...Management Accounting and Financial Accounting Monitoring and controlling the business financial performances is imperative for the success of the business operations and its profitability. Management and financial accounting have tools that can help the company in different ways when trying to reach their goals. Financial accounting is the business tool that provides reports to the stakeholders, creditors, the government, and other individuals outside the organization and is based on past activities and historical results (Atkinson, Kaplan, Matsumura, & Young, 2006). Financial accounting summarizes information that concerns the whole company, reports are prepared on a regular basis, each report most follow specific guidelines in order to be consistent and it focuses on accuracy. Management accounting in the other hand is the business tool that provides financial and nonfinancial information to internal members of the business such as managers and employees. Management accounting helps internal members of the company with profit planning and budgets. It focuses in making current and future decisions in order to better the company. The reports provided by management accounting are prepared when needed and may not be required in a regular basis. Management accounting helps the company’s Chief Executive Officer (CEO) with controlling the company’s performance by measuring outputs produced and their efficiency. It helps by controlling expenses and costs and by organizing resources...
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...Personal financial decisions may also involve paying for a loan, or debt obligations. The six key areas of personal financial planning, as suggested by the Financial Planning Standards Board, are:[1] 1.Financial position: is concerned with understanding the personal resources available by examining net worth and household cash flow. Net worth is a person's balance sheet, calculated by adding up all assets under that person's control, minus all liabilities of the household, at one point in time. Household cash flow totals up all the expected sources of income within a year, minus all expected expenses within the same year. From this analysis, the financial planner can determine to what degree and in what time the personal goals can be accomplished. 2.Adequate protection: the analysis of how to protect a household from unforeseen risks. These risks can be divided into liability, property, death, disability, health and long term care. Some of these risks may be self-insurable, while most will require the purchase of an insurance contract. Determining how much insurance to get, at the most cost effective terms requires knowledge of the market for personal insurance. Business owners, professionals, athletes and entertainers require specialized insurance professionals to adequately protect themselves. Since insurance also enjoys some tax benefits, utilizing insurance investment products may be a critical piece of the overall investment planning. 3.Tax planning: typically the income...
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...Implications and Consequences: +Provides an opportunity for earnings management. + Reflect the current period’s true and fair results. -Requirements for annual impairment testing of goodwill and other non-amortised intangible assets. -Difficulties surrounding the identification of a cash-generating unit. -Challenges in projecting cash flows and estimating various assumptions for the testing of value in use. Kolb’s TEL with Paul’s Critical Thinking Components: IAS 36 Impairment of assets-assess of key features Objects/Events: To prescribe the procedures that an entity applies to ensure that its assets are carried at no more than their recoverable amount. An asset is carried at more than its recoverable amount if its carrying amount exceeds the amount to be recovered through use or sale of the asset. If this is the case, the asset is described as impaired and the Standard requires the entity to recognise an impairment loss. To also specifies when an entity should reverse an impairment loss and prescribes disclosures. (IASC Foundation Education) Worldviews: Institutional Investor: likely to know the long term stability of business by reviewing the current true worth of assets. Standard Setters: To ensure that assets are carried at no more than their recoverable amount, and to define how recoverable amount is determined. (Deloitte Touche Tohmatsu, 2009) Assertions: Option2 =the reversal of an impairment loss...
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...WORKSHOP ON FINANCIAL MANAGEMENT AND ACCOUNTING PROCEDURES IN NGO Broad topics to be covered Financial Management Accounting & Book Keeping Tally.ERP9 useful for NGO TDS and IT FCRA Auditing Funders Requirement Role of Finance Team in NGO September 8 to 10, 2015 Venue- Samarthan Training Centre, 36, Green Avenue, Behind Sagar Campus, Kolar Road, Chuna Bhatti, Bhopal MP 462016 WORKSHOP ON FINANCIAL MANAGEMENT AND ACCOUNTING PROCEDURES IN NGOS Venue: Samarthan Training Centre, Bhopal 8th-10th September 2015 We are pleased to announce a detailed workshop on Financial Management, Accounting procedures and legal compliances applicable to an NGO. Design & content: The workshop is conducted for providing detailed training of NGOs finance staff on the financial management aspects. It shall cover accounting processes, consolidation of books and training on accounting software-Tally ERP9.Pratical assignment based learning shall be taken up in the area of legal compliances – TDS, Income Tax etc. Topics covered: Session Conducted by Day 1 Introduction and Objective of training Financial Management for NGOs- needs Process and records Planning, Budgeting, Monitoring, Procurement, Auditing Day 2 Accounting & Book Keeping Functions of Tally.ERP9 useful for NGO accounting Group work Day 3 Interface between NGO and auditor TDS- rules, payments, filing of challan & return Interaction with the...
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...1. Identify the company and the ethical dilemma. Tyco International is a company in Switzerland that operates out of the US in New Jersey. Tyco International is made up of two departments’ fire protection and security systems. The issue with Tyco International is that the companies money was given to people that were unauthorized to have I which means that theft was happening with in the company 2. Analyze the key elements in the situation: a. Who benefited or was harmed? There were three people that benefited from this Mark A. Belnick, Mark H. Swartz, and Dennis Kozlowski How did they benefit? These three men benefited by starting a program that they benefited in the form of using Tyco stock, cash bonuses and forgiveness of loans and earning about 150 million between all three of the men. How were they harmed? The shareholders were the main people that were hurt were the shareholders were affected and harmed because there were not getting the right finances or accurate reports given to them such as annual reports because of misappropriated funds. This is called getting a cook book. b. What rights or claims were violated? The Security and Exchange Act of 1934 which is a law that governs secondary trading when it comes to bonds, debentures, and stocks. Also the Securities Act of 1933 which protects the offers and sells of securities and possibly part of RICCO was violated. c. What specific interests were in conflict? Mark H. Swartz's role as CFO requires him...
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...Accounting: Text and Cases Managerial Accounting Anthony, Hawkins and Merchant 13th Edition Garrison, Noreen and Bewer 13th Edition Management Accounting 1 2 Because… 3 4 5 6 ! " # 7 Chapter 15 The Nature of Management Accounting 8 Learning Agenda Describe the differences between financial and management accounting Measurement used in management accounting system Textbook problem exercises 9 Differences Between Financial and Managerial Accounting Financial Accounting 1. Users 2. Time focus 3. Verifiability versus relevance 4. Precision versus timeliness 5. Subject 6. Requirements External persons who make financial decisions Historical perspective Emphasis on verifiability Emphasis on precision Primary focus is on the whole organization Must follow GAAP and prescribed formats Managerial Accounting Managers who plan for and control an organization Future emphasis Emphasis on relevance for planning and control Emphasis on timeliness Focuses on segments of an organization Need not follow GAAP or any prescribed format 10 Accounting Differences Financial External focus Whole organization Historical Quantitative Monetary Verifiable GAAP Formal recordkeeping Managerial Internal focus Segments or divisions Current/projected Quantitative/qualitative Monetary and nonmonetary Timely/reasonable estimate Benefits exceed costs Formal and informal recordkeeping 11 Management vs. Financial accounting ...
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...MANAGEMENT ACCOUNTING: AN OVERVIEW Learning Objectives Distinguish between managerial & financial accounting. Understand the evolution of management accounting. Explain about the IFAC model. Understand how managers can use accounting information to implement strategies. Explain about Relevant Lost & Relevant Regained. 2 Learning Objectives Distinguish between managerial & financial accounting. Understand the evolution of management accounting. Explain about the IFAC model. Understand how managers can use accounting information to implement strategies. Explain about Relevant Lost & Relevant Regained. 3 Accounting System (accumulates financial and managerial accounting data) Managerial Accounting Information for decision making, and control of an organization’s operations. Internal Users Financial Accounting Published financial statements and other financial reports. External Users Managerial Accounting Users of information Managers within company Regulation Financial Accounting Interested outside parties Required. Must comform to Not required because for internal GAAP which is regulated by use only FASB and SEC. Basic accounting system plus Almost exclusively from the Source of Data various other sources basic accounting system Reports often focus on subunits. Reports focus on the enterprise Nature of Reports Based on a combination of in its entirety. Based on and...
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...Financial accounting refers to accounting and oversight of the companies have completed a comprehensive system of campaign funds, that the external economic stakes of investors, creditors and the government departments concerned and enterprises to provide economic information of the financial position and profitability as the main target carry out economic activities. Financial Accounting is an important foundation work of modern enterprises, through a series of accounting procedures, provided useful information for decision-making, and actively participate in management decisions, improve the economic efficiency of enterprises, service in the healthy and orderly development of the market economy. Management accounting, also known as "internal report accounting", it means: to present and future campaign funds, to enhance economic efficiency for the purpose of internal managers provide the scientific basis for management decision-making as the goal of economic management activities. Popular financial accounting is the total company accounting processes, cost accounting is the part of management accounting is a financial accounting calculation based on future projections of the company. In economic management, accounting work is an important part of one is closely linked to the effective operation of economic and accounting work. Comparison of management accounting and financial accounting for the study of accounting work in-depth research and analysis. Overview of management...
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...1.0 Managerial Accounting Managerial accounting is a field of accounting that provides economic and financial information for managers and other internal users (Weygandt, Kimmel & Kieso, 2012). Managerial accounting is an important internal business function. Many companies use managerial accounting to record and report their internal financial information. There are differences between financial accounting and managerial accounting. Financial accounting focuses on preparing financial reports and releasing information to the public while managerial accounting focuses on preparing financial information for internal review and decision making. Managerial accounting offers several important tools for measuring the company operational performance. Common types of managerial accounting include job costing, process costing, activity-based costing and also budgeting. 2.0 Benefits of Managerial Accounting Practices Towards Business Organization Create Competitive Advantage Management accounting can help businesses create a competitive advantage. Many business owners focus on creating consumer goods with lowest-priced and highest-quality product in the market. The ability to review financial information through managerial accounting is important in creating a financial competitive advantage. In 2010, Maxis Berhad wins excellence award in management accounting from the national award for management accounting (NAfMA). One of the winning criteria is the company ability to create...
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...Financial Accounting: • Communicates economic information to individuals and organizations that are external to the direct operations of the company • Stresses the form in which it is communicated • Is based on historical information It is about the balance sheet, the income statement, the financial statement of the company (the notes). The stakeholders (shareholders, clients, suppliers, the government, employees, etc.) are interested by the financial statements. Financial accounting is mainly developed for external users. What can we find in a balance sheet? What does it tell us? The past financial performance of the company. The income statement gives us an overview of the expenses and revenues of the companies, their use, and more generally, what is the wealth of the organization. Another aspect, when we prepare a balance sheet, an income statement, there are legal constraints, rules, general principles that have to be followed. Everything is strictly regulated, there are very strict rules. I.e.: the Generally Accepted Accounting Principles (GAAP): Belgian GAAP, etc. Management Accounting: Assumption: a CEO must decide whether or not he’ll produce a new product. Where will he find the required information (the price of the product, etc. and more generally, all the necessary information)? Are the financial statements helpful in this case? No, they don’t. Other example: are we going to outsource part of our production in another country...
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...The current issue and full text archive of this journal is available at www.emeraldinsight.com/1176-6093.htm Research in management accounting innovations An overview of its recent development Nur Haiza Muhammad Zawawi Department of Accounting and Finance, University of Malaysia Terengganu, Kuala Terengganu, Malaysia and School of Accounting, La Trobe University, Melbourne, Australia, and Management accounting innovations 505 Zahirul Hoque School of Accounting, La Trobe University, Melbourne, Australia Abstract Purpose – The purpose of paper is to present a review of the literature on management accounting innovations (MAIs). Specifically, it explores recent developments in research on MAIs and offers suggestions for future research. The review differs from existing reviews by its specific focus on MAIs and the recent time period covered. In this paper, MAIs refer to the adoption of “newer” or modern forms of management accounting systems such as activity-based costing (ABC), activity-based management, time-driven ABC, target costing, and balanced scorecards. Design/methodology/approach – The paper presents a review of findings from journal articles published in 22 notable accounting journals. Findings – The review finds that research on MAIs has intensified during the period 2000-2008, with the main focus on exploring the extent to which a host of organizational and environmental factors influence the implementation and use of MAIs in organizations. In addition, research...
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...Introduction Managerial accounting is concerned with providing information to managers- that is, to those who are inside an organization and who direct and control its operations. Managerial accounting can be contrasted with financial accounting, which is concerned with providing information to stockholders, creditors and others who are outside an organization (Garrison and Noreen, 1999). Managerial accounting information includes: * Information on the costs of an organization’s products and services. For Example, managers can use product costs to guide the setting of selling prices. In addition, these product costs are used for inventory valuation and income determination (Horngren and Foster, pp. 2). * Budgets: A budget is a quantitative expression of a plan. * Performance reports: These reports often consist of comparisons of budgets with actual results. The deviations of actual results from budget are called variances (Horngren and Foster, pp. 3) * Other information which assist managers in their planning and control activities. Examples are information on revenues of an organization’s products and services, sales back logs, unit quantities and demands on capacity resources (Kaplan and Atkinson, pp. 1). Managerial Accounting Practices around the World Traditional managerial accounting systems are mainly designed to measure the efficiency of internal processes. In the 1980’s, traditional managerial accounting practitioners were heavily criticized...
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...© 1998 American Accounting Association Accounting Horizons Vol. 12 No. 4 December 1998 pp. 363–373 Financial Information and Quality Management—Is There a Role for Accountants? Leif M. Sjoblom Leif M. Sjoblom is a Professor at the International Institute for Management Development. SYNOPSIS: Different opinions exist with respect to the usefulness of financial information for operational decision making. While academics encourage the provision of accounting information on quality, few companies provide it. This article explores the usefulness (or lack thereof) of Cost of Quality (COQ) and quality-related financial information through the use of a survey and informal discussions and interviews with quality managers. Financial information can be used to flag quality problems, to select and prioritize quality improvement projects and to choose corrective action. The results suggest that financial information has a limited role in supporting these operational decisions. The limitations of current COQ systems, and the lack of relevant, reliable and timely financial information, are among the reasons cited for not using COQ. However, there is a perceived need for additional financial reporting in order to attract the attention of top management and to motivate managers. In order to make COQ more relevant to practitioners, future research must not only focus on improving and disseminating best practices, but also on the multi-disciplinary implementation process. Data Availability:...
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...AN EMPIRICAL INVESTIGATION OF THE EVOLUTION OF MANAGEMENT ACCOUNTING PRACTICES by Magdy Abdel-Kader University of Essex and Robert Luther University of Bristol WP No. 04/06 October 2004 Address for correspondence: Magdy Abdel-Kader Department of Accounting, Finance and Management University of Essex Colchester Essex CO4 3SQ UK E-mail: mabdel@essex.ac.uk 1 An Empirical Investigation of the Evolution of Management Accounting Practices Magdy Abdel-Kadera and Robert Lutherb a: Department of Accounting, Finance and Management, University of Essex, Wivenhoe Park, Colchester, CO4 3SQ (Correspondence address) b: Bristol Business School, U.W.E., Bristol, BS16 1QY The authors are grateful for the constructive comments of participants at the EIASM conference on New Directions in Management Accounting: Innovations in Practice and Research, December 2002, Brussels. Financial support from the Chartered Institute of Management Accountants is acknowledged with gratitude. 2 An Empirical Investigation of the Evolution of Management Accounting Practices Abstract This paper investigates and reports on the status of management accounting practices in UK industry. The analysis operationalises the IFAC statement on Management Accounting Concepts and its description of the evolution of management accounting. The results, based on responses from 123 practising management accountants, suggest that the management accounting employed in many UK industrial companies is not...
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...AND MANAGEMENT ACCOUNTING IN A GLOBAL BUSINESS ENVIRONMENT MULTIPLE CHOICE 1. In comparing financial and management accounting, which of the following more accurately describes management accounting information? a. historical, precise, useful b. required, estimated, internal c. budgeted, informative, adaptable d. comparable, verifiable, monetary ANSWER: c EASY 2. Management and financial accounting are used for which of the following purposes? Management accounting Financial accounting a. internal external b. external internal c. internal internal d. external external ANSWER: a EASY 3. One major difference between financial and management accounting is that a. financial accounting reports are prepared primarily for users external to the company. b. management accounting is not under the jurisdiction of the Securities and Exchange Commission. c. government regulations do not apply to management accounting. d. all of the above are true. ANSWER: d EASY 4. Which of the following statements about management or financial accounting is false? a. Financial accounting must follow GAAP. b. Management accounting is not subject to regulatory reporting standards. c. Both management and financial accounting...
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