Management Accounting in Australia and New Zealand Banking Group
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Added on 2020-05-11
Management Accounting in Australia and New Zealand Banking Group
Added on 2020-05-11
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MANAGEMENTACCOUNTING
ANZ BankAnswer to 1Australia and New Zealand Banking Group (ANZ) realizes that the best-performing companies combine their vision and mission with their strategies so that they can outperform their competitors. The best mission and vision for such company would be to become a superior class financial institution that can provide superior returns to all its stakeholders. Forsuch purpose, it can value its people by motivating, recognizing, and retaining them efficiently. It can also focus towards change by starting small and thinking big so that outperforming competitors becomes simpler. Furthermore, the company can utilize its skills and experience to ensure that all its resources are effectively used. This vision statement can easily assist the company to address every requirement of its stakeholders. Besides, the key performance indicators like cost to income ratio, deposits, quality of loan book, etc must be analysed to ensure that the mission and vision statement is adequate and effective. In relation to strategy, ANZ must focus its strategy around four primary blocks of financial performance that are sustainability, economic transformation, asset-light strategy, and cost leadership (ANZ, 2016). Moreover, the company has a considerable market share and a diversified product portfolio that assists it to thrive in such complicated environment. Therefore, if a harvest strategy is adopted by the company to enhance its performance, then it would be moresuitable for it to acquire all its goals and objectives. The reason behind this can also be attributed to the fact that a build strategy lacks certainty and predictability than a harvest strategy. Besides, since it is well known that ANZ has a diversified portfolio of products and an enhanced share of market, adoption of a harvest strategy will be more beneficial for such company, as it can easily assist it to enhance its profitability and flows of cash. Nonetheless, harvest strategy will be more suitable for an organization like ANZ because a build strategy cannot allow it to flourish in the market and outperform its competitors.Answer to 2In order to ascertain enhanced details about the cost, ANZ Ltd utilizes an activity-based cost system that is not required for external financial reporting. In such scenario, the company is using both manufacturing and non-manufacturing costs in place of job-order or process costing. Furthermore, ANZ is engaged in diversification of its product portfolio and catering to a wide range of stakeholders through banking services. In relation to this, the bank incurs 2
ANZ Bankcost for arranging loan amounts, setting up basic infrastructure, and post sales processes of customer services.Activity-based costing results in an appropriate way of service or product costing, thereby resulting in a better pricing decision. The overhead understanding gets maximized along with the cost drivers, thereby making these costly and non-value affairs to be clearer in nature. This grants the managers to lessen them based on the requirements and such costing system leads to an efficient challenge when it comes to processes of operating costs so that overheads can be terminated (Vanderbeck, 2013). This also assists in product enhancement and profitability assessment of company manifolds. Besides, this also assists in performance management and regular projections of improvement. The system of activity-based costing results in an indirect cost allocation that are based on product cost drivers or factors that result in the generation of cost (Venanci, 2012). Nevertheless, the process of ABC can be used to track non-valued activities of a company, thereby resulting in an efficient allocation of resources. Besides, the system of ABC in the company (ANZ) can also result in addition ofvalue and continuous improvements in the business affairs of the company. Further, the best move for the company will be to pursue a costing system that can assist in offering better scope to it. Moreover, the company can easily settle its activities with such system as it can effectively use its resources for addressing the grievances of all its stakeholders (Vanderbeck,2013). Just-in-time, moving towards JIT system can be a better move for the company because it can facilitate in an enhanced association with the size of batches so that it can deliver properly.Answer to 3Even though financial measures have been regarded as more appropriate by many researchers, yet in the current scenario, organizations like ANZ use non-financial measures like a balanced scorecard measure to measure their performance. The company also uses an integrated performance management approach to measure its performance (ANZ, 2016). With the help of such approach, ANZ gains an ability to integrate its performance measures both horizontally and vertically so that it is ensured that the goals and objectives are adequately met. It can also be observed from the annual report of ANZ that it has utilized non-GAAP measures so that it can assess its performance level. Such reliance upon non-financial measures is highly visible in most of the companies operating in New Zealand. Furthermore, the second approach utilized by the company is balanced scorecard measure 3
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