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

• Board, Directors, SLT

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

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

• Community inc employment level, domestic economy & environmental protection

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

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

• Investors: ROI, income streamseg dividends

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

• 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

• Creditors/financiers: credit worthiness, covenants

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

• Financiers

• Employees who will be made redundant

• Geographic sales leaders, business unit managers

• Purchasing & warehousing/logistics & HR

• Employees unaffected by the change

• Customers concerned with continuity of supply

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

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

• Trade unions of redundant employees

• Local suppliers who will be replaced

• Board of directors & SLT

• Stock exchange & Shareholders

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?

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

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

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

• What information do they need to complete their role?

• What are each Directors roles and responsibilies

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?

• Profit/loss

  Staffing

  ROI

• CRM

• Competitor price & product comparison.

• Industry Associations

• Customer loyalty, lifetime value

  buying

• Online

• Ind benchmark, trends, online vs store

• ERP

• Sales and profit by location and product

• Finance system

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

• Security

• Timeliness

• Interpretability

• Reputation

• Compatibility

• Access

• Relevance

• Believability

• Format

• Amount of information

• Value-added

• Coherence

• Accuracy

• Completeness

• Objectivity