Research Topics: Managerial Accounting

Managerial accounting

Managerial accounting Introduction In the era where the advanced computers and various technological interventions rule, the business organizations can now be considered assisting the modernization. The impact of the globalization compelled the entire organizations to make changes according to the increasing information that are mostly focus in their environment. When the propellers mean changes, they mean that all of the important areas in the organization should develop in their own way and establish the effective techniques and processes. The increase demands of the organizations and their obligation to follow the trend of changes, there is definitely an evolution on the role of the organizational areas to meet the needs of information in the modern organizations. Factors Affecting the Business Environment Management accounting or managerial accounting is identified as the process of identification, measurement, accumulation, analysis, preparation, interpretation, and communication of the financial information that are necessary in management planning, evaluation, and control within the organization. In the origin and evolution of the management accounting, there are four important factors that can create a big impact in the entire organization. The emergence of the permanent employees, continuous industrial revolution, the application of the scientific management because of the growing need for information, and the diversification within the working place are considered (Werner, 2004). In addition there are pressures and complexities in the working environment that cannot be avoided. The internal and external changes has been broadly applied in the new management accounting practices and as well as the roles of the management accountants. The availability of the technology and the information changes the strength in managerial accountancy. Learning the capacity of an organization to invest in changes is the ability of the management accounting and with the presence of the factors, there is a increase awareness within the organization in establishing well-functioning activities (Cooper and Dart, 2009). Role of Management Accounting The role of the management accounting is to integrate with the sustainable considerations in crafting the decisions and control processes. The contribution of the managerial accounting in the organization links in the various areas in the organization, In addition, the sustainability of the information provided is essential in the operation, management, and strategic control (van Heeren, 2002). Due to the approach of the organization in various market challenges, the traditional role of the management accounting changes but remains in the core of the managerial accountant’s activities. The shift of the role and the appearance of the changes are through the development and progress in the practice. First, the adoption of new tools and techniques and second is the movement of the accountants towards delivering the managerial decision-making, instead of providing information. These changes attracted many of the organizations and influence the people to make a difference. The drivers of change can result in the greater diversity in terms of the practice in the organization (Cooper and Dart, 2009). However, the shift in the roles being played by the management accountants is expected to create effectiveness. The new management accounting techniques were not necessary intended for the performance evaluation but to focus on the financial profits that can aid in creating sound and sensible decisions (Werner, 2004). Evolution of Accounting Techniques and Processes The new management tools and techniques had been developed because of the support in the idea for internal decision making. The accounting techniques such as the Activity Based Costing and the Balanced Business Score Card are the two techniques being used in the managerial accounting due to the growing competitiveness in the business environment. The use of the Activity Based Costing measures in more accurate the costs of the activities, products and services, and the customers. Meanwhile, the Balanced Score Card plays an important role in evaluating the business performance through the range of indicators such as the financial, customer, the business, and the organization itself. This new and improved approach of management accounting lies in the expansion of the type of management information that the organization generate. All of the information can contribute in the processing the quality of the products and/or services that targets the customer satisfaction (van Heeren, 2002). Conclusion The changes appeared in the business environment is inevitable for the organization as long as the people are aware about the impact that it might bring and the capacity of the business to endure the changes. The use of the new management accounting techniques and processes should still need to be investigated and measure the effectiveness in meeting the goals of the organization, more specifically in delivering the decisions.  References: Cooper, P., & Dart, E., 2009. Change in the Management Accountant’s Role: Drivers and Diversity, University of Bath School of Management [Online] Available at: http://www.bath.ac.uk/management/research/pdf/2009-06.pdf [Accessed 08 April 2010]. van Heeren, A., 2002. Management Accounting for Sustainable Development: A Chain Related Case Study between Costa Rica and the Netherlands, Institute for Environmental Management [Online] Available at: http://www.p2pays.org/ref/26/25585.pdf [Accessed 08 April 2010]. Werner, J., 2004. Management Accounting: Its Environment and Future, Introduction to Management Accounting, Prentice Hall Business Publishing [Online] Available at: http://www.mc.maricopa.edu/~prestoncameron/Faculty_Documents/ch01ima.pdf [Accessed 08 April 2010].  Credit:ivythesis.typepad.com

Managerial accounting

Managerial accounting Introduction In the era where the advanced computers and various technological interventions rule, the busi...

Managerial accounting

Managerial accounting

Managerial accounting Introduction In the era where the advanced computers and various technological interventions rule, the busi...

Job Description of a Finance Manager

Position Description   			Job 			Title 			 			Finance Manager 			Job 			Description 			To 			co-ordinate and manage the QBI Finance function and responsibility 			area, which includes ensuring the integrity of financial systems, 			producing accurate and timely financial information for Organization 			Management and Board, and ensuring compliance to statutory 			regulations and accounting standards. 			 			Organizational Chart representing accountability processes 			 			 			Position objective 			 			This position is primarily responsible for managing and operating 			the QBI’s financial activities including strategic financial 			management and budgeting. This position provides senior level 			support to the Director and Deputy Director. 			Key 			outcomes to be achieved 			The 			key outcome of this position is to provide senior level support to 			the Director and Deputy Director in terms of financial management. 			  			Key 			performance indicators and 			 			Competency Requirements 			Ø  			 			 			Degree in commerce, business or related field, with specialization 			in accounting and/or financial management or an equivalent 			combination of education and/or training and experience 			Ø  			 			 			Substantial financial experience in a large organization with a 			focus on financial management and operation. 			Ø  			 			 			Experience with the University’s financial and personnel 			administrative systems. 			Ø  			 			A 			high level of knowledge and proficiency with information technology, 			including experience and competence in using a variety of enquiry, 			accounting, spreadsheet, database, word processing, email and 			Internet software 			Ø  			 			 			Ability to develop financial reports 			Ø  			 			 			Ability to formulate and develop financial policy and procedures for 			a new Institute, within the constraints of wider policy and 			legislative requirements 			Ø  			 			 			Sound knowledge of the University’s financial policies and 			procedures or a demonstrated ability to rapidly acquire such 			knowledge 			Ø  			 			 			Ability to operate independently within established framework and 			guidelines 			Ø  			 			 			Ability to prioritize competing work demands and meet deadlines 			Ø  			 			 			Experience supervising staff 			Ø  			 			 			Ability to provide timely financial advice to management 			Ø  			 			 			Working knowledge of the University administrative systems: DA Link, 			Business Objectives, Masterpiece Financials 			Ø  			 			 			High level interpersonal and written and oral communication skills 			Ø  			 			 			Accuracy and attention to detail 			Ø  			 			 			Ability to work collaboratively in a multi-team environment 			Ø  			 			 			Strong orientation to the provision of quality client service 			Ø  			 			 			Commitment to good records management and procedures documentation 			Ø  			 			 			Ability to exercise initiative and judgment 			Ø  			 			 			Willingness and ability to accept responsibility 			Ø  			 			 			Drive and determination 			Ø  			 			 			Innovative approaches to solving problems   Summary The job title for this position is Finance Manager which is responsible in budget preparation, finance reporting and monitoring.  Aside from this, the Finance manager will be engaged in financial processes and creating policies, procedures and training for Queensland Brain Institute (QBI).  Actually, this position description ensures that the principles of equal employment opportunities are implemented promoted and adhered to, in order to comply with the QBI policy.  For this opportunity, it is very important that applicants are graduate of any degree course related to commerce and business with specialization in accounting and/or financial management or an equivalent combination of education and/or training and experience. Substantial financial experience in a large organization with a focus on financial management and operation is also needed.  With regards to personal qualities, applicants must have high level interpersonal and written and oral communication skills.  Accuracy and attention to detail with ability to work collaboratively in a multi-team environment is also required. Strong orientation to the provision of quality client service and commitment to good records management and procedures documentation may also create advantage for the position. Ability to exercise initiative and judgment, willingness and ability to accept responsibility, drive and determination and innovative approaches to solving problems are also required for finance manager candidates.   Credit:ivythesis.typepad.com

Job Description of a Finance Manager

Position Description Job Title Finance Manager Job Description To co-ordinate and manage the QBI Fin...

HISTORICAL COST CONVENTION, MARGINAL AND ABSORPTION COSTING

HISTORICAL COST CONVENTION, MARGINAL AND ABSORPTION COSTING   Historical Cost Convention Accounts are prepared under the historical cost convention. Historical cost accounts show the profits available to shareholders and are the most appropriate basis for presentation of the group’s balance sheet. Profit or loss determined under the historical cost convention includes stock holding gains or losses and, as a consequence, does not necessarily reflect underlying trading results. Also under the historical cost convention is the actual acquisition cost used for initial accounting recognition purposes. It assumes that assets are acquired in business transactions conducted at arm’s length. If an asset is acquired through some means other than cash, the cost of the asset is based on the value of the consideration given. The development of accounting standards for financial instruments has essentially been shaped by the need to report the off-balance-sheet exposures that entities might have to derivative contracts, which under traditional reporting norms are not reported, as derivatives do not have an investment to begin with, and therefore, no cost to report. Because of failures in the finance world, accounting standard setters realized that the existing historical cost convention was wholly unfit for financial instruments where the historical cost may give no indication of the inherent risks.   Marginal Costing Instead of the functional, characteristics of costs, the marginal costing system emphasizes the behavioral, rather than. The focus in this system is to separate costs into variable elements and fixed elements. Although this is not easily achieved because of the limitation in accuracy, and is an oversimplification of reality, marginal costing information can be very useful for short-term planning, control and decision-making. This is especially so in a multi-product business. In this system, sales less variable costs, regardless of function, measures the contribution that individual products/services make towards the total fixed costs incurred by the business. The fixed costs, regardless of function, are treated as period costs and, as such, are simply deducted from contribution in the period incurred to arrive at net profit. Marginal costing is a simple, cheap and accurate method of comparing two items in order to make a choice between them. It is not a means of establishing the actual profitability of a product, customer, etc. This can be illustrated in the decision to choose the one that will produce the greater profit. For this purpose it is sufficient to compare the increase in profit resulting from each product. To do this, all aspects which are the same regardless of this decision can be ignored. This may include some items normally regarded as overhead costs, but will certainly not involve most of them. Similarly, direct costs which are the same for both can be ignored. Any incidental impact on other costs or sales of other products must be considered, however, if they differ as between the two which are the subject of the study. This is a very powerful but cheap and relatively simple technique which is much under-used.   Absorption Costing Absorption costing is a traditional method where the cost of the product must show the full cost of getting the product out. More costs are capitalized (held out of current expenses) and put into inventory with the product rather than being expensed when they occurred. This means that these costs do not become expenses until the inventory is sold. In this way, matching is more closely approximated (Martin, 2004). These costs will not impact the P&L statement until the individual products are sold (Barnes, 1992). Thus, we see that this decision about the costing approach affects inventory costs and the timing of profit, which explains the strong external interest in a company’s approach. Due to the absorption of fixed manufacturing overheads into the value of work-in-progress and finished goods stocks, the profit reported for a manufacturing business for a period is influenced by the level of production, and also by the level of sales (Coulthurst, 2000). If stocks remain at the end of an accounting period, it also follows that the fixed manufacturing overhead costs included within the stock valuation will be transferred to the following period. Technically, absorption costing is required for external reporting, although many companies apparently use something less than a pure full absorption costing system. Absorption costing method is most common for external reporting; however, it is also frequently used for internal reporting.   References Coulthurst, N. (2003). Absorption and marginal costing systems. Accountant  Zed. Available at  [http://accountantzed.tripod.com/technicalnotes/aprol2001abcosting.htm]. Accessed [04/02/04].   Martin, J. R. (2004). Cost accounting systems and manufacturing statements. Management accounting concepts, techniques, and controversial issues. Available at [http://www.maaw.info/Chapter2.htm]. Accessed [04/02/04].   Barnes, F. C. (1992). Management’s Stake in Improved Decision Making with Activity-Based Costing. SAM Advanced Management Journal, 57(3), 20+ 1992     Credit:ivythesis.typepad.com

HISTORICAL COST CONVENTION, MARGINAL AND ABSORPTION COSTING

HISTORICAL COST CONVENTION, MARGINAL AND ABSORPTION COSTING Historical Cost Convention Accounts are prepared under the historical c...

HUMAN RESOURCE ACCOUNTING AND ITS EFFECT ON ORGANIZATIONAL GROWTH

HUMAN RESOURCE ACCOUNTING AND ITS EFFECT ON ORGANIZATIONAL GROWTH Human Resource Accounting plays a major part in the development and growth of any organization.  It primarily identifies the aspects of the progress in the company.  This department determines the direction of the organization whether to move backward or to move forward in any industry.  The development of human resource accounting originated from the growing needs of the importance of human assets in the management organization.  It functions as the department that monitors the people who are involved in the organizational resources.  In addition, it is doing the monitoring of  the development, progress in assets and revenues of the company.  Another function of human resource accounting is to be involved in the improvement of company’s concepts and models in determining the cost and value of the employees in the company. The third function of this department is doing research and trial in the application of all the dimensions in the organization.  Human resource accounting is accountable for the deep studies on how to contribute more marketing plans and strategies that would help in the advancement of the organization and the people. The fourth function of HR Accounting is to apply the concepts and experiments into actual implementation in the company.  And, the last function is to apply new and innovative ideas and concepts as well as human resource accounting technologies into different management problems and situations.  (http://maaw.info/ArticleSummaries/ArtSumFla) Furthermore, human resource accounting also does the cost accounting for many corporations, investors, factories, natural resources, human resources and equipment and supplies for the entire organization.  However, as the time passes by, the development of different industries and the steady growth of various financial institutions further alter the traditional function of the managerial accounting. Together with these changes, came out the development of the behavioral accounting that has a more significant role in the growth and progress in any industry.  This aspect goes hand in hand with the human resource accounting as they both deal with the behavior of the people in the organization as well as looking over the entire effectiveness of the accounting methods, techniques and system in the organizational growth. The concept of behavioral accounting has become one of those aspects that the human resource management has been given focus.  According to the study,   the objective and goal of management accounting is to measure and reveal the data from the past, present and the perception of the organization’s socio-economic status.  In this way, the methods and the decision makings from all levels of socioeconomic actions will be improved, measured and monitored.  However, in some small entity businesses, management accounting is not really given that much significance unlike in the big companies.  Putting together the management accounting and human resource management is really a great help in any organization because it is greatly responsible in the understanding and analyzing the organization’s revenues, human resources, as well as it involves the most important asset of any organization and that is the people who joint together to work for the betterment of the business.  On the other hand, the tools management is being used by the accountants in a regular basis to be able to understand the modern trends and production growth effectively.  At the same time human resources also used people to help in managing sales performance and productivity as well as income generation of the company.  (http://findarticles.com/p/articles/mi_qa3682/is_199401/ai_n8716049/) Though, many people are confused of the relationship of the human resource and the management accounting.  As a matte of fact, they work together; the management accountants are concerned with the sales performance of the sales people in the organization.  And, one of its objectives is to direct the possible sales opportunities of the sales people as well as to increase the earnings of the company.  Of course, if the company earns more, the sales people will naturally benefit from it through big income and commissions.  Evidently, the entire organization and the whole staff will significantly benefit from the increase of revenues of every business.  Normally, management accounting theories and applications has been predominantly established to direct the cost related issues in the organization such as unit cost, supply cost budget allocations for projects, and many other accounting duties that are very essential in the effective operation of any industry.  The utmost responsibility of the management accounting is to determine the product profitability.  Therefore, it is safe to say that without the human resource management any business will be crippled, they will not run as effective as it does when it has people around that would take charge the workload in a regular basis. (http://www.articlesbase.com/human-resources-articles/challenges-faced-by-human-resource-managers-in-the-era-of-gloablization-995167.html) References: (http://maaw.info/ArticleSummaries/ArtSumFla) (http://findarticles.com/p/articles/mi_qa3682/is_199401/ai_n8716049/) (http://www.articlesbase.com/human-resources-articles/challenges-faced-by-human-resource-managers-in-the-era-of-gloablization-995167.html)       Credit:ivythesis.typepad.com

HUMAN RESOURCE ACCOUNTING AND ITS EFFECT ON ORGANIZATIONAL GROWTH

HUMAN RESOURCE ACCOUNTING AND ITS EFFECT ON ORGANIZATIONAL GROWTH Human Resource Accounting plays a major part in the development...

HUMAN RESOURCE ACCOUNTING AND ITS EFFECT ON ORGANIZATIONAL GROWTH

HUMAN RESOURCE ACCOUNTING AND ITS EFFECT ON ORGANIZATIONAL GROWTH

HUMAN RESOURCE ACCOUNTING AND ITS EFFECT ON ORGANIZATIONAL GROWTH Human Resource Accounting plays a major part in the development...

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