Cost Accounting & Auditing Assignment

This assignment delves into the core principles of cost accounting and auditing. It presents several practice problems requiring students to apply their knowledge of profit calculation, cost management techniques, and auditing standards. The assignment also includes analytical questions that encourage critical thinking about ethical considerations in accounting and auditing practices.

Management Accounting

Table of Contents
Management Accounting:...........................................................................................................................5
Management Accounting System:...............................................................................................................6
Integrate in organization:............................................................................................................................6
Origin:..........................................................................................................................................................6
Its role was just informed search (mclany, 2009)........................................................................................6
Management Accounting Principle:............................................................................................................6
Credibility....................................................................................................................................................7
Aggregation.................................................................................................................................................8
Efficient behavior.........................................................................................................................................8
Reporting Focus...................................................................................................................................8
Proven Information.....................................................................................................................................8
Reporting Focus...........................................................................................................................................8
Standards....................................................................................................................................................8
System.........................................................................................................................................................8
Timing..........................................................................................................................................................8
Valuation.....................................................................................................................................................9
Management Accounting Process...............................................................................................................9
Cost accounting System...............................................................................................................................9
Inventory management.............................................................................................................................10
These are the few types of managerial account system............................................................................10
Micro Economics techniques:....................................................................................................................11
Cost :..........................................................................................................................................................11
Cost Analysis..............................................................................................................................................11
Cost Volume profit:...................................................................................................................................11
Price Costing:.............................................................................................................................................13
Fixed costing..............................................................................................................................................13
Variable costing:........................................................................................................................................14
Normal Costing:.........................................................................................................................................14
Standard Costing:......................................................................................................................................14
Inventory Cost:..........................................................................................................................................14
Types of Cost Inventory:............................................................................................................................15

Cost inventory:..........................................................................................................................................15
Types of inventory cost System:................................................................................................................15
Benefits of reducing inventory cost...........................................................................................................15
Material cost.............................................................................................................................................15
Material Maintenance:..............................................................................................................................16
Price of competitive:.................................................................................................................................16
Increase profit...........................................................................................................................................16
Budget.......................................................................................................................................................16
Operating Budget:.....................................................................................................................................16
Incremental Budgeting:.............................................................................................................................17
Activity based budgeting:..........................................................................................................................17
Value proposition budgeting:....................................................................................................................17
Zero based budget:....................................................................................................................................17
Flexible Budgeting Method........................................................................................................................17
Pricing:.......................................................................................................................................................18
Pricing Strategy..........................................................................................................................................18
Common Pricing Strategy:.........................................................................................................................18
Plus Cost price...........................................................................................................................................18
Budget controlling process:.......................................................................................................................18
Advantages:...............................................................................................................................................19
Getting Maximum Profit............................................................................................................................19
Coordination:.............................................................................................................................................19
Performance Measurement Tools.............................................................................................................19
Expenses....................................................................................................................................................19
Consciousness...........................................................................................................................................19
Incentives:.................................................................................................................................................19
Limitations in budget controlling:..............................................................................................................19
Future uncertainty.....................................................................................................................................19
Budget revision:.........................................................................................................................................19
Reduce efficiency:......................................................................................................................................20
Problem in coordination:...........................................................................................................................20
Interdepartmental conflicts:......................................................................................................................20
Top Management dependent:...................................................................................................................20

Costing System:.........................................................................................................................................20
Actual Costing System...............................................................................................................................20
Affinity Diagram.........................................................................................................................................20
Tree Diagram:............................................................................................................................................21
Inter relationship Diagram:.......................................................................................................................21
Matrix Diagram:.........................................................................................................................................21
What is PEST?............................................................................................................................................21
SWOT:........................................................................................................................................................21
Bench Marker:...........................................................................................................................................22
Key Performance indicator:.......................................................................................................................22
Financial key performance:.......................................................................................................................22
Non-Financial Key performance:...............................................................................................................22
Importance of KPI:.....................................................................................................................................23
Budget target:...........................................................................................................................................23
Finance Governess:...................................................................................................................................23
Monitoring strategy...................................................................................................................................24
Accounting Management..........................................................................................................................24
Leadership:................................................................................................................................................24
Experiences:..............................................................................................................................................24
Communicating Skills:................................................................................................................................24
Management of Knowledge:.....................................................................................................................24
Organizations:...........................................................................................................................................24
Managing Time:.........................................................................................................................................24
Reliance:....................................................................................................................................................25
Delegates:..................................................................................................................................................25
Be Confident:.............................................................................................................................................25
Employees respect:...................................................................................................................................25
Conclusion:................................................................................................................................................26
Reference:.................................................................................................................................................26

Introduction:
In this project we mainly discuss about management accounting, management accounting
principles and management accounting process. In task 2 we learn about microeconomics
techniques, cost analysis, inventory cost and types of inventory cost system. In task 3 we
discuss we budget, common pricing strategy, and performance management tools. In task 4 we
learn about bench marker importance of KPI communicating strategies, budget targets, and
important techniques of managements
Task 1
Management Accounting
Management accounting is type of establishing activities, evaluating, accessing,
interpreting and transmitting information to managers. Management of accounting
includes all policies aimed at remaining management. It used information relating
at cost of goods or offers that company purchases. Budgets used to calculate
decisions in the well-disciplined form of organization. Management accounting uses
it
efficiently.Reports showing variances in real outcomes from budgets. The key
distinction between management and financial accounting is used for calculating
the finance of statements. Whereas management accounting to keep an eye on
company transactions.

Management Accounting System:
Internal accounting management systems does not used to give
important managing knowledge for the decision-
making of operational business. A company that manufacture use the system
in assist in costing and management of their process. [Peshori, Kishore 2015] The
hospital can use management system to assist Them along with for
insurance other in house billing requirement.
This system different within industries to provide functions
Integrate in organization:
Management accounting
lets administrators within an organization make choices. It is also known as
cost accounting, management accounting that is method of defining
evaluating, interpreting and transmitting facts to administrators in
helping accomplish company objectives. Both accounting areas covering the
administration of corporate activities related to the expense of goods or servi
ces obtained by the organisation shall
be included in the data gathered (Research Report No. R-1428-08-
RR). Accountants use budgets to calculate the corporate spending schedule.
The report on success is used for observing the disparity between current ou
tcomes and the expected results.
Origin:
Its role was just informed search (mclany, 2009)
This website of the institute of management accountant describe management accounting as
“A profession that involves partnering in management decision making, planning and
performance management system”.
Management Accounting Principle:
1. Influence :Communication provides a vital perspective. Communication is beginning and end
of accounting administration. It enhances decision-making by having the necessary insight into all
decision-making processes. Sound exchange of vital knowledge allows management accounting to
intersect silos and facilities an interconnected thinking process process. The effects of steps taken in one
company divide on the other divide can be readily interpreted, accepted or altered.It is also easier to
create and analyses the most important knowledge when addressing the criteria of company decision-
makers. It means that it is necessary for the decision maker to make recommendations and to obtain
influence.
2. Plausibility:For everybody, knowledge is important. Management accounting tests for the best
possible information services, important to the decision made by the people who decide themselves
It needs to achieve a right balance: Present, current and future-related information Foreign and internal
data. Financial and non-financial information, for example environmental and social problems

3. Worth Value It is calculated the effect on value. Management accounting
binds the operations of the enterprise to its fundamental corporate model an
d demands a clear awareness of the wider macroeconomic environment. It in
cludes analysing the knowledge along the road of value generation, evaluati
ng the possibility
That could be offered and focusing on risks , costs and opportunities for valu
e generation.
Analysis of circumstances contributes to the review of decision-making.
Thus, companies may determine better to complete or take advantage of
scenario modelling to analyse the effects of particular opportunities and chall
enges.
Furthermore, the models help businesses to measure the potential to achiev
e
or to face risks and the profit to be generated or erode
4. Credibility
Creditworthiness is stewardship. Responsibility and monitoring add even
more to making decision-making. Short term corporate interest for
shareholders against long term increases trust and reliability. [Greenes, K. &
Piktialis, D. (July 2008) ]Experts in management accounting are considered to
be legal, accountable and mindful of values, policy standards and
interpersonal responsibilities of the company. Knowing inconsistent
preferences boosts control of stakeholders and also is an important
consideration in prioritizing stakeholder units. Proactively seeking to collect
input and be open to questions or poor feedback helps employees to track
the overall efficiency of the company. This increases the company 's
credibility, integrity and honesty and tends to enhance systems and forces.
The distinction between management and financial accounting is
Management accounting professionals are considered legal, responsible and
aware of the company's principles, policy norms and interpersonal
obligations. Knowing inconsistent priorities increases stakeholder power and
is also an important factor in giving priority to stakeholder units. Proactively
trying to gain information and to be open to concerns or bad reviews allows
staff to control the company's overall effectiveness. This improves the
prestige, dignity and fairness of the business and helps to strengthen
structures and powers.

The disparity between financial accounting and management is as much as
5.Aggregation
Earnings for a whole company are reported in financial accounting. In handlin
g budgets, the income by the product, product line, client and geographical a
rea are almost always more comprehensive.
Efficient behavior
Financial accounting report on performance of a company, while
Reporting Focus
The requirement of functional accounting is on the documents to be held
with significant accuracy to show their correctness. Management accounting
also presents estimates instead of verifiable and confirmed evidence
(Accounting Made Simple –by Mike Piper)
Proven Information
Financial accounting requires the accuracy of documents, which are used to
prove the accuracy of financial statements. Management accounts also work
with estimates instead of verifiable variables that have been confirmed.
Reporting Focus
Financial management is directed at the production of financial records, both
in- and out of-society. Operational accounts, which only distribute within a co
mpany, concern management accounting
Standards
Financial accounting must follow different accounting requirements, while ad
ministrative accounting
must not meet such standards when data is gathered for domestic use.
System
The total method a organisation will earn profit should not pay much attentio
n to financial accounting but for its result. Inversely, administrators tend to s
ee where bottleneck processes take place and how to boost their profits by a
ddressing challenges with a bottleneck.
Timing
Financial accounting demands that at the conclusion of an accounting cycle
the financial reports be published. Managers should report more often and it
offers information that is more valuable to managers because they see it
immediately
Valuation

Financial management addresses the correct appraisal of properties and
obligations and thereby deficiencies, reassessments, etc. The valuation of
these things, just their productivity, is not associated with management
accounting.
Management Accounting Process
There are two main types of management accounting system namely
 Costing system
 Inventory Management
Cost accounting System
In order to measure the cost of its goods in terms of inventory assessment, profitability
measurement and cost management, the company applied a costing method or costing system.
Cost distribution is based on both the activity-based costing system and the conventional costing
system in the cost accounting system. For efficient functions, approximating the real prices of
goods is important Cost accounts are the type of accounting system intended to collect
operating costs by weighing the supply costs or production managemental financial problem
assessment The costing system Managers rely on accounting data generally and specifically on c
ost, as their cost can explain any task of the
company. Cost accounting is considered as a core principle of management accounting since it p
rovides the empirical means for ensuring that management successfully performs its reproductiv
ity, such as budgetary regulation, marginal cost, Normal costing, running costs and inventory co
ntrol. (Accounting Made Simple –by Mike Piper)

Inventory management
The management of stocks relates to the way that materials are managed
and monitored, used and processed by the organization in the manufacturing
of products it offers. Stock control system integrates bar-code inspection,
desktop applications, handheld devices and bar-code printers to improve
inventory management, including consumer products, materials, services
(Drury, 2015). It is also the case that volumes of the final product for sale are
regulated and tracked. The purpose of inventory management is to interpret
the current inventory levels correctly and to reduce overview and
interpretation of circumstances. Managers will have experience and will be
able to make adequate stock choices by the accurate monitoring of amounts
around the stock venue. One of the main investments and accounts for an
investment related to the goods sold is the inventory of a firm.
Inventory management functions: buying orders are made, inventory is
issued, relocated, changed and disposed of. In addition, they sell, collect,
bundle and ship goods (Drury, 2015). (Drury, 2015). Cycle reports and actual
inventory numbers, report creation, management, preparation and
distribution, and bar code labels are printed. The benefits of an
organization’s inventory control scheme include strengthening the
company's basics, improving inventory accuracy and improved business
workflow.
 Reporting budget
 Receivable account report
 Cost managerial report
 Report of performance
 Other reporting
Cost accounting is managerial technique that aimed to take company total production cost by
assessing variable costs and fixed cost of production as well. i-e lease expenses
 It is used internally by management to make business decision that are fully informed
 It is flexible to meet needs of management
 It consider both variable and fixed cost of production
 It has usually following types
1. Standard costing
2. Activity based costing
3. Lean costing
4. Marginal coting
These are the few types of managerial account system

Task #2
Micro Economics techniques:
Cost :
Cost accounting is managerial technique that aimed to take company total production cost by
assessing variable costs and fixed cost of production as well. i-e lease expenses
 It is used internally by management to make business decision that are fully informed
 It is flexible to meet needs of management
 It consider both variable and fixed cost of production
 It has usually following types
 Standard costing
 Activity based costing
 Lean costing
 Marginal coting
Cost Analysis.
Cost analysis is more of difficult because it usually involves more production unit.
By the use of this method review of the items services and related cost
solutions .In the present era many organizations hire purchase managers who
evaluate the value proposition of products by using past history ,general
experience and final decision by product owner.[ Held, J.S. & Posner, D. (1971).]
Cost Analysis has following major considerations
 Required personnel
 Total per hour work by personnel
 Evaluation
 Resource costing
 Indirect cost of project
The simplest argument about the use of cost analysis is that where market analysis is
not practical, it is used. This is generally because there are no alternative comparative
options or no associated ideas for a work have been submitted. Cost analysis is typically
required for new forms of testing or product creation work or solutions focused on
particular patents or products.[Costing by Kenneth Boyd (2012)] The cost analysis
problem is to attempt to assess equal value without any marketable reference.
Cost Volume profit:
Cost volume analysis profit is simplest argument about the use of cost analysis is that
where market analysis is not practical, it is used. This is generally because there are no

alternative comparative options or no associated ideas for a work have been submitted.
Cost analysis is typically required for new forms of testing or product creation work or
solutions focused on particular patents or products. The cost analysis problem is to
attempt to assess equal value without any marketable reference.
Marginal Costing:-
Solution:
DM= 10
DL =20
VPO= 5
Final marginal costing is =35
Contribution to one unit
Sold price of 1 unit=50
Less vc/unit=35
Equal contribution per unit =15
Marginal costing statement
Sales 50*18000 =900,000
LVC
DM 180,000
DL 360,000
POH100, 000
=640,000
Total contribution:
260,000
Fixed cost 100,000
Profit for month =160,000
Absorption costing:-
Solution:
DM: 10
DL:20
Produced overhead: 5
Total cost /unit: 35
The absorption cost of producing one unit is
Total cost/unit of output =35/1=35 per bike
Profit per month
Selling price 18000*50 =900,000
Less total cost =630,000
Equal profit 270,000

Marginal and absorption costing
marginal costing absorption costing
Main use to help with short-term
decision-making in the
forms of breakeven
analysis ,margin of
safety,
target profit, contribution, sales
ratio
limiting factors special order’
pricing
To calculate profit And to
calculate inventory valuation
for financial statements
How
does it
work?
costs are classified as
either fixed or variable,
contribution to fixed costs
is calculated as selling
price less variable costs
overheads are charged
to output through an
overhead absorption
rate, often on the basis of
direct labor hours or
machine hours
main focus marginal cost contribution all overheads charged
to output,
calculating profit, calculating
inventory values
Price Costing:
Fixed costing
For a certain duration, fixed expenses stay stable. These expenses, such as annual wages
or leases, are also time-related.
The rent of a house, for instance, is a fixed expense that a small business owner
negotiates with the landlord depending on the square footage necessary for his
activities. If the landlord occupies 10,000 square feet of land for ten years at $40 a

square foot, the rent for the next ten years will be $40,000 a month, regardless of the
gains or losses.
It is important to remember that, in the long term, fixed costs are not stable. Take the
above case. The rent will be the same until the room is filled by the corporation or until
the owner intends to raise the rent after the leasing period has expired. If the company
wishes to relocate to a new facility or spend extra, the cost of the company would
obviously rise.
Variable costing:
Variable cost adjusts simultaneously with the output-the variable cost will be negative
when the output is zero. By combining the actual volume of output with the variable
cost per unit of output, the total variable cost for a organization is determined.
Operational expenses, which can rise or decrease depending on market activity, are a
typical example of contingent costs. More running expenses may be borne by a growing
company, such as the salary of part-time workers employed for particular projects or an
uptick in energy costs, such as power, gas or water. You should manage the
discretionary costs, unlike set expenses, to leave space for income.[lipsta Ebstein 2009]
Normal Costing:
For the estimation of price of products selling and the cost of the different inventories,
the three commodity prices are included. If there is a disparity between the overall
amount of overhead costs incurred by the goods versus the total amount of real
overhead costs incurred, the difference is considered a deviation. If the size of the
difference is not important, the cost of products sold would normally be assigned to it. If
the difference is important, the expense of the goods sold, the inventory of work-in -
process, and the inventory of finished items should be prorated on the basis of their
overhead sums applied.
Standard Costing:
To measure the manufacturer's cost of product delivered and inventories, these
standard costs are used. If the individual costs differ just marginally from the normal
rates, the cost of the product delivered would be allocated to the resulting variances. If
the variances are important, on the basis of their regular cost quantities, they should be
prorated to the cost of products sold and to separate inventories.
Inventory Cost:
The cost of inventory is also defined as the annual percentage of the inventory volume.
It is important to determine inventory related costs and if not handled properly, it will
have an effect on finance management of an organization.
Inventory accounts for a large portion of an organization’s total assets and a decline in
the amount has a direct effect on the performance of a corporate enterprise. High
keeping costs foster a low level of inventory and require regular replenishment.

The cost of inventory is high and it is important to keep a watch on it; otherwise, by
cutting into the earnings, it may have a huge effect on the cash flow. If the organization
is aiming for long-term growth, find the correct mix.[Mark P Holtzman Accounting]
Types of Cost Inventory:
Ordering cost inventory:
 receiving cost
 clerical cost of preparing purchase order
 cost of electronic data interchange
 transportation cost
 cost of finding suppliers
[Inventory Costs Definition – Meaning, Types And Methods April 13, 2020 By
Hitesh Bhasin Tagged With: Sales management]
Expense covers overall expenses involved with inventory management, transportation and
acquisition and is a mandatory calculation for all organizations. The cost of inventory also
covers the expenses of shipping warehouses, pilferage of insurance, handling, deterioration,
breakage, royalties, obsolescence and capital opportunity costs.
Cost inventory:
Stock carrying costs apply to the expenditures paid for the handling of inventory and its
preservation. Owing to the nature of keeping the inventory for the transitional period, it is also
known as retaining costs. Usually, the holding expenses of stock before it is sold include
 storage space cost
 inventory space cost
 inventory service cost
 inventory financing cost
Shootout of stock out cost:
 emergency shipment
 disrupted production
 customer loyalty and reliability
Types of inventory cost System:
 First in first out
 Last in last out
Benefits of reducing inventory cost
Material cost
For other applications, investing less money on materials frees up cash. Reduced
delivery prices, reduced healthy insurance (since there would be less risk to

losses), less capital catching in with slow-moving goods and merchandise are
additional advantages of having less product. More often, ordering helps you to
compare rates and take advantage of seasonal clearance or discounts on
overstock.
Material Maintenance:
If, due to a large inventory, you rent large ware house , then lowering its amount
can result in lower costs. The savings include labor to stock, log and check your
inventory, aside from rent. You reduce the chance of significant fraud or harm,
some of which insurance does not cover. Furthermore, if you intend to apply for
a corporate loan, minimizing the company's costs illustrates strong management
skills for future creditors.[ costing Jill Gilbert Veltoyk (2003)]
Price of competitive:
If you work in an environment of competition a big city, the benefits from
inventory reduction would l help you more competently priced your goods or
services. The extra contracts you win would improve your company's visibility to
the community. Within your industry in your country, you will become a known
leader.
Increase profit
If you work in an environment full of , such as a big city, the benefits from
inventory reduction will help you more competitively priced your goods or
services. The extra contracts you win would improve your company's visibility to
the community. Within your industry in your country, you will become a known
leader.
Task #3
Budget
It is planed use of income and expenditure to potential at specific time and reevaluated budget
may be made for an entity .
These steps can help you creating budgets
Different type of budget
Three forms of government budget exist: the operating or existing budget, the
Budget for infrastructure or expenditure, and the budget for cash or cash flow.
As mention in [bugeting by Tag C (2001)]
Operating Budget:
It is popularly referred to as the cost of the goods sold and the sales or revenue

There are also different alternate types of budgets:
Six main budgeting techniques are
 Increment l Budget
 Activity based budgeting
 Value proposition budget
 Cash flow budgeting
 Zero budgeting
 Surplus budget
Incremental Budgeting:
The simplest, bit most abused, method of business budgeting is gradual budgeting, and it's
probability what you envision when conventional budget
Incremental budgeting can be measured very easily, and can make company-wide budget
changes simpler. For gradual budgeting, however, there are several challenges. You may be
raising an excessive budget, or you may have budget owners calling for a greater boost so that
they can explain if they are under budget. More nuanced statistics, such as inflation or industry
dynamics, is often more difficult to take into account in the operating budget.[Maire Lughran
Accounting]
Activity based budgeting:
For starters, if the corporation is aiming for a certain valuation or to make revenue of $100
million, you will work backwards to decide which practices would achieve the desired result and
then finance them accordingly. When you have end zone, activity-based budgeting can be
extremely successful. It is necessary, however, to carefully consider all business activities,
including those that do not explicitly contribute to a financial target, but to keep the activity
going smoothly. In order to achieve a certain financial target, activity-based budgeting
strategies work extremely well in short period
Value proposition budgeting:
Budgeting for the value proposition is all about, yeah, value. To assess the benefit it brings to
the organization, client, workers and stakeholders, as well as the expense, each and every
budget line . To show value for the organization, budgets need to be comprehensive and
justified, reducing expenditures that essentially do not provide value .
Zero based budget:
The simplest strategy for reducing excess expenditures is zero-based budgeting, but it is a far
more detailed procedure. Total monitoring and expenditure clarity encourages mindful
spending and saving. Zero-based budgeting, which is critical for the protection of a small
enterprise, may be the most efficient way to find ways to achieve savings targets.
Flexible Budgeting Method
When the budget is off target, what happens. To get you through times where the figures do
not add up, there are some budgeting techniques that you can use.

Pricing:
Pricing is the mechanism by which a corporation determines the price at which it prices its
goods and services and can be part of the marketing strategy of the company.
Pricing Strategy
When marketing a product or service, a company may use a number of pricing techniques.
Senior executives must first define the pricing status of the company, pricing category, pricing
capacity and their competitive pricing response approach to assess the most efficient pricing
strategy for a company.
Common Pricing Strategy:
Pricing a commodity is one of the marketing strategy's most critical elements. [Vijay S simpath
costing Principle ] .Pricing techniques usually include the five strategies that follow.
 Plus Cost price
 Competing price
 Valued price
 Price skimmed
 Penetration pricing
Prices done by computer:
 List price
 Partner
 Salesman
 Database is build
 Demand and Supply
Controlling Budget:
Controlling of budget is keeping an plan for upcoming budget.
Budget controlling process:
 Budget preparation
 Budget communication
 Result measurement
 Analysis
 Reporting
 Budget revision

Advantages:
Getting Maximum Profit
The budgetary regulation is directed at optimizing the company's revenues. Proper
preparation and coordination of the various tasks is carried out in order to accomplish
this goal.
Coordination:
The running of numerous agencies and industries is appropriately organized. The
budgets of multiple units have an impact on each other. In order to meet budgetary
goals, cooperation between different managers and subordinates is important.
Performance Measurement Tools
The running of numerous agencies and industries is appropriately organized. The budgets of
multiple units have an impact on each other. In order to meet budgetary goals, cooperation
between different managers and subordinates is important.[Mark P Holtzman (Editorial 1997)]
Expenses:
Expenditure planning will be comprehensive and there will be a consumption economy. The
money would be used to full use. Ultimately, the gains resulting from the problem would apply
to the sector.
Consciousness:
This creates budget understanding within the workers.
Incentives:
The financial management mechanism also requires remuneration compensation programmed
to be implemented. The use of such systems would be possible by comparing budgetary and
real results.[Warren Buffet Budgeting ]
Limitations in budget controlling:
Future uncertainty:
Budgets are planned for upcoming time. The effectiveness of a fiscal management mechanism
is reduced by potential uncertainty.
Budget revision:
In the premise that these circumstances will prevail, budgets are planned. Because of potential
uncertainty, circumstances presumed to warrant the adjustment of financial goals will not
prevail. The regular adjustment of priorities will decrease the value of budgets, and tremendous
costs are often included in revisions.

Reduce efficiency:
The goals are assigned to any person in the company under the budgetary management
framework. The general inclination of individuals is just to reach the goals. There will be some
successful people who may surpass the goals, but by meeting the targets, they can still feel
happy. Budgets may also act as restraints on managerial initiatives.
Problem in coordination:
Coordination between multiple departments depends on the effectiveness of budgetary
management. Weak output stems from the lack of cooperation between separate agencies.
Interdepartmental conflicts:
Coordination between multiple departments depends on the effectiveness of budgetary
management. Weak output stems from the lack of cooperation between separate agencies.
Top Management dependent:
The system of budgetary regulation relies on funding from top management. The leadership
should be passionate about the success of this structure and should have full support for it. If
there is a loss of help from upper management at any point, so this scheme will fail.
Costing System:
A costing mechanism is intended to document the costs incurred by a organization. The
framework includes a series of forms, procedures, controls and reports that are structured to
aggregate sales , expenses and profitability and report to management[Howard Shelly Finance
Management (viewd)].
Actual Costing System:
Real costing is called cost accounting, which uses actual prices, direct cost rates and actual
features used in manufacturing to calculate the cost of individual goods. Usually direct costs are
traced to a cost item or something that has an observable cost in an actual costing system.
Main management and Plan tools:
 Affinity Diagram
 Tree diagram
 Interrelationship
 Prioritization
 Activity networking
Affinity Diagram
The instrument is widely used in project management which allows vast quantities of
brainstorming proposals to be separated into categories for evaluation and study, depending
on their natural relationships. It is most sometimes used as a means of organizing notes and
perspectives from field interviews in contextual investigation.

Tree Diagram:
A tree diagram is one of the methods and strategies used both in certain contexts and in the
management of programmers. It is helpful for explaining the connexons between objects and
their component pieces. In programmers, the organizational breakdown structure (OBS),
resource breakdown structure (RBS), vulnerability breakdown structure (also RBS), and job
breakdown structure (WBS) are a good way to portray them. In addition to being useful for
communicating these systems, it may help to decompose the larger project components into
simpler, more functional units in the processes.[Jeremy Perel (accounting and finance 2001]
Inter relationship Diagram:
A tree diagram is one of the methods and strategies used both in certain contexts and in the
management of programmers. It is helpful for explaining the connexons between objects and
their component pieces. In programmers, the organizational breakdown structure (OBS),
resource breakdown structure (RBS), vulnerability breakdown structure (also RBS), and job
breakdown structure (WBS) are a good way to portray them. In addition to being useful for
communicating these systems, it may help to decompose the larger project components into
simpler, more functional units in the processes.
Matrix Diagram:
As a new management preparation technique used for evaluating and presenting the
relationship between data sets, a matrix diagram is defined. The diagram of the matrix shows
the relationship between two, three, or four knowledge groups.
What is PEST?
PEST is an acronym of Political, Social, and Economic, technological. In regards to the market
environment, this analysis is used to determine these four external variables .Basically, a PEST
study lets you decide how these variables can influence the business's output and operations in
the long run
SWOT:
A SWOT analysis is a collection of the strengths, vulnerabilities, opportunities and risks of your
company. The main aim of a SWOT review is to help companies gain a complete understanding
of all the variables involved in making a business decision. Before you agree to some kind of
business action, conduct a SWOT review, whether you are pursuing new strategies, revamping
internal procedures, considering ways to pivot or modifying a strategy into its implementation.
Using the SWOT review to find recommendations and solutions, concentrating on using
strengths and resources to resolve gaps and risks.[history by Praugh Hiterman]
Task #4

Bench Marker:
To conduct a financial report and associate the outcomes with other organizations in order to
determine the competitiveness, effectiveness and quality of a organization. Benchmarking is
the practice of comparing the success requirements and market procedures of a company to
other firms within their trade. Benchmarking is typically used to measure a company's efficiency
by relying on one or more specific metrics. Cost per unit, efficiency, errors per unit, or
otherwise, may be these metrics. The output assessment is then compared with that of other
businesses in the same market. Benchmarking is not only limited to financial operations; it can
also be applied for any company activity. Financial benchmarking will help to set practical
financial targets for the business. A significant number of business owners end up setting
targets that are too ambitious and dangerous, which, when unfulfilled, inevitably damages their
business. And if you set low goals, you can easily accomplish them, but you'll still be
underperforming. Therefore, setting financial-benchmarking-dependent targets is an optimal
approach to emerge in this ever-growing market. This process helps you to analyses your rivals
along with their strategies; using detailed metrics, we can assess their success and apply them
when setting targets for your organization. We strip away the risk of setting targets that are too
high or too low with benchmarking-based objectives. It helps you to formulate a robust plan
and set achievable targets for your market as you do financial benchmarking against your rivals.
To assist you with setting the benchmarks, it is advised to employ a business consultancy firm.
Ensure that the corporate adviser has the financial accounting experience to further develop
those goods or services.
In brief, financial benchmarking undoubtedly helps the organization to find important gaps in
resource management, allowing you to do it better-improving overall performance, reducing
costs, and recognizing future saving strategies. Will you want to use the financial reporting
principles to set new benchmarks? An outsourcing agency will assist you do the same thing. To
get the best offers, contact Cogeneses today. We give a free trial as well, so you can be
confident of what you are
Key Performance indicator:
Refer to a series of quantifiable metrics used to calculate the total long-term output of a
organization. In particular, KPIs help decide the strategic , financial and organizational
accomplishments of a business , especially relative to those of other companies within the same
industry.[Financial statement by Thomas R Itelson]
Financial key performance:
It is an observable value that shows how good a corporation is performing in terms of sales and
profit production. KPIs tracking demonstrate when a organization is meeting its long-term
objectives.
Non-Financial Key performance:
This covers steps related to customer interactions, personnel, events hold by company.

Importance of KPI:
it is usually used to say;
What gets measured gets managed.
This covers steps related to customer interactions, personnel, events, productivity, cycle time
and the supply chain or pipeline of the company. Among others, employee productivity,
community and capability both contribute to success. KPIs ease monitoring of results by
encouraging everyone not only to see what they're doing, but also what others are doing.This
openness means that everyone operates in the same direction, which simplifies communication
lines because of the "How are we doing?" response. Instead of being covered beneath
spreadsheets and resources or, worse still, behind estimates, it is packed into a simple number.
So, in an free, straightforward way to improve transparency, track your sales KPIs.
Budget target:
Means the amount of money allocated by the legislature or by the budget mechanism of the
agency to pay for a particular category of programmers, including planned adjustments in
caseload or rises in vendor cost. Budgetary management is a process that allows senior
executives to maintain sufficient expense limits. This regulation is necessary because there is an
detrimental effect on company earnings from spending excesses. [Financial statement by
Thomas R Itelson]
Finance Governess:
Means the amount of money allocated by the legislature or by the budget mechanism of the
agency to pay for a particular category of programmers, including planned adjustments in
caseload or rises in vendor cost.
Budgetary management is a process that allows senior executives to maintain sufficient
expense limits. This regulation is necessary because there is an detrimental effect on company
earnings from spending excesses.
Important is what to solve the problem
 It is key to produce regulatory reports
 It makes budget ,plans more accurate
 It results in clear ownership and accountability
 It results in owner ship
 It identifies risks more rapid.
Monitoring strategy
It is a method for evaluating change at regular intervals. It is the mechanism that takes place in
a project to regularly track and report events. It also includes getting feedback on the success of
the project.

Comaprison Of Two Companies:
The new development scenario will include less useful conventional management accounting
methods such as standard expense analysis and differential analysis, traditional budgeting and
cost volume benefit analysis. Performance in the present competitive setting will dramatically
boost companies' ability to compete internationally with resources or techniques like JIT, ABC,
TQM, process reengineering, life-cycle valuation and costing goals. Via a literature analysis, this
research explores the decline in four Asian countries: Singapore, Malaysia, China and India of
conventional and contemporary management transparency tools. The evidences examined
overall show that in the four countries there is a lack of use of contemporary management
accounting tools. There is a heavy use of conventional management accounting methods. The
paper ends with several suggestions for future research, the need of future experiments being
the most significant.
Accounting Management
It is the practice of writing corporate operations reports that assist executives to make short-
term and long-term decisions. By defining, evaluating, assessing, understanding and presenting
knowledge to management, it helps a company achieve its priorities. Leadership. You ought to
be able to direct the team in an effective way in order to be an efficient boss. [Financial
statement by Thomas R Itelson]
Leadership:
To be an efficient manager, you should be able to handle the staff efficiently. Being a manager
poses a lot of responsibility and it is important to be able to lead a team.
Experiences:
If you have experience working in a business atmosphere and leading a squad, it would be
overwhelming to move up as a boss. Volunteering is a great way to gain management expertise,
whether within the profession or through a non-profit sector. Ask whether it's fundraising or
organizing an event to organize and generate events more.
Communicating Skills:
The ability to connect with the staff is a successful boss. This not only means sharing work
responsibilities and priorities, but also listening to and engaging with the team to get their task to a good
end.
Management of Knowledge:
Experience is a boss that is necessary, but awareness is still necessary. A bachelor of
management or a Master’s degree in leadership or project leadership is offered to the
management. Manager. You will also have a degree in project management, innovation, ethics
or managing human capital[Mark j. Kohlar (2003 editorial)

Organizations:
There's a good risk that the staff you supervise would also not be if you're not coordinated in
your position. Online, you will find several tools to brace yourself. A personal calendar can also
be purchased on the phone or an app is added to recall appointments, items you need to
complete every day etc.
Managing Time:
Another significant aspect in being a successful manager is time control. When you're late per
day, staff fined it's easy also to be late. In order to plan your day to make sure that you have
time to connect with your colleagues and accomplish goals during the week, it is also important
to monitor time.
Reliance:
A boss leading a team must be effective. This means that you are available to your employees,
perform mission, and support your team, if necessary.
Delegates:
If you do not know how to delegate duties and projects, your work as a supervisor will be even
more challenging. Don't be intimidated to challenge the team to get a job done. You may say, it
is easier to do it all by yourself, but it will take more of your life already packed and you won't
inspire your staff to do what they were hired to do.
Be Confident:
You have to depend on know-how, experience and decisions to be an successful leader. This
means you shouldn't be harsh or behave as tough as your employees. For a reason, though,
you're in a management role so be proud and inspire the team.
Employees respect:
When you don't respect your coworkers there will definitely be tension in the workplace. Have
your time and expertise in mind, listening and communicating, and being a source of
information and consultation. [Mark j. Kohlar (2003 editorial)
Important techniques for management:
1. Finance Planning:
Maximization of profits is the primary goal of any corporate enterprise. By undertaking
adequate or sound financial preparation, this aim is accomplished. Financial planning is
therefore known as the strongest instrument for meeting corporate targets.
2. Finance Analysis:
Significant financial accounts are the benefit and loss account and the balance sheet.
For various times, these declarations are evaluated. This method of research allows the
management to consider the pace of growth of the market concern. Via comparative
financial statements, traditional size statements and ratio analysis, this analysis is
performed.

3. Cost Accounting:
It provides product-wise cost info, process-wise, department-wise, branch-wise and the
like. Such expense data were compared to a fixed one. This two-cost analysis helps the
management to determine the factors for the discrepancy between both prices.
4. Funding Analysis:
It offers cost information in terms of the commodity, process-wise, department-wise,
branch-wise and the like. Such cost data are compared with a set one. This two-cost
approach allows the management to analyses the variables for the difference between
the two costs.
5. Cash Analysis:
It is possible to figure out the flow of cash from one time to another via this study. In
addition, the causes for cash equilibrium and shifts between two cycles are often
established. In a time, it studies the cash from activity and the flow of cash
6. Standard cost:
Predetermined costs are normal costs. For measuring real results, it offers a yard stick.
It is used to classify the factors, if any, for the deviations.
7. Marginal Cost:
It is used to set the sale price, pick the best selling blend, make the best use of
insufficient raw materials or services, make or import decisions, approval or refusal of
bulk order and international order, etc. The fixed expense, variable cost and
contribution are the reason for this.
8. Budget Control:
Future financial demands are calculated and planned based on an orderly basis under
budgetary management techniques. It is used to regulate the financial performance of
corporate interests. Business activities are guided in the desired direction.[Narrrative By
Aswath Damadaran(2003)]
Conclusion:
In this report we discuss management accounting management accounting system
management accounting principles, we learn about cost analysis microeconomics techniques,
inventory cost and types of inventory cost system we also see aspects of common pricing
strategies, and performance management tools. We also learn about bench marker,
importance of bench marker, importance of KPI communicating strategies budget, budget
reports and budget targets.

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Drury, C. (2012).Management and Cost Accounting (8th ed.). Andover, Cengage
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Huazhong University of Science and Technology
Modern Auditing and Assurance Services, 6th Edition,
by Philomena Leung, Paul Coram, Barry J. Cooper, Peter Richardson
Modern Auditing And Assurance Services 6E Wiley E-Text: Powered By
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Modern Auditing And Assurance Services 5th Edition eBook Card Perpetual
by Philomena Leung September 2011,
Modern Auditing & Assurance Services, Study Guide, 5th Edition
by Robyn Cameron June 2011
Modern Auditing and Assurance Services, 5th Edition
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March 2011
Auditing and Assurance in Hong Kong, 4th Edition
Author: Peter Lau; Nelson Lam, Publisher: Pilot Publishing,
ISBN: 9789882058651
Published In: July 2014
Modern Auditing: Assurance Services and the Integrity of Financial Reporting,
8th Edition
William C. Boynton, Raymond N. Johnson August 2005, ©2006
Introduction to Management Accounting Global Edition 16th Edition, Charles
Horngren, Gary Sundem, William Stratton, Dave Burgstahler, Jeff Schatzberg
Feb 2013
Drury is good for Management Accounting; Brenda Porters book is good for
Audit...https://www.amazon.co.uk/Principles-External-Auditing-Brenda-Porter/
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