What is the definition of accounting?
The process of identifying, measuring and communicating financial information about an entity.
What is the contingency approach?
- Describes the process of creating a control system for a given set of purposes.
- Control systems depend on: The external environent of the business, the production technology, the size of the organization and the corporate strategy
What is strategic management accounting?
- Identification, measurement and communication of cost data.
- In situations, where the organization is being judged against the performance of competitors
What is the management functions?
- -Immediate future
- -Long term
- eg. sales, producation capital expenditure
- Decision making
- -About resources
- -About activities
- -Financial matters, particularly cost
- -Impact on employees
- -Impact on competitors
- -Is and outcome in accordance with the initial plans and objectives?
- -Plans include costs and profit
- -Timely, relevant and accurate information
- -Cost measurement
- -Effective communication
- -Organizational structure
- -Responsibility and authority
Functions of management accounting?
- Directing attention
- who should take action?, who is responsible?
- Fairness and timeliness, responsibility, regognize achievements, demonstrate accountability
- Keeping score
- How much? how many?
- Record keeping
- Completeness and fairness (matching cost to itmes, time periods)
- Solving problems
- Why did that plan go well? Why did that action fail?
- Base for understanding the problem