Strategic Information Systems Solved Assignment
Added on 2021-01-03
15 Pages4454 Words241 Views
Strategic information systems
Table of ContentsINTRODUCTION...........................................................................................................................1Task 1...............................................................................................................................................1P1 management accounting and its essential requirements of different types of managementaccounting system.......................................................................................................................1P2 Different methods of management accounting reporting......................................................4TASK 2............................................................................................................................................5P3 calculation of costs and preparation of income statements....................................................5P4 advantages and disadvantages of various planning tools of budgetary control.....................8Effectiveness of business in solving financial problems through budgetary controlling..........10CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................13
INTRODUCTIONManagement accounting system is a branch of management which helps the business inenhancing capabilities of organisation regarding enhancement of financial position of thebusiness. It can be defined as application of knowledge and skills of professionals in order toformulate policies, and strategies in order to perform planning and control activities efficientlyand effectively as well. The present study gives description regarding various methods andessential requirements of different types of management accounting system. It also shows propercalculation of cost and preparation of income statement using different techniques. The reportdescribes advantages and disadvantages of various planning tools of budgetary control used byNero ltd. Along with adaption of various management accounting system with a view to respondto financial problems of business.Task 1P1 management accounting and its essential requirements of different types of managementaccounting systemManagement accounting:Management accounting is an accounting techniques which provides importantinformation to management as to develop effective plans and strategies of the business in orderto enhance organization's capacity and financial position (Höglund, 2016).Management accounting can also be termed as cost accounting, which performs itsactivities to analyse the total cost of business in order to prepare financial reports and help themanagement in making plans and budgets regarding financial activities of the business.Management accounting system:Management accounting system can be defined as method and technique of formulatingplanning and controlling system in order to maximize profit and efficiency of the businessthrough evaluation of business's past performance and comparing it with its present performance.Management accounting system is a major part of organisation as it influences thefinancial position of the business and also helps in enhancing profitability. It helps theorganisation in planning related to cash and investment, budgeting, and provides professionaladvice to the business related to financial activities of the business.Difference between financial and management accounting1
BasisFinancial accountingManagement accountingMeaning Financial accounting refers to a system toprepare financial statements of businessfor external parties of company (Smith,2017).Management accounting is asystem to provide informationto the management and helpthem in developing moreeffective plans fororganisation.AimProviding information to external users ofcompany about financial position ofbusiness like, customers, creditors, etc.To provide relevantinformation to managers tohelp them in taking effectivedecisions.UsersBoth internal and external parties can useit.It can be used by managementof business only.Essential requirements of different management techniques:Cost accounting system: cost accounting is a system of management through which itanalyses approximate cost of manufacturing goods. It provides specific tools tomanagement like standard costing, budgetary control, marginal costing etc. which areapplied by managers as to have better control over the cost of business.Benefits:▪It helps managers in inventory management, analysis of profitability of business,identifying cost efficiency of organisation, etc.▪Through cost accounting techniques, managers enable to predict organisation'stotal production cost as to enhance the efficiency of the business and increase itsprofitability.▪Cost accounting predicts cost of organisation which is being compared by themanagement with the actual cost of to determine the performance and efficiencyof the business.▪It helps the managers in having effective inventory control and cost control inorder to increase efficiency in financial activities (Maskell, Baggaley and Grasso,2016).2
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