Advanced Management Accounting Essay

ADVANCED MANAGEMNET
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Purpose and presentation of financial information from stakeholder perspective............1
TASK 2............................................................................................................................................3
P2 Evaluate the different type of accounting microeconomic techniques in application to
support organisation...............................................................................................................3
TASK 3............................................................................................................................................7
P3 the concept of variance analysis and its importance for organizational budget control. . .7
P4 Analyse the actual and standard costs to control and correct variances............................9
TASK 4..........................................................................................................................................11
P5 How external and internal factors changing the business environment impact upon
management accounting ......................................................................................................11
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Management accounting is become a crucial element subject to managing and operating
the business. This is considered as an internal part and section of business which assist mangers
and accountants to manage departments and section of organisation, this report is prepared to
understand the dynamics of advanced management accounting system subject to operating and
management of business operations (Watts and McNair-Connolly, 2012). Purpose and
presentation of financial information from stakeholders prospective defined in this context.
Various type of accounting microeconomics techniques in application to assist organisational
structure explained briefly.
Variance analysis and its importance subject to making budgets elaborated in
organisational context. Actual and standard cost is defined in this context with the environmental
impact upon management accoutring also defined in this context. How external and internal
factors changing the business environment impact upon management accounting.
TASK 1
P1 Purpose and presentation of financial information from stakeholder perspective
In organisational context stake holders are the persons which retain significant interest in
the growth and development of organisation. These are the parties which has some certain needs
and requirement in terms of financial and non-financial interest. Putting the interest of
stakeholders first is one of the essential retirement of organization. Because these are the person
who only remain responsible for sustainable development and growth of organisation.
Presentation of financial information become more important and crucial task for organisations
for stakeholders. Stakeholders can be found in various form such as share
Purpose of financial information and presentation
Building communication and shared with stakeholders organisation is one of the key
objective of financial representation. Making financial records and presenting financial
information is also one of the key aspect in organisational context. To attain stake holder’s
interest and make accounting viability of the organisation in effective and optimum manner.
Purpose of financial representation can be bifurcated in following aspect’s;
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To Build credibility: there are to major characteristics remain associated with reporting
task, first is qualitative and second is quantitative. These concepts remain based upon concepts
in respect of presenting financial information to stakeholders of organisation (Jakobsen, 2012).
To Make accoutring structure viable: This is also one of the major purpose of
presenting financial reports in front of internal stake holders. It helps to make the organisation’s
structure flexible by gathering interest of employees and managers of organization.
Reliability: It contains the observation in respect of presenting information by following
all the legal structure, legislation and terms. Which policies and structure is being used is
disclosed in front of stakeholders.
Intangibility: This objective remains associated with representing information and
details in terms of complex business structure which contains some technical knowledge and
subject.
Financial information from stakeholders perspective
Investors: these information helps stakeholders to analyse the liquidity position and how
much flow generated by activities. This helps to make investment plan for better execution.
Financial representations is systematic procedure that contains a logical and regional aspects
while preparing and presenting financial statements to stakeholders and managers. This
information remains important for the investors subject to analyse the liquidity and flow of cash
for to give credits and manage the operations. Financial projection and analysing the
performance depends upon capital structure of organization. Investors mainly analyse the
financial position, capital structure, reserves and surplus ratio and return on investments.
Senior management: Financial information is required to justify the financial position of
business to senior management. It helps to determine the change in equity as the base of share
capital, reserve and surplus. How much control and ownership is distributed in the hands of
members and share holders is required to determine for stakeholders. Presenting financial
information for stakeholders is one of the complex task for senior managers and Accountants
because it contains large responsibility and credibility subject to presenting financial statements
and financial reports. Their main perspective mainly associated with presenting true and fair
report to external stakeholders and other associated parties.
Banks: The overall performance is presented in the form of financial position of
organisation. financial institutions and firms remain associated with analysing the requirement of
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