The Role of Accounting in an Organisation

This blog explores the role of accounting in an organization, covering topics such as the purpose and scope of accounting, the accounting function in decision making, the role of technology in accounting, and ethics and compliance in accounting. It also includes a case study on budgeting and budgetary control in small businesses.

Student Name/ID Number
Unit Number and Title Unit 5: Accounting Principles
Academic Year Semester 1, Academic year2022 – 2023
Unit Tutor Dr.Nguyen Thi Thanh Mai, Dr.Le Thi Thu Ha and Ms.Nguyen Thi Kieu Trang
Assignment Number and Title A1: Accounting in context and Budgetary control (1 of 2)
Issue Date 10th October 2022
Video Clip Submission Date To be announced by office
IV Name Ms.Nguyen Thi Kieu Trang (IV),Mr. Martin Ortega-Azurduy(Asst Lead IV), Dr
Doti Chee (Lead IV)
IV Date 21stSeptember 2022
Submission Format
Submission is in the form of a 10-minute individual presentation using relevant software. Your video clip must
include clear voice, face and ppt slides.
The presentation slides must be submitted along with speaker notes as one copy into the Turnitin system, while the
video clip has to be submitted into the Flipgrid system.
You are required to make effective use of PowerPoint headings, bullet points and subsections as appropriate. Your
speaker notes should be written in a concise and precise manner using 1.5 spacing, type face in Times New Roman
or Arial and font size 12. A bibliography should be provided using the Harvard referencing system. Inaccurate use of
referencing may lead to issues of plagiarism if not applied correctly.
You are advised to write between 2,800 to 3,000 words and the word limit is 3,000 words. This word limit does not
include the contents page, the organization profile, tables, diagrams, appendices or references.
Your submission shall include a portfolio of evidence complied from the evidenceproduced for the video
clip along with a blog and memorandum to be included in the speaker notes.The memorandum must be
accompanied with Excel spreadsheet (raw data will be supplied by your tutor). You will insert sections of
your spreadsheet into the memorandum.
Unit Learning Outcomes:
LO1Examine the context and purpose of accounting
LO4 Prepare budgets for planning, control and decision-making using spreadsheets.
Transferable skills and competencies developed
 Reasoning and analytical skills
 Written communication using a range of media

 Manipulation and interpretation of data using spreadsheets
 Effective communication of relevant information across the organisation and to appropriate
stakeholders
 Creation and interpretation of information, showing how that information can be used most
effectively to add value to an organisation
Vocational scenario
RSM Vietnam Auditing & Consulting Company Limited is a company providing auditing, accounting and
professional business consulting services, established in July, 2001. RSM Vietnam has been a member of
International RSM Group since 2012. RSM Vietnam has more than 300 experts and staff, serving publicly
listed companies, multinational corporations and private businesses in various fields. Last year, the
company turnover was $300 m with 35 per cent deriving from non-Vietnam markets, principally in other
parts of the Asia Pacific region. The company also has a policy of taking on smaller niche clients, where
they feel there is potential for fast growth.
Role
You have recently joined the company as a Graduate Trainee attached to their Vietnam SME (Small and
Medium Enterprises) Unit, offering accountancy and financial services to businesses that typically have a
turnover ranging from $0.5 m to $15 m. As part of your ongoing training, you have been asked to
undertake some activities.
Having successfully completed your six-month probation as a Graduate Trainee at RSM Vietnam, you
have now been attached to a unit in the firm that deals with the provision of accountancy and consultancy
services to small businesses that are typically set up as sole traders, not for profit and partnerships. The
firm is careful about which small and emerging businesses it works with as it seeks to spot growth
potential and identify and work with clients that have scalable business models.
Assignment activity and guidance
As a graduate trainee, your supervisor, one of the firm’s Key Account Managers, has asked you to prepare
a blog that will be used to market and promote its accounting services to new and existing clients. The
working title you have been given for the blog is ‘The role of accounting in an organisation’. The blog
must be presented as an online blog in an engaging and practical way, covering relevant academic theory,
making use of, for example, headings, images and illustrations. Your blog should include the following,
but is not limited to:
• the purpose and scope of accounting in complex operating environments
• a critical evaluation of the accounting function in informing decision making and meeting stakeholder

and societal needs and expectations
• the main branches of accounting and job skillsets and competencies
• accounting systems and the role of technology in modern-day accounting
• issues of ethics, regulation and compliance and the extent to which they are constraints or threats to the
organisation.
You have now been asked to work with a start-up business, VietStar Ltd, that your firm has just taken on
as a client. The business is particularly in need of support and guidance with budgeting and how it can be
used to inform efficient resource allocation and support effective control and decision making. VietStar
Ltd is to be incorporated on 1 June. The opening statement of financial position of the business will then
be as follows:
£
Assets
Cash at bank 90,000
Share capital
£1 ordinary shares 90,000
During June, the business intends to make payments of £45,000 for a leasehold property, £18,000 for
equipment and £12,000 for a motor vehicle. The business will also purchase initial trading inventories
costing £25,000 on credit.
The business has produced the following estimates:
1 Sales revenue for June will be £10,000 and will increase at the rate of £2,200 a month until September.
In October, sales revenue will rise to £25,000 and in subsequent months will be maintained at this figure.
2 The gross profit percentage on goods sold will be 25 per cent.
3 There is a risk that supplies of trading inventories will be interrupted towards the end of the financial
year. The business therefore intends to build up its initial level of inventories (£25,000) by purchasing
£1,000 of inventories each month in addition to the monthly purchases necessary to satisfy monthly sales
requirements. All purchases of inventories (including the initial inventories) will be on one month’s credit.
4 Sales revenue will consist of 60% of cash sales and 40% of credit sales. Credit customers are expected to
pay two months after the sale is agreed.
5 Wages and salaries will be £1,200 a month. Other overheads will be £600 a month for the first four
months and £700 thereafter. Both types of expense will be payable when incurred.
6 Eighty per cent of sales revenue will be generated by salespeople who will receive 8 per cent
commission on sales revenue. The commission is payable one month after the sale is agreed.

7 The business intends to purchase further equipment in November for £8,500 cash.
8 Depreciation has not been included in the overheads mentioned in 5 above.
Having completed the first activity, you have now been asked to work with a small manufacturing
business, GreenField Ltd, that your firm has just taken on as a new client. GreenField Ltd manufactures a
single product, the Metacloud. Budgeted results and actual results for June 2022 are shown below.
Budget Actual
results
Production and sales of
the Metacloud (units) 3,000 4,500
£ £
Sales revenue (a) 30,000 45,000
Direct materials 6,900 9,500
Direct labour 5,400 7,300
Maintenance 2,550 4,500
Depreciation 2,500 2,500
Rent and rates 2,000 2,300
Other costs 5,600 7,000
Total costs (b) 24,950 33,100
Profit (a) – (b) 5,050 11,900
The finance director of GreenField Ltd is inexperienced in management accounting and is not sure whether
the variances are meaningful for purposes of control. As can be seen from the above table, costs were
higher than budget because the volume of output was also higher; variable costs would be expected to
increase above the budgeted costs in the fixed budget. There is no information to show whether control
action is needed for any aspect of costs or revenue.
Your supervisor suggests you that for control purposes, it is necessary to know the answers to questions
such as the following.
Were actual costs higher than they should have been to produce and sell 4,500 Metaclouds?
Was actual revenue satisfactory from the sale of 4,500 Metaclouds?
After a short meeting, you have agreed with your supervisor that the correct approach to budgetary control
for GreenField Ltd is as follows:
(a) Identify fixed and variable costs.
(b) Produce a flexible budget using marginal costing techniques.
In the meeting, your supervisor and you also had the following estimates of cost behaviour:
a) Direct materials, direct labour and maintenance costs are variable.

b) Rent and rates and depreciation are fixed costs.
c) Other costs consist of fixed costs of £2,000 plus a variable cost of £1.2 per unit made and sold.
You have been asked to prepare a briefing report that includes the following:
Preparation of a cash budget for VietStar Ltd for the six-month period to 30 November.
Production of a flexible budget to present the budgetary control analysis for GreenField Ltd.
An evaluation of the role that budgets play in the effective planning and control of resources in an
organisation such as GreenField Ltd’s. This will include both benefits and any limitations of using
budgets and the extent to which they can help identify problems and corrective actions.
An outline of a range of budgetary control solutions, with justification, to support organisation decision
making and ensure efficient and effective deployment of resources.
Recommended Resources
Please note that the resources listed are examples for you to use as a starting point in your research –
the list is notdefinitive
Weblinks
Accounting Coach courses. Available at:
https://www.accountingcoach.com/accounting-basics/explanation
The Association of Chartered Certified Accountants ACCA). Available at:
https://www.accaglobal.com/gb/en.html
Chartered Institute of Management Accountants. Available at:
https://www.cimaglobal.com/
Indeed Career Guide to Memo Writing. Available at:
https://www.indeed.com/career-advice/career-development/memo-writing-guide
HubSpot. How to write a memo: Templates & examples. Available at:
https://blog.hubspot.com/marketing/how-write-memo
HN Global
HN Global (2021) Reading Lists. Available at:
https://hnglobal.highernationals.com/learningzone/reading-lists
HN Global (2021) Student Resource Library. Available at:
https://hnglobal.highernationals.com/subjects/resource-libraries
HN Global (2021) Textbooks. Available at:

https://hnglobal.highernationals.com/textbooks
Textbooks
Atrill, P. and McLaney, E. (2018) Accounting and Finance for Non-Specialists.
11th Ed. Harlow: Pearson
Weetman, P. (2019). Financial and Management Accounting: An Introduction.
Harlow: Pearson

Learning Outcomes and Assessment Criteria
Pass Merit Distinction
LO1Examine the context and purpose of accounting
D1: Critically evaluate the role of
accounting in informing decision-
making to meet organisational,
stakeholder and societal needs
within complex operating
environments.
P1 Examine the purposeof the
accounting functionwithin an
organisation.
P2 Assess the accountingfunction
within theorganisation in the
contextof regulatory and
ethicalconstraints.
M1 Evaluate the
contextandpurpose of
theaccounting function inmeeting
organisational,stakeholder and
societalneeds andexpectations.
LO4Prepare budgets for planning, control and decision making
using spreadsheets
D3 Justify budgetary control
solutions and their impact
onorganisational decision making
to ensure efficient and effective
deployment of resources.
P6 Prepare a cash budget from
given data for an organisation
using aspreadsheet.
P7 Discuss the benefits and
limitations of budgets and
budgetary planning, and control
for an organisation.
M4 Identify corrective actions to
problems revealed by budgetary
planning and control for effective
organisational decision making.