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Enhancing Financial Governance and Performance: A Balance Scorecard Approach

   

Added on  2019-12-18

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MANAGEMENTACCOUNTING
Enhancing Financial Governance and Performance: A Balance Scorecard Approach_1

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3Management accounting and financial accounting......................................................................3Different type of management accounting systems.....................................................................4TASK 2............................................................................................................................................5Preparation of income statement by using absorption and marginal costing method.................5TASK 3............................................................................................................................................6Different type of budget...............................................................................................................6TASK 4............................................................................................................................................8Defining balance score card and implementation of same..........................................................8Implementation of balance scorecard..........................................................................................8Way in which balance scorecard can be used to identify and solving financial problems..........8Use of balance scorecard to improve financial governance and development of effectivestrategies......................................................................................................................................8CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................10
Enhancing Financial Governance and Performance: A Balance Scorecard Approach_2

INTRODUCTIONManagement accounting is the one of the important field that is used to measure the firmperformance in the systematic manner. In the current report difference between financial andmanagement accounting is explained in detail. Along with this, in the report different sort ofmanagement accounting systems are discussed briefly. Additionally, cost and profit is alsocomputed by using marginal and absorption costing method and results are interpreted. At end ofthe report, budget preparation process is explained and balance scorecard is discussed in detail. TASK 1Management accounting and financial accounting1 Difference between management and financial accounting There is a huge difference between the management and financial accounting.Management accounting refers to the subject or area where entire cost related facts are recordedand analyzed to measure the firm business performance. On other hand, financial managementrefers to the subject wherein different things like capital structure and firm performance ismeasured in respect to different areas like liquidity and cost control etc. It can be said thatmanagement and financial accounting are different from each other in terms of use andapplication (Zimmerman and Yahya-Zadeh, 2011). There are different sort of techniques thatcomes in the management and financial accounting. In the management accounting some of themethods that comes are variance analysis, break even analysis, budget and marginal as well asabsorption costing. On other hand, in case of financial accounting techniques that used are ratioanalysis and preparation of income statement and balance sheet etc. This reflects that there aredifferent methods that comes in both sort of accounting.2Importance of management accounting as a decision making tool for department managersManagement accounting information have a due importance for the managers because byusing same they can make wise decisions in respect to their departments. There are two differentdepartments that make a very heavy use of the management accounting information likeproduction and material department (Macintosh and Quattrone, 2010). Production departmentmanager on the basis of available information that is related to the management accountingdetermine number of units that must be produced and number of raw material units that will beneed to produce goods at the workplace. Similarly, on the basis of management accounting
Enhancing Financial Governance and Performance: A Balance Scorecard Approach_3

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