ACCT703 Week 1

    Cards (31)

    • Strategic Management Accounting (SMA)
      An approach that supports the organisation's formulation and implementation of strategy and contributes to improving competitive advantage
    • Management Accounting Information (MAI)

      Information required by managers to create value and manage resources
    • Management Accounting Systems (MAS)
      • Produce information required by managers to create value and manage resources
      • Provide information on a regular basis
      • Provide estimates of costs of producing goods and services
      • Provide information for planning and controlling operations
      • Provide information for measuring performance
      • Provide ad-hoc information to satisfy managers' short- and long-term decision-making needs
    • Both Financial and Management accounting draw data from transaction-based accounting system
    • Management Accounting Information
      Focuses on the needs of managers within the organisation<|>Flexible in types of information provided<|>Influenced by managers' information needs and differences in production and service technologies<|>Used by senior managers through to operational managers<|>Emergence of 'big data'
    • Levels of management

      • Top level
      • Mid level
      • Operation level
    • Behavioural issues in MAS design
      Information may impact on individuals' behaviour, so management accounting systems may have both expected and unexpected outcomes
    • Motivation in MAS design

      A key purpose of management accounting systems is to motivate managers and employees to direct their efforts towards achieving the organisation's goals<|>Rewards and performance targets may be used to motivate individuals
    • Costs and benefits of MAS
      Costs include salary of accounting personnel, purchasing and operating computers, gathering, storing and processing data<|>Benefits include improved management decisions, more effective planning, improved operational efficiency at lower cost, improved customer and shareholder value
    • Strategy
      The direction that the organisation intends to take over the long term to meet its mission and achieve its objectives<|>Focus on ways to manage the organisation's resources to create value for customers and shareholders
    • Competitive advantage
      Advantages that a business may have over another that are difficult to imitate, achieved through cost leadership or product differentiation
    • Cost leadership
      • Economies of production, Superior process technologies, Tight cost control
    • Product differentiation
      • Superior quality, Customer service, Delivery performance, Product features
    • Strategic management accounting
      Supports the organisation's formulation and implementation of strategy<|>Contributes to improving competitive advantage
    • Major decisions in formulating strategies
      • In what business will we operate?
      • How should we compete in that business?
      • What systems and structures should we have in place to support our strategies?
    • Levels of Strategy
      • Corporate-Level Strategy
      • Business-Level Strategy
      • Operational Level Strategy
    • Corporate strategy
      Choices about the types of businesses<|>How best to structure and finance the organisation
    • Business (or competitive) strategy
      The way a business competes within its chosen market (Cost leadership, Product differentiation)<|>Distinct business strategies for each business unit
    • Operational level strategy
      Involves planning and managing the implementation of strategies<|>Concerned with how different parts of the organisation deliver the strategy in terms of managing resources, processes and people
    • Strategic planning involves corporate strategy decisions and draws on management accounting information
    • Managers share responsibility for implementing strategies
    • Management accounting information is used to link long-term plans to the budgeting system and compare actual outcomes to budgets and other targets
    • Strategic QCT Triangle
      Strategic objectives include elements of both positioning and distinction<|>Firm must compete simultaneously on three dimensions: quality, cost, and time
    • Quality dimension
      A 'total experience' comprising features, performance, service, and other aspects
    • Cost dimension
      The resources expended by producers and support organisations (e.g. distributors)<|>Consider the whole 'value chain'<|>Also, the 'cost of ownership' (to the purchaser)
    • Time dimension
      Product available when customer needs it<|>Rapid innovation<|>Rapid transfer to market<|>Production cycle time
    • Attributes of a good MAS
      • Technical: enhances understanding of what is measured; provides relevant info for decisions
      • Behavioural: motivates; encourages actions consistent with organizational objectives
      • Cultural: supports/creates shared cultural values, ethics, beliefs and mindsets in an organization (and society)
    • Strategically-Useful Management Accounting
      Helps to accomplish strategic objectives by linking managers' daily actions to organisational objectives, enabling managers to involve the whole supply chain in achieving objectives, and taking a long term view
    • Management accounting supports managers in enhancing customer value and shareholder value
    • Contemporary management accounting techniques have developed to support new organisational structures, systems and practices, as a response to a rapidly changing business environment
    • The QCT triangle provides a concrete framework for the attribute TBC triangle and provides criteria by which to evaluate and choose between alternative management-accounting measures, methods, and systems
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