Sustainability Accounting Research Analysis

This assignment requires a comprehensive analysis of sustainability accounting based on various scholarly works. Students need to evaluate environmental management accounting, supply chain management, strategic management accounting practices, and more. The task involves understanding the evolution and critique of management accounting research, with a focus on sustainability.

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P.1. Explain management accounting and essential requirements of different types of
management accounting system..................................................................................................1
P.2. Explain different method used for management accounting reporting................................3
TASK 2............................................................................................................................................5
P.3.income statements using marginal and absorption costing methodologies..........................5
P.4. Explain the advantage and disadvantage of different types of planning tools used for
budgetary control........................................................................................................................7
TASK 4..........................................................................................................................................10
P.5. Evaluate how organisations are adopting management accounting systems to respond to
financial problems.....................................................................................................................10
References................................................................................................................................ 13

INTRODUCTION
In this assignment, this study review about numbers of management accounting systems
which can assist the Unilever organisation in order to make their issues in more efficient form.
Moreover, this assignment review about difference method of management accounting reporting
which can help the Unilever company in respect to formation of appropriate reporting within the
firm in context of relevant planning of budgeting in appropriate form. Furthermore, this
investigation refer to some of effective marginal and absorption costing method by which
organisation can estimate some areas in which they are needed to make proper improvement.
Furthermore, it is also concluded that some management accounting systems which can be used
in proper respond of financial issues within the organisation in more effective manner. This
study also describe about to several budgeting approaches which can be used by the businesses
in order to proper development of budget in the organisation to proper planning of all financial
activities in sufficient form in context of achievement of organisational goals and objectives
efficiently.
TASK 1
P.1. Explain management accounting and essential requirements of different types of
management accounting system
In each organisation, management accounting plays very crucial role in order to
effectively manage financial data within the firm and it helps accounting manager in terms of
furnishing sufficient information regarding the company’s financial performances on yearly and
quarterly basis which could aid them to make proper decision regarding financial risk control
plus minimise the cost of production at the workplace effectively (Leitner, 2013). With the
assistance of management accounting tools and techniques, the manager of Unilever Company
can effectively manage their operational strategies, resources and customers plus costs as well.
Management accounting is a process in which management employees of the company can
analyse business critical data concerning the financial positioning of the business effectively.
Management accounting system consists of some essential financial data which can lead to high
financial performance of the company.
Cost accounting system: This is also called product costing system, a cost accounting
system is methodology which is utilised for analysing the cost of product and services in order to
have estimation of profitability, know about the inventory costing values in the firm and
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effective cost control in manufacturing process as well. According to this process, as a Junior
Account Manager in Unilever Company I need to estimate that which of your product is
profitable for the organisation and which is not. There are main tow kinds of cost accounting
which can be used in the organisation which is job order costing and process costing, Several
kinds of food and house hold products are manufacturing by the companies at their pant so they
need to utilise job costing approach at the workplace in terms of reduce the rate of production
within the organisation efficiently (Qu, Cooper and Ezzamel, 2010).
M.1. Benefits of management accounting system: This is a process in which Unilever
company need to calculate organisation's cost of production by involving the company's
expenses each stage of production and some of fixed expensed inclusion within the firm which
furnish overall values of cost accounting system for the business production level.
Job accounting system: Job accounting is an approach in which each job which is being
done at manufacturing level is estimated and calculated within the firm with the help of job
accounting system at the workplace in order to reduce the cost of each of their job stage expenses
at manufacturing plan efficiently. In case of job order costing method, accounting manager of
Unilever could estimate manufacture costing specifically to their each job has been done in the
organisation which furnishes each unique product costing rate efficiently and according to its
techniques, they can better manage each job costing rate at the workplace (Otley and Emmanuel,
2013). This is an approach which is used by Unilever when they produce different household and
food products within the firm.
M.1. Benefits of management accounting system: This accounting system give benefits
the company from Job costing approach furnishes the value in which the accounting manager of
the company need to formulate a proper job costing system of each job which is being done in
their different-different types of product, services and according to job costing accounting
system, they can minimise the cost of their each job which is being completed at manufacturing
plan, and decrease the rate of production at each job cost level within the organisation efficiently.
Process costing system: This is an approach which is utilised in the cost accounting
system, this process defines about the method in which various kinds of manufacturing costs are
associated and cost of unit production is estimated by accounting manager of Unilever in order to
have proper formation of their issues in efficient form. Apart from it, process costing refer to the
process in which each process costing estimated within the firm effectively and according to the
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tools of cost accounting, Unilever company's manager can develop costing in which each of their
process costing rate can be minimised efficiently (Harris and Mongiello, 2012). In this process,
accounting manager need to estimate a production unit level and also make collection of several
production process until the output process gain. At manufacturing pant there are several
processes cost ii needed to be calculated efficiently which is total cost per process, unit cost per
processes etc.
M.1. Benefits of management accounting system: This management approach gives
benefits for the organisation at the ending stage of the production process the company's manager
can effectively estimate the unit production cost and with the help of tools and techniques of
process costing, accounting manager of Unilever firm can make decision in order to minimise
process costing rate. With the assistance of this approach, the manager of the company can easily
reduce the cost of production and increase profitability in the industry.
P.2. Explain different method used for management accounting reporting
Management accounting is a most vital part for manufacturing company, in case of
Unilever company, there are various kinds of reporting system are presented here in context of
formation of effective reporting to the business so that expected financial outcomes can be
gained by the business efficiently. With the assistance of reporting system, several kinds of
financial performance of Unilever company measured effectively.
There are various types of management accounting reporting as below:
Budget reporting: Several kinds of business financial fluctuation are being done in the
business in order to run business practices effectively on daily basis. Various financial status and
income and expenses statements and financial data changing rapidly within the organisation
effectively. Financial data and budget reporting is recoded at regular basis at the workplace by its
accounting manager efficiently (Hyvönen, 2010). Moreover, it is a financial statement in which
deep detailed of financial data is recorded in budget reporting system effectively. Accounting
manager of Unilever Company also need to make it in proper brief and easy way at the
workplace. This decision of making budget reporting also makes formation of their issues in
more efficient manner in order to proper development of their issues in more effective manner.
This decision of preparing budget reporting also affects the overall performances of the reporting
efficiently. Apart from it, it can be in different-different forma according to the financial need
and information available for the business effectively. In this budget reporting of Unilever
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company also inclusion of general incomes of the company and sales data, fixed collection of the
data and net worth of the entire organisation in their common section of the budget reporting.
Two types of section entered in this reporting which is assets and liabilities. This is mainly
formulated by accounting manager at once time in smaller business and for big organisations, it
is needed to formulation in several times in order to examine financial expenses which are
known as quarterly reports. This is mostly used for the business plan and projection within the
firm effectively in order to accomplishment of Unilever firm's goals and objective efficiently.
Job cost report: It is an estimation of expenses and costs within the organisation. In job
costing report, you need to develop job costing by estimating each job in your manufacturing
plant is being done properly and make them specific form at the equal cost category so that
actual job costing can be utilised by accounting manager in this form. Moreover, it is a financial
reporting process in which several kinds of financial reporting data gathered (Amoako, 2013).
This is a report in which each job costing is listed by accounting manager in order to examine
accurate job cost on each of their job at manufacturing plant. Various kinds of job costing
included in this process which is Labour cost, material costs and filed overhead costs and
liquidated damages cost is included mainly in the job cost reporting. In case of Unilever
company, various kinds of job being done at their production plant so that company's accounting
manager need manage each jobs and according to their expenses add all expenses, manager of
company can easily identify each over job costing expenses within the firm and according to
them they can minimise the expenses on the job costing and increase the profitability of the
business efficiently.
Income statement: This is statement which is concerned about to the financial statement
that defines about the company's financial performances effectively during particular accounting
time period within the firm. Moreover, financial performances can be assessed with the help of
income statements in which Unilever company's accounting manager can easily examine that
which is part of their business operation if giving more revenue for the business and which
section of the business are making loss for the business (Moser, 2012). It could be analysed by
seeing the financial statements at regular basis by accounting manager of the company. It is
mainly used for to know about to the net profit and loss occurred in the business in particular
given financial time period in the industry. According to the information by income statement
about operating and non-operating activities in the firm, accounting manager of the enterprise
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could analyse that which part of their business is making more losses. In accordance with
analytical information, they need to make decision with the help of management accounting tools
to improve financial performance of the business effectively and increase the profitability of the
firm efficiently within the organisation.
TASK 2
P.3.income statements using marginal and absorption costing methodologies
Marginal costing techniques in Nero Ltd.
PARTICULAR AMOUNT AMOUNT
Sales revenue 100000
Marginal cost of sales
Direct materials 24000
Direct labour 14000
Variable production overhead 9000
Variable distribution& administration
expenses
4500 51500
Contribution 48500
Fixed costs: Production overheads 7000
Distribution and administration expenses 5000 12000
Net profit 36500
Absorption costing income statement of Nero Ltd.
PARTICULAR AMOUNT AMOUNT
Sales revenue 100000
Marginal cost of sales
Direct materials 24000
Direct labour 14000
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Variable production overheads 9000
Fixed production overheads 7000 54000
Gross profit 46000
Distribution and administration costs:
Variable
4500
Fixed 5000 9500
Net profit 365000
From the above analysis in both table it can be stated that both techniques of analysing
costing of manufacturing within the organisation have no broad differences in which they can
evaluate both the costing approach effectively in terms of know about to the net profitability of
the business in efficient manner. Moreover, I could be said that both techniques are appropriate
for Nero Ltd. business in order to analyse their relevant financial data within the organisation
effectively (Bebbington, Unerman and O'Dwyer, eds., 2014).
M.2. Accurate apply a range of management accounting techniques to appropriate
financial documentation: Nero Ltd. company must chose one option either marginal costing
method or absorption costing in which they can generate more effective result for the firm. Nero
Ltd. company have option in which they can select one option by which the organisation can
effectively find out the profitability and loss of the business in given financial time period. Both
costing evaluation techniques are appropriate for Nero Ltd. business in terms of understand the
fixed overhead expenses within the firm while manufacturing cost in the firm in effective
manner. Fixed overhead expenses are those expenses have the values which never get changes in
case of production level also get changes. Fixed overhead expenses includes some of the
expenses which is made in the firm is, insurance, wages to employees and lease payments on
equipments and some other expenses as well. The main advantage of absorption costing is that it
includes fixed cost within costing analysis method so that it has been done better job in order to
analysing appropriate profitability during given financial time period efficiently. Furthermore, it
is mainly used of analysing the structure of assessment by which financial performance can be
improved and in another section, it could not compare the product line in which Nero Ltd (Al
and McLellan, 2011). Company may improve in their performances. Apart from it, in case of
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marginal costing, it is also the best alternative for Nero Ltd. organisation in order to analysing of
their costing within the firm in more effective manner. In terms of marginal costing method
variable costing in included in terms of generating income statement to know about to the net
profitability of the business in efficient form. Marginal costing is very easy to implement on the
business because of fixed costs are not included in this approach. This process in which
marginal costing mechanism could be associated with standard costing method within the
organisation in order to know sufficient profit and loss statements about to the organisation
efficiently. Marginal and absorption both techniques are appropriate for Nero Ltd. business in
order to analyse their quarterly basis financial progress and its information also help accounting
manager of enterprise in respect to make decision towards organisational profitability and
improvement in financial growth within the food industry sufficiently.
P.4. Explain the advantage and disadvantage of different types of planning tools used for
budgetary control
Various types of planing tools can be used in order to effective budget control within the
firm effectively in order to gain financial growth in the market in more efficient form. Several
kinds of tools and techniques could be used by Nero Ltd. company's accounting manager in
terms of gaining proper development of budget in the business in order to gain future expected
growth in the market efficiently.
Cash budget: This is a most appropriate method of formation of budget within the
organisation. In the case budgeting accounting manager of Nero Ltd. need to estimate the cash
inflows and outflows of the enterprise during the given period time. It is helpful to know bout to
sufficient remain budget for the organisation in respect to relevant running of operational
activities within the firm effectively (Suomala and Lyly-Yrjänäinen, 2012). In context of
formation of cash budgeting, accounting manager of the company need to forecast about sales
and production level in the firm in given period and according to them make cash budgeting in
the business efficiently. Its furnish the information by which company get to know about to
available balance within the company in order to efficient run of business activities sufficiently.
Advantages of cash budgeting:
 Cash budgeting make help the company's manager to identify those planned section
within the business which is not operating in the business according to their expectation.
According to them manager can improve in those areas (Kokubu and Kitada, 2015).
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 Main advantage of cash budgeting is that it helps to manager to focus on the things in
which financial improvement can be gained more effectively. A cash budgeting can be useful for the making some of effective services in which they
can generate more efficient services in more effective manner.
Disadvantage of cash budgeting:
 It is totally made on estimation on the firm in which they can generate cash budgeting on
proper estimation and most of the time budget can not be performed according to
forecasting on the business effectively (Burritt and et.al., 2011). It needs high cost to prepare within the organisation in terms of set of financial goals
within the business effectively.
Fixed budgeting: This is a budgeting approach which get never changed in the
organisation in given time period. This is a budget system which never change in every situation
in the business effectively whether sales and production level of the business increase or
decrease frequently (Abdel-Kader, ed., 2011). Nero Ltd. company's accounting manager need to
develop fixed budgeting system in the organisation in order to improvement in financial issues in
effective form in the firm. Large amount of dealing companies mostly use of this type of budget
in order to get actual budgeted outcomes from the organisation.
Advantage of fixed budgeting:
 The major advantage of this budgeting is that it helps the manager to keep production
cost down in that range in which each of their customer can get afford.
 Another main advantage of this budget is that it is easy to formulate within the firm and
there is no need to regular update in this kind of budgeting. It assists the manager to evaluate the budget at short terms and long term both level in
order to know that which of the cost line in the organisation is gong to overhead in the
firm.
Disadvantage of fixed budgeting:
 The biggest disadvantage of fixed budgeting is that it has less flexibility and it never
changes in business envelopment, and most of the time manager need to change in their
budgeting planning according to the situation (Hopper and Bui, 2016).
 If the company can find out the under-forming field within the business so that manager
can not take action to utilisation of extra resources towards the business.
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 It does not furnish proper guideline in which the manger feel difficulties to complete
them effectively within the business climate.
M.3. Analyse the use of different planning tools and their application for preparing
and forecasting budgets:
Zero base budgeting: Zero based budgeting is the process in which Nero Ltd. business
accounting manager should be recognised the each of their new time period in the organisation
effectively. As it name shows that it starts from the zero base within the organisation and each of
its function is examined with the helps of needs and costs within the organisation effectively.
Advantages of zero base budgeting:
 Its tools and techniques help the business accounting manager to make decision regarding
to the cost reduction within the business which furnish accurate value for the organisation
in efficient form (Quinn, 2011).
 It terms of resources in the organisation is assessed for the beneficial terms n which they
can use of effective utilisation of resources within the firm effectively. It another advantages if that it makes sure that careful planning within the organisation
efficiently.
Disadvantage of zero cash budgeting:
 In terms of large businesses companies, several kinds of effective decision are made
under them and it includes more expenses within the organisation effectively. It generates threatening for organisational accounting manager when they formulate zero
base budgeting.
Capital budgeting method: Capital budgeting is most appropriate alternative for Nero Ltd.
business in order to decision-making method of investing a long term assets for the organisation
in order to formation of some kinds of services in efficient form. These assets are land, building
and essential equipments for the production as well.
Advantage of capital budgeting method:
 Capital budgeting assist the business to assume the investment alternatives by which the
company can generate more profitability for the firm (Talha, Raja, and Seetharaman,
2010).
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 Capital budgeting have also main advantage which is, it assists the business to
formulation of long terms strategic investment in order to proper development of their
issues in effective form.
Disadvantage of capital budgeting method:
 It helps to make decision for long-term investment in the organisation and which never
get changed in the future. This budgeting process is very expensive for the organisation
in effective form.
 This is the techniques, which is totally based on the forecasting and estimation about to
the future which is many of time uncertainty always on expected return on the business.
TASK 4
P.5. Evaluate how organisations are adopting management accounting systems to respond to
financial problems
From last few years, it has been seen that, several kinds of manufacturing companies
facing financial issues within the industry effectively (Waweru, 2010). There are several kinds of
issues which can generate in the financial department in the business and the firm need to
utilisation of some of effective management accounting systems in order to better response of
financial issues within the firm effectively. In case of Nero Ltd. company, it also needs
implementation of management accounting system on the business to effective resolve their
financial issues.
Key performance indicators: Key performance indicators are the tools which helps the
organisation in order to measure effective values that furnish examples of that the business is
accomplishing their objective how effectively within the firm in efficient form. Moreover, Nero
Ltd. organisation use of key performance indicators at the workplace in terms to know about to
their performance in financial sector and other business activities in respect to achieving
organisational goals and targets efficiently. Key performance indicator furnish the values in
which Nero Ltd. business can examine the values in which they can measure their performance
in the industry and make decision to improvement in their financial activities and remove the
barriers and issues which comes in the way of success of the business efficiently. With the help
of KPI tools and techniques Nero Ltd (Lukka and Vinnari, 2014). Organisation can sufficiently
analyse their performance and identify those areas in which they are needed to make efficient
changes and also help in removing their financial issues within the firm in efficient form.
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M.4. Financial problems and management accounting could lead organisation to
sustainable success:
Balanced score card: Balance score card is a management system which furnish the way
in which the organisation could focus on the ways in which they can generate some issues which
could furnish the values regarding the strategic goals and objectives in the firm effectively. It
assists the business to measure the right things to the business in order to make effort in the ways
in which the firm can get more success (Ramljak and Rogošić, 2012). Moreover, financial
measurement is most essential terms of each business and which furnish an overview of the
financial condition in which they could analyse the short terms and long terms targets of the
business effectively and make focus on those areas in which they can generate more profitability
effectively. Balance score card provides the information regarding those areas in which they
business actual performance is compared to their set targets and measure the assessment in which
performance can be evaluated by accounting manager of Nero Ltd. organisation. According to
the information of balanced score card the business manager can identify those areas which is
not performing according to those set targets of the business efficiently. This is the best tools for
accounting manager of the company in terms of proper responding their financial issues within
the firm effectively.
Financial governance: This is an approach which is mostly used by the manufacturing
organisation in order to removing their financial issues and barriers within the organisation in
effective form. There are several kinds of financial issues occurred in Nero Ltd. organisation,
because of numbers of employees are not performing their job properly within the organisation
effectively (Arroyo, 2012). It creates major issues within the organisation to generate irrelevant
financial governance in the enterprise. In these kinds of performances of the business, there are
several types of financial officers working in Nero Ltd. organisation, so that each of them must
be done their appropriate job within the organisational environment. If someone in the firm make
mistakes and because of those mistakes organisation face big financial issues within the industry
so that those particular person will be responsible for those activities within the organisation
efficiently. Before implementation of big financial projection on the business, the accounting
manager of the organisation must ensure that how much this project can give better outcomes
from the market then further go for its implementation on the business efficiently.
CONCLUSION
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From the above analysis, it is concluded that, financial accounting is most necessary part
of each organisation in order to proper respond of financial issues and effective management of
finance within the firm effectively. Moreover, it is also concluded that management accounting
have several kinds of essential requirements by which Unilever company can effective manage
their financial issues in the firm efficiently. Furthermore, this study concluded about to several
tools and techniques of budget reporting can be used in organisation in terms of generating
proper reporting and budgeting in the organisation in order to better manager their financial
services and effectively manage them as well.
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REFERENCES
Books and Journals
Abdel-Kader, M. G. ed., 2011. Review of management accounting research. Springer.
Al, S. F. A. and McLellan, J. D., 2011. Management Accounting Practices in Egypt--A
Transitional Economy Country. Journal of Accounting, Business & Management. 18. 2.
Amoako, G. K., 2013. Accounting practices of SMEs: A case study of Kumasi Metropolis in
Ghana. International Journal of Business and Management. 8. 24. p. 73.
Arroyo, P., 2012. Management accounting change and sustainability: an institutional approach.
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Bebbington, J., Unerman, J. and O'Dwyer, B. eds., 2014. Sustainability accounting and
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Burritt, R. L., and et.al., 2011. Environmental management accounting and supply chain
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Hyvönen, T., 2010. Exploring Management Accounting Change in ERP Context-Four
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Moser, D. V., 2012. Is accounting research stagnant?. Accounting Horizons. 26. 4. pp. 845-850.
Otley, D. and Emmanuel, K. M. C., 2013. Readings in accounting for management control.
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Qu, S. Q., Cooper, D. J. and Ezzamel, M., 2010. Creating and popularising a global
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