intro

• Revenue - costs = profit
• business exist To provide a product/service to society, to offer employment, to utilise resources in an efficient manner, to maximise shareholders wealth 
• How are businesses organised? 

  Owners (e.g shareholders), managers, lenders, suppliers 
• Nearly all businesses that involve more than a few owners/employees are set up as limited companies. Finance will come from owners in the form of direct cash investment to buy shares, finance can also come from lenders as well as suppliers providing goods and services on credit 
• In larger limited companies the owners (shareholders) tend not to be involved in daily running of business instead they appoint a board of directors they set the overall direction for business, monitor and control activities and communicate with shareholders and others connected to business.
• Each board has a chairman who is responsible for smooth running of the board. As well as a chief executive officer (CEO) who leads team and is responsible for day to day running
• Why are large businesses not managed by a single unit by just one manager?

  Sheer volume of activity, certain operations may require specialised knowledge, geographic considerations
• Establish mission, vision and objectives- may be set out in mission statement, vision statement is what does firm want to achieve, objectives should be clear targets or outcomes which are challenging and achievable
• Mission statements 

  A statement that defines the essence or purpose of a company- what it stands for 

  I.e what broad products or services it intends to offer customers 
• Position analysis- to discover how business is placed in relation to its environment carried out in context, approached within the framework of business strengths, weakness, opportunities and threats. SWOT analysis identifies business strengths and weakness as well as opportunities provided the threats posed by external environment
• Changing business landscape- growth of service sector, emergence of new industries, growth of e-commerce, automated manufacturing, lean manufacturing, greater production innovation, growth of outsourcing activities, faster response times
• What is management accounting 

  The provision of useful information to help management plan, control and make decisions. Cost of producing information is justified on the grounds that managers believe it is useful
• Global management accounting principles

  Developed by the american institute of certified public accountants and uk based chartered institute of management accountants

  Influence (over decisions and ultimate outcomes), relevance, analysis, trust (high ethical standards)
• Producing management accounting information can be costly, the costs however are often difficult to quantify. Salaries are not usually a problem but are only part of total cost; other parts include time spent on analysing and interpreting information.
• Management accounting information system- identifying and capturing relevant information, recording information in systematic manner, analysing and interpreting information collected, reporting information in manner which suits needs of manager