Advanced Management Accounting: Doc

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Advanced ManagementAccounting
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1. Purpose and presentation of financial information for various stakeholder....................1M1. Need of presenting financial information.......................................................................3D1. Evaluation of financial information.................................................................................3TASK 2............................................................................................................................................4P2. Use of different accounting microeconomic techniques..................................................4M2. Value and importance of a wide range of accounting techniques.................................6D2. Evaluate the application of different accounting techniques...........................................6TASK 3............................................................................................................................................7P3. Concept of variance analysis in its importance................................................................7P4. Actual and standard costs to control and correct variances.............................................8M3. Advantages and disadvantages of different types of variances....................................10TASK 4..........................................................................................................................................10P5. External and internal factors changing the business......................................................10M4. Impact of different types of change..............................................................................12D3. Critically evaluate the impact of changes.....................................................................13CONCLUSION..............................................................................................................................13REFERENCES.............................................................................................................................14
INTRODUCTIONIn today's era every organization wants to decrease costs while preserving product qualityin the current competitive situation, but for organisation it is very hard in the practical term toattain the desired results (Andriof and Waddock, 2017). Advance management accounting isindeed a fundamental reporting specialist element that fits with the company's managementstructure so that formulating of valuable strategic and policies can be prepared as it’s easy tomake any future decision. It helps company to make effective procedures and potential decision-making requirements by accounting of information more vibrantly as well as sincerely. In orderto better understand the concept of advance management accounting ABC Ltd has been selectedthat is planning to expand its business in different part of world thus its manager requires deepknowledge about management accounting systems, processes, principles, fundamental tools andtechniques.In this report, purpose and presentation of financial information, use of differentaccounting techniques, concept of variance analysis and its importance to control budget,actualand standard costs to control and correct variances are discussed. In addition, external andinternal factors changing the business environment impact are being defined in this projectreport.TASK 1P1. Purpose and presentation of financial information for various stakeholder.Financial information are the company's financial statements such as profit and loss,balance sheets and cash flow that aid management and shareholder to make different decisionsaccording to their requirement (Bhimani, 2019). This information is extremely seen as aconstitutional necessity by the legislative body of the corresponding company that need tocomply with reporting norms. There are number of stakeholder that have interest within thebusiness of ABC Ltd, some of these are defined below:Internal stakeholder:The stakeholder those are part of internal management of ABCLtd and are the one to whom information is directly delivered. They have the right to get thedetail information so that fair and transparent statements which support in creating policies andstrategies to conduct the business and making sure that any uncertain activity must not be1
included that may lead to wrong interpretation of crucial statements. Some of these are discussedbelow:Employees:They seem to be the most significant business component, because they arethe elements that assist a business to grow significantly. The aim of financial information foremployees is to guarantee that the entities have a good continued financial health becausecompany's health is linked directly to its employee and mutual compensation, bonuses, jobsecurity, development and learning interests. For example, income statements give detailinformation about salary deduction, fringe and other additional benefits so that they can ensureabout their future growth in respective firm.Manager:These are the people who are able to manage and control all tasks andoperation of a company. For them, financial data is really essential and they can schedule toimprove the company's financial output. Each and every document is important for manager asthey require detail information for making policies and strategies that will be beneficial for ABCto expand their business and attain competitive advantage (Burns and Vaivio, 2011). They makeuse of financial information in order to determine any weak areas of operation in ABC Ltd andaccomplish managerial task effectively.External stakeholder:All outside individuals investing their cash, providing credit andbuying goods or services are regarded as external stakeholders. They are indirectly related withthe different internal decision of company. Financial information like paid-up capital, andproposed capital, interest on debenture and return on investment are several important datasubmitted throughout balance sheet to external stakeholders.Investors:The investor requires financial data of the enterprise because it providesmoney to the enterprise for the development of its activities and wants to earn a return, that canbe obtained when company is performing well in capital markets. With the support of financialinformation, they ensure to have best earning on equity, bonus share, interest on debt capital.Their aim in searching for economic information so that they can evaluate the companyinvestment opportunity. The financial report presents earnings per share, rate of growth andpatterns to expound quality data for lenders.Creditors:Banks, financial organizations, investors and loan services from corporate thatprovide loans and financing progress are some important creditors. The aim of creditors fromfinancial data is to determine that company performs well, ensuring both repayment ability and2
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