Management Accounting and Control Research

This assignment details various research papers on management accounting and control. The papers cover topics such as the evolution of management accounting, innovation in management accounting, and the role of management accounting in small and medium-sized enterprises (SMEs). Additionally, it includes studies on the impact of environmental strategy and top management's commitment on corporate environmental performance. The document also provides information on different types of managerial accounting reports and cost accounting fundamentals.

Management Accounting

TABLE OF CONTENTS

INTRODUCTION
Management accounting is the integral part of any business organisation. It is vital for the
management in order to have a tool which stimulate their decision-making process for the
business operation in more effective manner. It is the process of presenting the financial and
statistical in context to business operations to management so that can assist them in making
decision and strategies. This report assists the knowledge of different elements of the managerial
accounting that can be integrated in Brightstar financial. It is a special leading distributor which
offers special residential and buy in commercial finance. The report will highlight different
management accounting system that are essential in company. It also includes different
managerial accounting report that are beneficial for Brightstar financial. Further, the report will
prove a deep insight regarding the planning tool for budgetary control. It will also demonstrate
its importance in efficient and stable financial position of Brightstar financial. Furthermore,
report will assist in analysing the several management accounting methods that are applicated
under operational functions of organisation to deal with its financial problem.
LO1
1.
It can be termed as the process of managerial aspects of accounting. The importance of
this tool is for managers in order to make more effective operational practices. It is a process of
preparing and providing timely all financial and statistical information of business organisation
to the manager so that they can formulate the short-term as well as long term decisions and
strategies for the Brightstar financial (Alawattage and Wickramasinghe, 2018). It can be defining
as the process of operations which assist for applicating them in improving skills and knowledge
for stimulating the manager to understand the financial and non-financial information based on
different industrial operations.
It is an essential tool that can be adopted by Brightstar financial to make the business
operations more efficient. The different types of management accounting system which are
beneficial for the decision-making process for business operations in more efficient manner. The
management accounting system that are essentially required in Brightstar financial as follow:
Cost accounting system: It is a key system for Brightstar financial which assist tin
determining each cost of company that are incurred in the production process of company. Cost
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accounting assist the manager for evaluating and analysing the cost of the product in order to
analyse the product profitability, inventory valuation and controlling the cost. Cost accounting
system is an important tool for the management which assist the manager to track the flow of
inventory continuously through the various stages of manufacturing process (WHAT IS COST
ACCOUNTING?, 2019). Cost accounting system can be effectively integrated in Brightstar
financial, which will assist the manager to evaluate the cost of each manufactured product for the
profitable operations. The essentiality of this system for Brightstar financial in order to determine
the profitability in order to evaluate the correct price of the product. It can be said that,
importance of this system in order to control the cost of production process.
Inventory management system: this system is vital process which assist the manager in
order to track and record movement of goods in Brightstar financial. Inventory management can
be said as the process in order to evaluate and record of the goods of company throughout its
supply chain in an organisation. It can be said that, it is a very complex system as the manager
has to get a minute detail regarding every new and returned stock from the warehouse. It is
essentially required in Brightstar financial in order to assist the manager to take decisions for the
supply chain and logistic system of a company. It can be beneficial for successfully integrated
through different software for inventory management which will help in controlling the
inventory management and assist in evaluating the under-stock and overstock of production.
Price optimization system: it an essential accounting system which help managers in
controlling price of the resources that are are available in the company. Price optimization
system assist the manager in decide the price of the various product at a same time. This system
effectively analyse the demand of a particular product in the market with the change in its pricing
(ANAECHE and ALIO, 2018). it is beneficial for the Brightstar financial in order to determine
the pricing strategy in order to maintain the stable demand of the product in market and to gain
the minimum profit that will cover the manufacture cost of the product. price optimization assist
the manager to evaluate the correct selling cost of the product.
2.Explaining various techniques used for managerial accounting reporting and their integration
with in the organisation process.
Managerial accounting report can be termed as the information of the financial and
statistical data of the different department of the organisation. Managerial accounting report is
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for the internal use of management which can be prepared whenever required through out the
accounting period. This reports are crucial for the manager which assist in the formulation of
policies, planning, regulating, decision making and measuring the performance of the
organisational operations. There are various types of managerial reports that are prepared by
Brightstar financial:
Budget report: It is very critical report in business organisation that assist a management
in measuring company's overall performance of the business. it can be said that each company
prepares a budget in order to maintain the performance of business operations in profitable
manner (Bedford and Speklé, 2018). This budgets are prepared on the basis of past years and are
comprises of all the estimated income and expenditure for every department of Brightstar
financial. Budget report assist a manager to make strategies as per the budgeted plan. It is very
essential for the manager in order to measure the variances which can be estimated by comparing
the actual performance with the budgeted performance. This Manager can take various decisions
in order to control the over expenditure of business for the purpose of maintaining the working as
per the budgeted one.
Account receivable ageing report: this report are created in the company who are
heavily engaged in providing credit facility to its customers and distributor. At the end of
accounting period, this report prepared which assist a manager to determine the defaulter and the
issues that are relating to the credit collection policies of company (Booth, 2018). This report id
very essential to be integrated in the organisation process in order to maintain the proper cash-
flow in the company in order to meet the day to day operations of Brightstar financial. Through
this report manager can also take decisions in order to tightening their credit collection policy.
Cost managerial accounting report: As the cost managerial accounting system assist the
manager to evaluate each cost that are incurred in the production of the product in order to
analyse the profitability and controlling the cost. The cost accounting report summarised all the
information regarding the cost like overhead, raw material, direct and indirect cost that are
incurred in the manufacture process. This report assist the manager to Brightstar financial to
determine the cost price of the product as pert their selling cost (Types of Managerial Accounting
Reports , 2019). This report are beneficial to be integrated in the Brightstar financial in order to
evaluate the profitability of the product and in determining the over expenditure for controlling
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the expenses of the production process. Cost accounting report will helpt the managers in
analysing the efficient utilization of resources.
Balance sheet: it is the most crucial report that are mandatory to be prepared in every
type and size of organisation. Though it is prepared for the external use of the shareholders and
investor, but it is vital for management of Brightstar financial. This report assists the
management in analysing the financial performance of the company in order to formulate the
policies and goals of the company. It consists of information based on the long terms as well as
short term solvency of industry with comprising information such as total assets and total
liability.
LO2
Covered in examination.
LO3
1. Explaining Planning tools and budgetary control systems
Budgetary control is the process of analysing and ascertaining the potential results of a
business entity performances as per the estimated performance. The manager can get valuable
information regarding the variances in the actual performance which assist in taking decisions in
order to control the expenses and operations which has leads to create the differences. The
planning tool for the budgetary control is essential instrument for manager which aids them in
controlling and estimating the performance of Brightstar financial as per the planned budget. The
benefit and pitfall of such planning tool are as follows:
Financial budgets: financial budgets are foremost important budget which assist in
maintaining the financial position of the company. It serves an essential way of determining and
controlling all the sources of financial gains and expenses of Brightstar financial in a specific
period (Latan and et.al., 2018). After determining the past years income and expenditure, the
budget has been prepared for the expected income and expenses of the future. It is an effective
instrument for the manager for manging the cost or expenses of operations and improving
revenue of organisation to maximize its profitability.
There are mainly two types of financial budget, cash budget and capital expenditure
budget. It can be said that cash budget is the estimation of the future cash receipt and expenses. It
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assists management in Brightstar financial in relation with controlling the expenses to maintain
the proper cash flow for the day to day operations of the business. Whereas, capital expenditure
budget contains the plan for the future income and expenditure from the large investment of the
company. It includes the purchase of the new plan, building or selling of the asset. This budget
assist in controlling the heavy investment of the company.
Advantage:
 Financial budget is an important mechanism in relation with controlling the company’s
income and expenses of the business operations.
 This budget is very crucial at the time of preparing final account of an entity.
Disadvantage:
 It provides less or no flexibility as once prepared it is not possible to change the numbers
in the budgets (Rikhardsson and Yigitbasioglu, 2018). Any inaccuracy in the financial budgets can leads to make affect the financial decisions
of the company.
Operating budget: these budgets are the operational anticipation plan of the
organisation's future functioning (Kristensen, Nielsen and Grasso, 2016). Operating budgets can
be serves as an effective tool in context with focusing on routines dealings and sales of the
offerings of Brightstar financial. It assists the manager of the in evaluating and determine the
forthcoming financial status of entity and estimated profit that can be attained in an accounting
period (Malina, 2018). Operation budgets leads the management to take effective decisions in
context with controlling the operations cost and increase the revenue in order to maximize the
profitability.
Advantage:
 It assists in allocating money for the short-term need as well as predicts the requirement
of cash in future.
 It is an effective tool in context with reserve the financial resources of an entity.
Disadvantage:
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 With the alteration in financial plan, operating budget needs to be change also as the new
figure requires to be vary. The use of planning tool for seting up and prediction of budgets:
Cash budget is one of the planning tool:
2. Evaluating the use of planning tool in order to respond the financial problem in Brightstar
financial.
Planning tool for the budgetary control serves as an essential tool in order to control the
operational as well as financial performance of Brightstar financial. It can be said the company is
facing the cash-flow problem which can leads to affect its day to day operations of Brightstar
financial. The planning tool such as financial budget and operational budget will assist the
management to set a standard for the operational performance as per the allocated funds
(Bedford and Speklé, 2018). It assist in managing the expenses of the company and control the
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extra expenses which assist in reserving the financial resources in order to respond the cash flow
problem. On the other hand, financial budget assist in estimating and evaluating the sources of
income and expenditure in order to determine the financial position of Brightstar financial at a
time (AlKhajeh and Khalid, 2018). These budgets serves as an essential measures to control the
over expenses and increases the revenue in order to respond the cash flow problem of Brightstar
financial.
LO 4
3.
The techniques of management accounting are very effective for the management of
Brightstar financial in order to take decisions in order to enhance the operational efficiency and
in carrying off the financial steadiness in a company.
Balance scorecard: It is a performance measurement tool which assist the management
in measuring the performance level. It is data collecting process which assist in getting the
quantitative outcomes in relation with taking effective decisions by manager to increase the
productivity and financial performance (Gomes, Carnegie and Rodrigues, 2014). It will leads to
increase the financial stability in respect with responding financial problem in Brightstar
financial.
On the other hand, B.L. Holding limited, a manufacturing organisation in UK has
adopted other management accounting techniques in accordance with responding it with its
financial problem.
Key performance Indicator: It is defined as a measurable value which help a manager to
determine the efficiency in attaining its business goals. B. L. Limited can draw effective
decisions for enhancing the performance with the help of Key performance indicator (Chenhall
and Moers, 2015). KPI is an effective technique which would help the management in comparing
the financial performance of other company and analyse the areas for improvement. It assists in
examining the gross and net profit in order to make strategies for improving financial
performance which can respond to the financial problem of B. L. Limited.
4. Examining the way management accounting can leads the organisation to sustainable success.
It can be said that balance scorecard assists in providing the four perceptive in relation
with measuring company's performance, they are financial perceptive, customer perceptive,
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internal business process perceptive and learning perspective (Ward and Calabrese, 2018). It is
essential in attaining the financial stability, customer satisfaction and efficient growth of the
business which cam leads the organisation to the sustainable success. Whereas, key performance
indicator is used in order to measure the organisation's success. KPI serves an tool to identifies
the success factor of each department which leads to enhance efficiency that assist the
organisation to attain the sustainable success.
CONCLUSION
As per the above report, it can be concluded that management accounting is an integral
part of an organisation in order to enhances its efficiency. It can analysed from the report that the
management accounting system is essential to be integrated in Brightstar financial. The report
has concluded the importance of managerial reporting in the organisation. The present report has
also analysed the use of planning tool and management accounting system in order to responding
the financial problem and leading the organisation to sustainable success.
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REFERENCES
Books and Journals
Alawattage, C. and Wickramasinghe, D., 2018. Strategizing Management Accounting: Liberal
Origins and Neoliberal Trends. Routledge.
AlKhajeh, M.H.A. and Khalid, A.A., 2018. The Relationship of Implementing Management
Accounting Practices (MAPs) with Performance in Small and Medium Size Enterprises.
ANAECHE, K. and ALIO, B., 2018. REDUCING UNEMPLOYMENT AND POVERTY
LEVEL THROUGH MATHEMATICS EDUCATION IN NIGERIA. Journal of Science
and Computer Education. 2(1). pp.309-321.
Bedford, D. S. and Speklé, R. F., 2018. Construct validity in survey-based management
accounting and control research. Journal of Management Accounting Research. 30(2).
pp.23-58.
Booth, P., 2018. Management control in a voluntary organization: accounting and accountants
in organizational context. Routledge.
Chenhall, R.H. and Moers, F., 2015. The role of innovation in the evolution of management
accounting and its integration into management control. Accounting, organizations and
society. 47. pp.1-13.
Gomes, D., Carnegie, G. D. and Rodrigues, L. L., 2014. Accounting as a technology of
government in the Portuguese empire: The development, application and enforcement of
accounting rules during the Pombaline era (1761–1777). European Accounting
Review. 23(1). pp.87-115.
Hayes, B. K. and Newell, B. R., 2011. The uncertain status of Bayesian accounts of
reasoning. Behavioral and Brain Sciences. 34(4). pp.201-202.
Kristensen, T.B., Nielsen, H. and Grasso, L., 2016. The relationships between Lean
manufacturing, management accounting and firm performance: Are they constrained in
time?. In The Manufacturing Accounting Research Conference. European Institute for
Advanced Studies in Management, EIASM.
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Latan, H. and et.al., 2018. Effects of environmental strategy, environmental uncertainty and top
management's commitment on corporate environmental performance: The role of
environmental management accounting. Journal of cleaner production, 180, pp.297-306.
Malina, M. A. ed., 2018. Advances in management accounting. Emerald Publishing Limited.
Rikhardsson, P. and Yigitbasioglu, O., 2018. Business intelligence & analytics in management
accounting research: Status and future focus. International Journal of Accounting
Information Systems. 29. pp.37-58.
Ward, D. M. and Calabrese, T., 2018. Accounting fundamentals for health care management.
Jones & Bartlett Learning.
Online
Types of Managerial Accounting Reports . 2019 [Online] Available
Through:<https://smallbusiness.chron.com/types-managerial-accounting-reports-
58384.html>.
WHAT IS COST ACCOUNTING? . 2019 [Online] Available
Through:<https://www.wallstreetmojo.com/cost-accounting/>.
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