Management Accounting Issues in Wesfarmers

Running head : AUDITING AND ASSURANCE IN AUSTRALIA
AUDITING AND ASSURANCE IN AUSTRALIA
Name of the Student
Name of the University
Author Note

AUDITING AND ASSURANCE IN AUSTRALIA
1
To: The Board of Directors
From: Graduate
Date:
Subject: Management Accounting Issues
___________________________________________________________________________
The purpose of this Memorandum is to initiate professional development. The memorandum
is presented to analyse the management accounting problems regarding Wesfarmers, which
would require a solution. In the Memorandum, the management accounting issues are taken
into consideration that are raised by an article, that are inclusive of its strengths, weaknesses,
opportunities, threats, if any. Furthermore the management Tools and Techniques are also to
be considered, that are to be used to tackle with the issues that are raised by the articles.
Management Accounting
Management Accounting refers to the functioning of the getting hold of the internal cost for a
process of business, which would help an organisation or any individual in the procedure of
decision making that relate to the production, operation and the investments in markets. The
need for management accounting in various companies if for the purpose of the efficiency of
the budget, the operations costs incurred by them, and allocation of funds in accordance with
the production, sales and investments. Therefore, management Accounting plays a very
crucial role for the well being of a firm. The management accountant plays so huge role that
if there is any single miscalculation or underestimation of a business plan by the management
accountant, the future of the company might be in danger. The main role of a management
accountant is in the field of Budgeting. The budget acts as a guide to all the expenditures of a

AUDITING AND ASSURANCE IN AUSTRALIA
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company. Wesfarmers decide up on a budget each year for the purpose for expense fixation
on each and every procedure which is in operation and the production cost followed by
further investment. Therefore, a management accountant here has to take reviews of the
historical data in the preparation of the budget.
Management Accounting Issues
Management accounting aims towards adaptation to the recent changes to be relevant and
competitive in the near future. There are certain issues that every organisation, including
Wesfarmers face are as follows:
Lack of emphasis on management accounting: Management Accounting is a field that is not
given utmost importance, due to which the management accounting operations are not carried
out properly. The decision makers of the enterprise lack attention and apply management
accounting. The emphasis is given more on financial accounting, which aims to focus on the
rendering information on the financial status, operation results and the cash flow of the
enterprises to external planning, operation management and forecasting of the decisions for
internal managers of the enterprises.
Insufficient practical application of Big Data: In every well known organisations the
mangers have to deal with Big and complicated data, which many of the management
accountant are not able to apply properly. This adds up to one of the biggest issues that are
faced by a company. There are managers which who are not potent enough to understand
what are the possible areas where the data are to be applied, because of which the
organisations end up losing their market share.
Accounting personnel lack computer skills: computer skill is one of the most eminent skill
that is needed in every organisation, be it a small and medium enterprise or a renowned