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Advanced Management Accounting - Assignment

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Added on  2020-12-30

Advanced Management Accounting - Assignment

   Added on 2020-12-30

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ADVANCEDMANAGEMENTACCOUNTING
Advanced Management Accounting - Assignment_1
Table of ContentsINTRODUCTION...........................................................................................................................3LO 1.................................................................................................................................................3Purpose of developing & presenting financial information........................................................3LO 2.................................................................................................................................................6Management accounting techniques to support organisational performance.............................6Advantages and disadvantages of different types of variances.................................................10LO 4...............................................................................................................................................12Impact of Internal & External business environment on management accounting...................12CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................17
Advanced Management Accounting - Assignment_2
INTRODUCTIONManagement Accounting is an activity of preparing & disclosing financials & managerialreports to stakeholders of company so that they can make important decisions related investmentand expansion. Management accounting also benefits companies in disclosing financialsinformation of company to its stakeholders and projecting future financial report of company.Below report explains purpose behind development of financial information to external &internal users of company. Further, this report includes reasons & benefits of presentingfinancials reports to stakeholders of company. Furthermore, this report elaborate different typesof management accounting techniques which helps business firms in enhancing theirperformance & profitability in future. Moreover, below report explains meaning of businessenvironment. At last, this report includes impact of internal & external business environmentalfactors on business entities and management accounting.LO 1Purpose of developing & presenting financial informationFinancial Information contains all the necessary details related to business operations oforganisations. According to (Otley, 2016), Financial information is essential for eachorganisation because without financial information a company cannot prepare financialstatements. Thus, Purpose of financial information is to present financial position of a businessentity with the help of Balance Sheet, Cash Flow Statement and Income Statement tostakeholders of company. Tesco is a multinational retailer which offer variety of grocery itemsand other general merchandises in many countries across the globe by establishing superstore,supermarket and hyper market. Company also disclose its financial information to individualswith the help of Annual Reports and its online website.AS per the view of (Gooneratne and Hoque, 2016), Financial Information helpsstakeholders in making various necessary decisions related to investment & resources allocationwhich results in profit maximisation. Because, if detailed information related to assets andliabilities are given in financial statement than manager are able to make decisions related tofurther investment and expansion of their business. Further, information related to past yearsprofits benefits a mangers in making decision related to development and introduction of newproduct line. So, it is necessary for accountant of Tesco to present its financial information.
Advanced Management Accounting - Assignment_3
Further, this information should be presented in prescribed form,at given by authority of UnitedKingdom. Balance sheet of a company required to be presented by classifying assets andliabilities, Statement of Cash Flow is prepared by classifying different activities such asOperating, Financing and Investing. Whereas Income Statement is required to be presented bydifferentiating operating and non operating expenses and incomes.On the other hand, according to (Hayward and et.al., 2017), stakeholders such ascompetitors and suppliers sometimes have a negative impact on operations of company. Thus,Financial information has different importance for each stakeholders.Stakeholders are individuals who are having interest in business operations of company.Stakeholders affects profits, market share and customer base of company. These individualshelps firm in achieving long term success and growth in future. Without Stakeholders Tescocannot run its operations and maximise its brand image. Further, companies stakeholders areBoard of Directors, Shareholders, Banks, Customers, Creditors and Competitors. All thesepeople are having interest in gaining information of financials of company.Board of Directors (BoD) - Board of Directors of Tesco includes a group of individualswho regulate & control operations of company. These people form guidelines and regulations forsuccessful running of operations of firm and they also manage their subordinates. Theseindividuals also makes various decisions related to corporate & management so that problems offirm can be resolved(Minnis and Sutherland, 2017). Board of Director's of Tesco evaluate & analyse all the financial information and makevarious decisions in the favour of managers and shareholders of firm. Thus, Board of Directorsalso stand for shareholders. Financial information helps BoD in making decisions related toDividend Distribution. If company earn sufficient profit in last year than only BoD can decideas to how much amount of dividend is distributed among companies shareholders andinformation about profits its constructed from Income Statement, Balance sheet and Cash FlowStatement. Thus, this is the reason Board of Directors of Tesco shows their interest in FinancialInformation. Board of Directors also evaluate Financial Information with the purpose of determiningoption policy and amount of compensation of employees. Board of Directors also helps companyin setting up its goals & objectives for future is cannot be done if current financial position is not
Advanced Management Accounting - Assignment_4

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