the nature of the business are false. Moreover, accounting can act as essentially a second opinion. The proprietor may feel one thing is true, but the numbers can reveal something different.
Overall, accounting is an essential component of any business. Sole proprietorships often make less use of accounting, in part because the law does not obligate them to engage in any more than the most rudimentary accounting. However, proprietors should not overlook the value of accounting. Accounting helps to reveal the business' past performance, but can also be used to enact organizational controls today and to help plant for more effective operations in the future. By understanding the firm's cost structure…… [Read More]
Common buzz words management uses in regards to loss are, "Probable," "easonable," or "emote." Although these words can vary, management must be careful to provide an accurate account of the likelihood of loss and a reasonable estimate of loss. It is important to note that many contingent liabilities are not currently a liability but may become one in the event of adverse circumstances in the future. An example of an accounting journal entry for a contingent liability is listed below
A manufacturer of XYZ shoes provides products to various consumers worldwide. XYZ Company provides itself on excellent customer service. As such, it provides a one year warranty on its shoes. Using the company's proprietary information, they estimated that each shoe sod is equivalent to roughly $2 of warranty expenses. During the current year, XYZ Company sold 20,000 pairs of shoes. As it is probable that XYZ company will…… [Read More]
The management accounting leads candidates into finance, risk management and even production management. hile CMA certification is not necessary to pursue a career in management accounting, it is recommended. The IMA claims that certified management accountants earn on average $25,000 more per year than non-certified peers (IMA, 2011).
As with the accounting profession in general, there is increased demand for management accountants. CMAs are in demand because of their ability to contribute to the profitability of businesses, and demand for CMAs is expected to grow in coming years. Because CMA job duties are less structured than those of financial accountants or auditors, CMAs enjoy greater career flexibility.
Both types of accounting positions are poised to enjoy significant growth. There is also a trend in business, particularly since Sarbanes-Oxley, of looking to accounting professionals to lead firms. More CEOs are coming from the accounting stream than ever before, which highlights the…… [Read More]
One example has been the printer market; firms will often subsidize the printers that are sold, with the aim of creating long-term profits by the ongoing sale of the printer cartridges (Thompson, 2007). The cellular telephone market also operates in a similar manner, with mobile phone service suppliers subsidizing the cost of the handsets in order to gain a contract from a customer, the cost of the subsidy is offset against the profit that will be gained on the service contract. Therefore, the firm will need to look at the impact that ending production may have on the sale of other goods. However unless there is a complimentary item then it would appear some changes may need to take place.
If there is a loss with the fixed costs of $1,000,000 it is will be expected that higher fixed costs will increase the loss.
Assessment with fixed costs at $3,000,000…… [Read More]
The second question is the cost per unit to produce a given product or deliver specific service. Just as the total cost of revenues for a business, this figure will also provide a business owner with insights into how their business is operating, from the supply chain through pricing and distribution of gross margin assumptions (Hall, 2010). The cost per unit to produce is also a good measure of how well the efficiency of a given company is running at. Often a business owner will evaluate these from the standpoint over the long-term, looking for trends in hwo their business is operating at an efficiency level that makes the entire company profitable. For services business, the cost per service event or services deliver (as a plumber making a house call) needs to have a minimum charge level as costs are allocated across all forecasted calls in a given month. This…… [Read More]
Managing Organizational Change
It is reasonable to suggest that companies of all types and sizes have integrated information technology systems of some sort to help them manage their businesses and achieve a competitive advantage in recent years. Because computer systems tend to become obsolete rapidly as Moore's Law continues to hold true, many companies have accumulated a mish-mash of various computer types and capabilities that may not operate efficiently in a networked environment. When these legacy systems are replaced by a standardized array of compatible computers, the transition may introduce a number of challenges and obstacles that can adversely affect the company's ability to remain agile and responsive to internal and external customer needs. To determine how the transition from an older legacy system to an improved set of computers can be achieved in an efficient fashion, the key stakeholders who are involved in the process, and the potential lessons…… [Read More]
The traditional role of budgeting combines the need for planning and the development of a framework which can be used for control. This is achieved through the gathering of figures for the expected or desired revenue generation and the expected or desired outgoings associated with the generation of that revenue (de Waal et al., 2011). Two major forms of budget exist for commercial organizations; capital budgeting and operating budgets, the former deals with large long-term projects and investment, whereas operating budgets deal with the everyday operations of the firm or department (Horngren et al., 2010). It is usual for budgets to be prepared in advance of the period in which they will be applied, gathering the relevant information in order to create a budget. The most effective and potentially accurate budgets are those which have accurate input information, which often means consulting with relevant managers involved in the…… [Read More]
When it comes to standard costing, what is referred to as a standard cost is assigned the costs (actual) of manufacturing overhead, direct labor as well as direct material. In this case, these costs are not assigned to a product. It therefore follows that amounts mirroring standard costs are what become identified first in regard to the cost of goods sold as well as inventories of a given manufacturer. In this case, it can also be noted that standard costing is regarded a rather important tool of management. Incase of any variance, the top leadership of the organization immediately becomes aware of the variation between planned/standard costs and manufacturing costs.
The information provided by cost accounting is critical when it comes to the effective management of an organization. Without such information, decision making would become an equivalent of operating in the dark for most businesses. For instance, firms would…… [Read More]
ystems of income and financial position would superimpose standards of normalization upon everyone within the firm. Accounting, thereby, had achieved Foucault's definition of knowledge as power over people per excellence. By the 1950s, however, person as decision-maker replaced this vision of person as machine, and accounting still has power in our society, but a different sort of power. Likewise, accounting still possesses its constructivism (i.e. manner of perceiving a certain stranglehold on reality by emphasizing certain construct and demoting others), although its constructivist paradigm may have differed from that of, say, a century ago. Individuals are viewed, measured, and criticized within programmatic frameworks, and Miller and O'Leary (1987) suggest that accounting today can still be viewed as part of the heritage and structure (albeit slightly changed) of the traditional mode of power that it was in the early decades of this century. In other words, the slanted domination of accounting…… [Read More]
They then proceed to detail their selected sample (76 NYSE firms that reported at least three annual losses in period's 1980-1985 and that reduced cash dividends. They then implemented various conditions to test their hypothesis that it is the troubled firm's aim to retain preservation of their company, rather than to make a bonus, that causes them to select a certain accountancy plan.
In section 2, the authors describe their methods used in selecting a sampled population and their bias controls. There is a great deal of numerical data, and the material is dense particularly when they elaborate on the earnings and cash flow performance of the various firms. Each unit is broken up into subunits. Scholarly tables condensed with data that for instance report accrual levels and changes for the 76 firms support their written text and the Tables are alluded to in the text. Statistical analysis of these…… [Read More]
accounting systems, their tradeoffs, and discusses the differences between countries in their approaches.
Each of the cost accounting systems discussed in the articles accomplishes some management goals better than other systems, but there are tradeoffs involved with each. Different nations approach their cost accounting systems differently due at least in part to differences within cultures. For instance, GP is more suited to countries where the culture is one of uncertainty avoidance, one of the five dimensions of Hofstede's taxonomy. GP offers the most uncertainty avoidance because there is relatively little ambiguity in the assignment of costs; GP is characterized by narrowly defined cost centers and strict cost center criteria. Cultures such as Germany's are characterized by a management environment that includes highly skilled workers and technical expertise among managers. This is in contrast to the U.S. where workers tend to have more generalist skill sets and managers have been educated…… [Read More]
management has to do with the knowledge of the resources a company uses in running their daily affairs. It also involves effective projection of additional resources that could be needed along the way, and the maximization of the available resources. Maximizing the efficiency of the available resources and the ability to put some of them in reserve are part of Cost Management. Some scholars define cost management as the of cost setting up systems of accounting and models for the provision of guidance in relation to current and future operations in order to achieve specified objectives. They also believe that analyzing and interpreting cost information is vital and aids the processes of decision making. Basically, between a client and a contractor, cost management refers to the final cost of a construction project (Dubois, 2003).
The major reason for the analysis of cost management is to find a more effective final…… [Read More]
accounting important success firm? What methods cost accounting ? The paper (a) identify main issues chosen area, (b) reference learning occurred, (c) build class activities incidents facilitated learning understanding, (d) present specific current / future applications relevance typical workplace.
Cost accounting -- definition, importance, methods
The modern day society is constantly presenting the economic agent with more numerous and more pressing challenges. In order to face them and emerge as a competitive institution, firms develop and implement a wide array of strategies, such as creating customer value, developing the skills of the staff members, establishing strategic partnerships or creating financial stability and accountability. One specific means in this endeavor is represented by cost accounting, which represents a key to organizational success. The current project focuses on the identification of the reasons as to why cost accounting is important to organizational success. A secondary research objective is that of pin pointing…… [Read More]
d.). The methods by which this information is gathered will differ based on the type of production that is being undertaken. Cost flow assumptions relates to how costs flow through inventory accounts. This can include FIFO, LIFO, weighted average and other methods. This impacts the costs because it helps to determine which costs are counted for which period. Recording interval capability refers to the points in time when a company takes inventory. Many firms use perpetual inventory, but some firms will take inventory periodically in order to provide this information.
Overall, cost accounting systems provide the information that managers need with respect to the costs of a product. By using a specific system, wherein decisions about methodology are made about each of the five parts of the cost accounting system, the system will be consistent through different products and through different time periods for the same product. This will ensure…… [Read More]
The coercive style: decisions are made top-down with little emphasis on individual ideas; it is best used in situations of crisis, but in the long run, it negatively affects the employees' morale levels
The authoritative style: sets clear goals and directions; rewards based on performances; individuality; it is stimulating for the dedicated employees; does not work if the manager is too demanding or when the employees work in teams
The affiliative style: based on the creation of a pleasant working environment; may lack control and stimulation; high performances only in a compact and hard working group, sharing common goals
The democratic style: employees' ideas are listened to; team work and participation are encouraged; could create a pleasant environment, but may lack control and direction
The pacesetting style: rapid pace of work, high expectations and performance-based rewards; might stifle creativity and generate a tense environment
The coaching style: based on roles…… [Read More]
Technology in Accounting
The author of this report is going to offer a fairly lengthy report about how technology has played an integral role in the changing of accounting. Indeed, technology and the internet have changed many things in demonstrable and perhaps immeasurable ways over the years. The author of this report will cover a number of different ways in which technology has emerged and changed things. Topics covered will include, but will not be limited to, pivot tables, API feeds from banks, credit card processing, vendor communication and enterprise resource planning (EP) systems. The four main dimensions that these technological updates have addressed include speed, accuracy, timeliness and applicability. While these rapid advances in technology have created some logistical, training and security headaches for many accounting and other professionals, the good of technology and how it has changed accounting far outweighs the bad.
Of course, the gold standard…… [Read More]
One of the crucial elements towards the realization of organizational success and profitability is creating a suitable working environment for all employees to thrive as they carry out their respective responsibilities. In essence, employees' contributions towards the achievement of established business goals/objectives is largely influenced by the nature of the working environment and working conditions. However, employees' behaviors also play a crucial role in determining their productivity in the workplace. Self-defeating behaviors in the workplace contributes to stress, which in turn affects employees' input to work processes and the overall profitability of an organization. This paper examines the management of stress brought by self-defeating behaviors in the workplace. The evaluation includes recommendations of suitable solutions to this issue based on organizational theory concepts and the concepts of organizational behavior.
The organization I work for has several divisions or department that are mandated with various responsibilities and tasks towards…… [Read More]
Performance Management Plan eview
The value of measuring and identifying key skills and attributes is essential to an evolving organization. The following performance management plan is tailored to the Stonefiled Limousine business.
Location: Austin, Texas
Type of Business: Limousine Service
Number of Employees
Current Predicted Annual Net evenue: $50,000
year evenue Growth Objective: 5%
Turnover ate: 10%
The purpose of a performance management plan is to track and guide an organization's employee's contribution to the organization. It is necessary to first identify the problems and objectives of the organization in order to get an appreciation for the industry and type of products and services they offer. The most important aspect of any performance management plan is that the organizational strategy is aligned with other facets of this improvement such as the Human esources and operations aspects of the company. Put simply, the company must understand what is being asked of…… [Read More]
Assessing the Current and Future State of The lifeblood of any business is the revenue it generates while managing costs, ensuring profitability of the business, and its long-term survival and growth. The catalyst of managing a business effectively is the use of accounting information, financial analysis, and increasingly in the 21st century, the use of real-time financial analytics on key performance indicators (KPIs) used to manage a business (Ferguson, Seow, 2011). Accounting systems continue to be the foundation of managing businesses to profitability while mitigating potential risks though insightful and real-time use of financial data. The future of accounting systems will be increasingly influenced by the real-time reporting and analysis as the Securities and Exchange Commission (SEC) has required the largest publically traded corporations in the U.S. To report their results through the extensible Business eporting Language (XBL) protocol (Tribunella, Tribunella, 2010). The SEC is setting a very…… [Read More]
Horn of Africa experienced what was termed the worst drought in 60 years. The drought, caused by the failure of the rains for two consecutive seasons, led to a severe food crisis across Djibouti, Somalia, Ethiopia, and Kenya, and killed more than 100,000 people while placing hundreds of thousands at risk of starvation. According to Hiller and Dempsey (2011), the greatest tragedy was that the world had seen this disaster coming, but little had been done to prevent it. From as early as 2010, there had been clear indications of a looming crisis and its consequences. La Nina, a climate condition that would lead to drier than normal conditions over the entire area had already been confirmed. Further warnings of the crisis were repeated and became more strident in 2011. In light of all the warning signs, it is, therefore, rather surprising that proper response from the international aid system…… [Read More]
he field of finance largely concerns itself with investment analysis and the management of funds. he fields of accounting and finance are distinct from each other. Essentially, finance, from the occupational perspective, has largely got to do with the efficient procurement and utilization of funds. On the other hand, still from an occupational perspective, accounting largely concerns itself with the examination and analysis of financial data, and preparation of financial statements. It should, however, be noted that the roles of both professions do in some cases overlap. Indeed, accounting according to Khan and Jain (p. 1.5) should be viewed as a finance sub-function.
In a typical corporation the finance function is divided into two divisions, or departments. What are they? What does each department do?
he finance function is typically divided into the financial accounting and management accounting divisions. Management accounting in the words of Drury (2006, p. 7)…… [Read More]
hy I Chose Accounting
"I hate math." Ever since I can remember people have approached me to tell me how much they loathe math, when they hear that I love it. However, I have always been fascinated by the order mathematics can bring to a chaotic world. Sometimes when life seems hard, it is very comforting to be able to look at numbers. This is not to say, of course, that accounting is not challenging. In fact, like many prospective accounting majors, I initially struggled with the discipline in my fundamentals courses ("Top 10 Easiest and Hardest College Degree Majors of 2016"). There is a reason that introductory accounting classes are often considered weeding-out, gatekeeping classes for the profession. Many people decide they want to be accountants because they think it is a lucrative profession that does not require as much additional schooling as law or medicine but then…… [Read More]
forecasting, there are a litany ethical dilemmas, decisions characteristics, problems, or frameworks that may impact the financial statements of Home Depot and Lowe's. The most egregious of which is management assumptions regarding future performance. In many instances, with the exception of cash, nearly every line item has some form of assumptions involved. Accounts receivable is often reported net of the allowance for doubtful accounts, which is a management assumption (Alexander, 2005). Management has the ability to dictate if the company will report inventory using LIFO of FIFO accounting rules. With LIFO, assuming rising prices in an inflationary environment, Cost of Goods Sold will increase thus reducing Net Income. However, the reduction in taxes paid will actually make the company's cash flow from operations increase on the cash flow statement. FIFO will have the opposite impact. From a shareholder perspective reporting under LIFO would be more to the shareholders advantage as…… [Read More]
What are the benefits of a comprehensive control program? If you were advising this corporation, what would be the specific benefits for them?
The benefits of a comprehensive internal control program include: the ability to monitor for unusual activities and it will increase vigilance. This will help to prevent fraud by providing actuaries with an actual way of discovering when these events are occurring through early detection. It is at this point that the negative impact on the firm and various stakeholders can be minimized. (Silverstone, 2011, pp. 14 -- 16)
Once this has been consistently implemented, is when it will have an impact on the entire organization by creating an atmosphere that is looking for these issues. When different staff members are actively involved in the process, this will make it difficult to be able to conduct any kind of fraudulent activities. In the future, this will…… [Read More]
Several terms and definitions are valuable to understand financial statements. In the United States, financial statements of public corporations are produced in accordance with the U.S. Generally Accepted Accounting Principles. These principles govern how the information for financial statements is compiled and presented. The purpose of these principles is so that all stakeholders can easily understand the statements and make comparisons across both time and across different companies, because the statements are produced and presented in a consistent manner. The International Financial eporting Standards (IFS) are the international equivalent of GAAP. While several countries utilize a national version of GAAP (U.S., Canada, UK, etc.), more than 100 countries use IFS, making this set of standards the most widely-adopted in the world. There is a move to converge national GAAP standards with IFS, including a multi-year project to converge U.S. GAAP with IFS. For now, however, IFS represents a different…… [Read More]
Accounting for Decision Making
Roland Anderson is the manager of the Ekland Division of Ystad Industries and has some decisions to make based on accounting data. Anderson is also being considered for the CEO position of the company which makes his dilemma even greater. He is unhappy with the profitability for the first quarter and is considering maxing out the capacity of the operation in the second quarter. It was found that Anderson actually performed fairly well based on the assumption that his actual costs were below the variable costs provided in the case using the contribution method. Doubling the production plan would be an unwise move given the fact that the sales forecast is only for twenty five thousand units. Thus if he produces fifty thousand units he would have greater inventory and it is likely that he would have to cease operations and let some workers take a…… [Read More]
Most audit managers assign supervisory tasks to senior auditors and, in general, consistently encourage more senior auditors to fulfill a mentor role within the audit team.
The dual benefit of this practice is that it fosters greater team unity and a healthier organizational culture, in addition to enabling junior auditors to learn technical skills from their more senior associates. Very often, the types of relationships maintained by senior auditors within their audit teams is one of the most important criteria considered in conjunction with possible recommendations for future promotion of senior (GS-13) auditors to management at the GS-14 level. By the time auditors reach the GS-13 level, they are not readily distinguishable from one another in technical skill (or they would not have risen above the GS-12 level).
Therefore, it is precisely their performance in the unofficial role of "supervisory" auditor that is most often considered the difference between auditors…… [Read More]
Accounting forms the overall backbone of the financial world. Financial markets are predicated on consumer and user confidence. Without confidence, consumers attempting to make financial decisions will be doing so using inaccurate and incomplete information. The lack of transparency regarding the truthfulness of reported numbers creates uncertainty within the capital markets. This uncertainty regarding the accuracy of information ultimately undermines the overall financial system, causing harm to society in the process. Investors will require higher rates of return, individuals will become unlikely to invest, and innovation could become stifled, harming the quality of life for society overall. Accounting standards, particularly those from the IFRS, are required to help maintain confidence in the reliability of reported financial performance. These standards, such as IFRS , are often amended to reflect the economic realities of business transactions. These changes, although well intended, may often have unintended consequence. This is particularly true for IFRS…… [Read More]
In aaccounting research, the model used would be called analytical modeling, which consists of sstudies that use models with no specific underlying economic theory but use mathematical techniques. The mathematical formulas are applied to test and establish laws and accounting practices. Simulation, or the practice where the analysis is so complex that it requires a computer, is also an example of an inductive accounting practice research methodology.
Finally, pragmatic research utilizes pragmatic validity, which views research from a prescriptive-driven perspective. For example, solutions to problems that actually occur in the complex and high field of practice are developed in a way that, while valid for a specific situation, need to be adjusted according to the context in which they are to be applied. In the accounting area, general empirical research is a catchall that includes primarily descriptive empirical work. Another example of an accounting research methodology that consists of pragmatic…… [Read More]
Furuholt, (2006) argues that lack of management engagement to the acceptance of information systems has been a barrier to the implementation of information systems. The issues are even common with organizations in the developing countries where management does not give enough priority to the information systems implementation. Importantly, implementation of information systems requires management support since management will need to approve fund that would be used for IS implementation. Generally, younger people are more interested in the it tools than older people. In a situation where number of older working team outnumbers younger working team within an organization, the IS implementation may be cumbersome.
More importantly, lack of knowledge of information systems may serve as barrier to its implementation. In the developed countries, private and public organizations have already aware the importance of information systems to the organizations. Many organizations in developed countries already realize that it tool is a…… [Read More]
A senior executive in a Fortune 500 firm along with their colleagues on the company's management team are dependent on accurate, timely, and pertinent financial information regarding the health of the organization. Accounting information has aptly been described as "the language of business, which is used in the management, planning, control, and decision- making processes integral to achieving organizational objectives" (Marshall, D. & McManus, W. 1996). In this regard accounting information falls into distinct categories: financial and managerial accounting; yet with considerable overlap in their utilization by management. Explication of these accounting areas provides considerable insight into their utility in providing effective quantitative data for analysis.
Financial and Managerial Accounting
Financial accounting concerns itself with the "preparation and reporting of financial statements for an entity" (Marshall, D. & McManus, W. 1996); while managerial accounting "is concerned with providing information to managers- that is, to those who are inside…… [Read More]
What decision making model would you use to make this decision?
The rational decision making model would be the best choice in this instance. This model is particularly useful as it provides a systematic method of processing information. Many of the steps involved within the overall process involve judgment and foresight. In question 4 of the self test, the primary problem is centered on working an additional shift. The decision to work the additional shift lends itself well to the rational decision making model. First the model allows the development of alternatives, which can better aid management in its overall decision. Alternatives to working an additional shift would be to outsource labor, improve productivity through technology and so forth. Through the rational decision making model, these alternatives can be properly addressed while also outlining a means to arrive at the best possible decision. Management however, must guard itself on…… [Read More]
M.L., 2007). Managing a project where little support is present from upper management requires a precise degree of stable consistency in the way of project deployment, supervision and follow-up. There is much ado with executive decision making. When topics and issues arise where input or answers are likely to be unpredictable without higher level determination, a project manager is forced to put his/her best judgment to use while considering every potential avenue for adjustment.
3) Completion dates are excellent points for performance metrics. How much overdue? How late?...etc. These are all excellent measurements that can be made.
Completion dates are absolutely imperative to the specific performance of any project, in any market or industry. Anytime that there is a centered goal or group objective that requires the combination of entwined efforts from every aspect of preparation and process, dates are indefinitely determinable of capability and the essential quality through progress.…… [Read More]
esearch Objectives and Scope
The main objective of the research then relates closely to the research problem. It is to research the problem of uncertainty as it manifests in the global business environment. Specific issues to be investigated include supply chain management and its related uncertainties, the production process itself and uncertainties related to it, as well as the post-production phase and market uncertainties that are related to it.
Time is also an important factor. Some industries require a long-term time frame in their planning process, which exacerbate uncertainties. The time factor should also be an important consideration in terms of creating a model that can effectively help businesses achieve their manufacturing and revenue goals.
To achieve these aims, the main objective of the research will then be to research industries and companies that operate on a global scale. They will be investigated for the models they have implemented to…… [Read More]
This concept originated with the principles of Total Quality Management (TQM).
The notion that only managers play a role in controlling work activities is based on two false ideas. One is the antiquated notion of totalitarian management. Modern management does not follow this style, as it is often not consistent with organizational objectives. The second false idea is that the manager can control the employee at all times. In practice, managers merely provide instruction and guidance with respect to work activities. Employees often devise their own ways of performing different tasks, and it would be near impossible for management to control this. Thus, employees do exert some control over work activities.
Q3. Operations management can be applied to any managerial function.
Operations management techniques are based around analysis of processes. Control is merely one aspect of the role, even within the operations setting. In fact, operations management also consists of…… [Read More]
Management Approach That Offers the Best Outcomes
for Knowledge Development
Understanding business, and what that process contains, is extremely complex. It takes years of study and focus to gain even a rudimentary idea of all a company has to do to remain viable. A company has to have employees who understand their jobs, clear work goals for all concerned in the business, accounting practices that tell the actual financial workings of the company and keep government agencies happy, along with many other processes among the strata. Threads run through all of the working practices of an organization which tend to bind it together. These can be tangible communication channels (email, phone lines, other forms of information technology), or they can be intangible. These intangible communication lines are another layer of complexity which the organizations managers have to control and mold. How people deal with one another is the way an…… [Read More]
Accounting and Intrusion Detection
In a report issued by Paladin Technologies, Inc., entitled: "Security Metrics: Providing Cost Justification for Security Projects," 273 organizations were surveyed on the topic of security. The report illustrates in quantifiable terms the depth and reach of intrusion detection on the financial viability of the organization. The combined reported losses from the firms surveyed totaled $265.6 million in 1999. The highest loss categories were reported as follows:
Type of Loss
Estimated Dollar Value
Number of espondents
Theft of intellectual capital
The average annual financial loss of firms surveyed was estimated at $40 million. Forty three percent of respondents were able to quantify financial losses, and seventy four percent were able to acknowledge financial loss. Ninety percent detected cyber attacks within the most recent twelve-month period and seventy percent reported serious breaches other than viruses, laptop theft, and employee abuse of…… [Read More]