Financial Management: Approaches, Stakeholder Management, Management Accounting Techniques, Fraud Detection and Prevention

FINANCIAL MANAGEMENT

TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................2
INTRODUTION..............................................................................................................................1
SECTION A.....................................................................................................................................1
1.Evaluating approaches, methods and the factors that helps an organization in making
effective decisions.......................................................................................................................1
2.Stakeholder management and managing conflicting purpose of different kind of the
stakeholder groups.......................................................................................................................3
3.Value of management accounting techniques..........................................................................4
4. Techniques for fraud detection and the prevention and approaches for ethical decision
making.........................................................................................................................................5
5. Reflection.................................................................................................................................6
SECTION B.....................................................................................................................................6
1. Financial information provides for operational and strategic decision making in company...6
2. Investment Appraisal techniques for effective decision for maximising the return on
investment..................................................................................................................................10
3. Demonstrating value of techniques in financial decision making.........................................10
4. Financial decision making supports for long term sustainability of business.......................11
5. Management accountant in long term sustainability of the business....................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUTION
Finance is lifeline of business and like other resources finance is limited and scarce. It is
essential for the business for managing the financial resources efficiently. Financial management
refers to the area of business management devoted to judicious use of the capital and careful
selection of sources of capital for enabling the spending for moving in the direction of reaching
goals and objectives. It is the organic function of the business. Entity requires finance for
obtaining physical resources for carrying out production activities & other operations of
business, making payment to the suppliers, etc. Report will reveal the concept of financial
management evaluating the different techniques, approaches and effective decision making in the
organisation. Stakeholder management and the conflicting objectives of stakeholder group will
be discussed. It will also provide about the techniques of management accounting for
maximising shareholder wealth. Report will provide about the financial analysis of the
performance and position of the company. It will provide about the investment appraisal
techniques for maximising the wealth of shareholder value. Study will demonstrate the value of
techniques that helps in decision making for long term sustainability.
SECTION A
1.Evaluating approaches, methods and the factors that helps an organization in making effective
decisions
There are various approaches and factors that provides assistance to the organization in
making better and improved decisions. Some of the important factors and approaches are given
below.
Knowledge based approach
The knowledge based methodology utilizes a pre-decided standard to measure and
guarantee that the result for the desired task is ideal. The primary goal of this sort of decision
making is to guarantee that vital choices are made by utilizing a powerful methodology and
effective and thoughtful thinking process (Voss, 2019). It additionally includes an aggregate
comprehension of the foundation about the concerned theme. The key components of knowledge
based approach incorporate open correspondence among leaders and the individuals, equivalent
data access and common trust inside the association. By effectively and adequately execution of
these components, a business organization will undoubtedly settle on key business choices that
will help it in accomplishment of its objectives and targets.
1

Formal approach
Under formal approach, the decision making is considered to be the most balanced
approach as it involves a clarity in respect to the allocation of the tasks and responsibilities which
also means that the employees and other staff of the organization are well aware of their roles
and responsibilities on the account of the task they perform which helps in making better and
effective decisions. This approach is little time consuming but also has high rate of success in
comparison to the other approaches. The formal approach also helps in establishing equality and
trust among the members of the organization which also provides assistance in achieving the
desired goals and objectives within the time frame.
Informal approach
Under this, decisions are made based on the subjective, holistic and the previous
experiences. The main advantage of this approach is that it can be easily implemented and also
requires exercising less efforts and coordination along with that these decisions can be sort of
riskier. It mainly suitable for small scale business entities as it rewards higher for higher risk.
Thus, sometimes business organizations should take some informal decision after doing the
intense research and planning process.
Role of the stakeholders in decision making
Stakeholders are the people who are having interest in the performance of the company.
It includes investors, financial specialists, financial institution providing loan to the company,
government and the clients. In this way, it is very significant for an association to think about its
stakeholders before making any final choices. The firm should abstain itself from accepting
complex choices as it can influence its stakeholders in a negative way and further may affect the
revenue and profitability of the business. Moreover, the organization must consider the issues
raised by the individuals and its stakeholders and should settle on proper choices and decisions
by taking into account all these points.
Making or buying decisions
The make or buy decisions is the strategic approach of decision making with respect to
either produce the product in-house or outsource it to third party or whether to purchase the new
machinery or not. These decisions are very important for the business as before making a final
call a proper evaluation is made to know whether it is beneficial for the company or not.
Key factor analysis
2