Advanced Management Accounting

ADVANCED MANAGEMENT
ACCOUNTING

Contents
INTRODUCTION...............................................................................................................................3
TASK 1.................................................................................................................................................3
P1 Purpose and presentation of financial information from stakeholder perspective.........................3
TASK 2.................................................................................................................................................5
P2 Evaluate the different type of accounting microeconomic techniques in application to support
organisation.......................................................................................................................................5
TASK 3.................................................................................................................................................6
P3 the concept of variance analysis and its importance for organizational budget control................6
P4 Analyse the actual and standard costs to control and correct variances........................................7
TASK 4.................................................................................................................................................8
P5 How external and internal factors changing the business environment impact upon management
accounting.........................................................................................................................................8
CONCLUSION..................................................................................................................................10
REFERENCES....................................................................................................................................11

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 strcurure 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
Form the past years it is observed that the rules and regulations regarding financial
representation has become more authenticated. Professional accounting organisations are
becoming the part of legalised accounting format and structure. ISAB, European commission
are authorities which provides a basis legal structure subject to presenting financial
information to stakeholders of organisation and outer parties. Accoutring and financial
presentation provides overview and vision of organisation that where the organisations stands
and where to go. It makes accounting credibility, tangibility and credibility of organisation.
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
Financial reposing is one of the essential aspect within the organisational context.
Financial information not only remain essential for internal use of business but also remain
important for stakeholders of organisation too. Stakeholders interest is also plays vital role in
presenting financial information and financial projection of an organisation. To provide
accurate information and data subject to financial growth and development of organisation is
one of the key responsibility and objective of financial presentation (Tan and Lau, 2012).
Presenting financial information for stakeholders is one of the typical and complex task for
managers and Accountants because it contains large responsibility and credibility subject to
presenting financial statements and financial reports. Any kind of mistake and
misrepresentation may lead organisations towards declining path and may lose the faith of
organization.

Building install communication and shared with stakeholder’s 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. Financial
representation may affect the region in terms of making the main aspects which remain
associated with the financial projection and credibility of organisation. 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;
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 and
the prospection 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 presented for stakeholders
Cash flow statement: this statement contains the information related to cash. How
much cash rotated during the year or a particular duration is recorded in this statement. This
information remains important for the investors subject to analyse the liquidity and flow of
cash for to give credits and manage the operations. Information which received form this
statement remains essential to analyse the requirement of cash in long term and short-term
perspective. This is not a single hand procedure it contains a logical and regional aspects
while preparing and presenting financial statements to stakeholders and managers.
Income statement: this is one of the main financial statement which helps to
understand the profitability of organisation. With the help of this statement stakeholders be
able to determine the profit and earning structure.
Financial position statement: this statement helps to analyse the financial
performance of organization. Information which are presented through this statement remain
essential for both the internal and external stakeholders of organisation. Bank financial
institutions and firms remain associated with analysing the aspects and managing the
resources with the help of financial position statement. This statement basically defines all
the assets and the liabilities in a single format (Humphrey and Miller, 2012).
Change in equity: this is also one of the essentials aspect in terms of analysing
change in equity of organisation. Financial projection and analysing the performance depends
upon capital structure of organization. These statements contains shareholders fund, reserve