2. CPA Strat Mgmt Acc-Info for decision making (15%)

Management Accounting is at the heart of quality decision making becuase it brings the most relevant information and analysis to generate and preserve value due to the four global management accounting principles which are:

• Communicatation provides insight that is influential and the information is relevant.

• The impact on value is analysed and the stewardship builds trust

• Includes data, information, knowledge and graphs with a layer of intellectual analysis.

• Include financial & non financial performance, historical and forecasting information.

Organise these options into internal and external stakeholders

Groups:

(a) Internal

,

(b) External

• Fin & Admin: Expense analysis, invoicing error rate, days sales outstanding, days purchases outs

• Suppliers: long term supply, condition/quality upon reciept of product. Payment terms

• Sales & Marketing: Revenue & margin by product/ area/ store. Cust satisf scores, budgets/expense

• Board, Directors, SLT

• Community inc employment level, domestic economy & environmental protection

• Creditors/financiers: credit worthiness, covenants

• Trade unions: Future employment prospects, working conditions, income protection

• Investors: ROI, income streamseg dividends

• Govt: tax, finanical reporting compliance, industry specific compliance

• Customers: fair trading, quality, standard of compliance, warranties, after sales service/spare

• Production/logistics: expenses analysis, non-fin perform - cycle time, invntry TO, ontime deliv

What are the four stakeholder management objectives?

• Anticipate the information needs of the stakeholders and determine the likely value the accountant can contribute

• Assess stakeholders importance to the orgs function/performance and assess the power they wield.

• Improve the quality of information & promote a more cohesive and efficient approach

• Link profitability measure to capcity utilisation and interpret connections between different sources of information.

Organise these options into the right categories based on a decision to offshore manufacturing of shoes.

Groups:

(a) High power/low interest

,

(b) High power/high interest

,

(c) Low power/low interest

,

(d) Low power/high interest

• Employees who will be made redundant

• Govt regulators who will no longer be able to affect the organisation

• Financiers

• Customers concerned with continuity of supply

• Employees unaffected by the change

• Stock exchange & Shareholders

• Board of directors & SLT

• Geographic sales leaders, business unit managers

• Trade unions of redundant employees

• Sales & marketing team who need to keep customers satisfied.

• Local suppliers who will be replaced

• Purchasing & warehousing/logistics & HR

On her first day, a new Mgt Accountant has been advised by the CEO and CFO that the 6 new board members may not have adequate information to complete their role. What order should the advice be placed in that the Mgt Accountant will provide?

• What stakeholder group is each of the Directors in? (Exec Director or external Director?)

• Complete a Power Interest Grid to determine priority and level of effort required

• What are each Directors roles and responsibilies

• Provide a draft list of financial and non-fin reports to Directors for feedback.

• What information do they need to complete their role?

The management accountant is responsible for collating, analysing and interpreting information from

different sources and providing meaningful information to managers in a form they can readily use for

decision-making, and particularly to support the formulation and implementation of strategy. The 4 main information costs are?

• Gathering

  Storing & protecting

  Analysing & interpreting

  Presenting

• Input, processing, feedback & control

• Transaction processing, managment accounting, ERP (customer & production) and Decision support systems

• SaaS,

  MaaS

  PaaS

  WaaS

What important information is provided from each system?

• Competitor price & product comparison.

• Industry Associations

• Sales and profit by location and product

• Online

• Customer loyalty, lifetime value

  buying

• Finance system

• Ind benchmark, trends, online vs store

• CRM

• Profit/loss

  Staffing

  ROI

• ERP

Some limitations on different kinds of information include?

• Non uniform measures prevents comparisons

  Incomplete data

  Short term availability

  Collected for a different purpose, affecting quality.

• Primary

  Secondary

  Internal

  External

• Comparable

  Verifiable

  Timely

  Understandable

• Ethical

  Secure

  Private

  Confidential

Wang and Strong (1996) propose four elements for analysing information quality,

Groups:

(a) Intrinsic

,

(b) Contextual

,

(c) Representational

,

(d) Accessibility

• Value-added

• Amount of information

• Accuracy

• Format

• Compatibility

• Security

• Timeliness

• Completeness

• Coherence

• Interpretability

• Access

• Objectivity

• Reputation

• Believability

• Relevance