University Accounting for Decision Making Online Exam Solution

This document presents a comprehensive solution to an online accounting exam focusing on accounting for decision making. The solution encompasses several key areas including the principles of performance management systems, construction of balanced scorecards for industrial manufactur...Read More

Accounting for decision
making (Online exam)

Table of Contents
1..................................................................................................................................................3
a) Key principles of Performance management system........................................................3
b) Construction of balanced scored card for industrial manufactory company to achieve
financial and non financial objectives....................................................................................3
c) Single performance measurements system to match perspective of multi territory .........3
4..................................................................................................................................................4
a. Explaining three type of risk attached to new market condition........................................4
b. Presenting the specific sources of risk and remediation actions to deal with risk.............4
i...............................................................................................................................................4
ii..............................................................................................................................................4
c. Explaining why three generic risk do not apply equally to specific cases.........................4

1
a) Key principles of Performance management system
There are several principles that play important role in management of performance system.
Some of key principles are being honest and open about performance of each department of
organization, keeping emphasis on development and performance of each employee, there
should be system that review performance in effective manner, always being in touch of
proper paper work. These are some key principles that finance department should keep in
mind while practicing each activity in organization. Balance score card is a performance
measuring tool that make easy for business to make structure report for working of
employees so that it can monitor and control cost arising from such activities. In the case the
company has not measured performance effectively. BSC tool will help new CFO to work
efficiently so that it can improve its image in market by taking corrective actions.
b) Construction of balanced scored card for industrial manufactory company to achieve
financial and non financial objectives
Balance score card is effective tool that help industrial manufacturing company to measure its
performance by making report. These framework are sue to evaluate the financial, process of
internal management and growth of organization. The BSC helps to visualize strategy of
business to know map of working to achieve its all objectives. for creating BSC for such
manufactory company, the management need to evaluate its objective and goals like leading
in innovation, retain customers, increment of sales revenue. Create a strategic map so that it
can reach those objectives in productive way, and the last step is delineation measures so that
company can evaluate success of each objective. These are the steps to construct BSC for
company of manufacturing.
c) Single performance measurements system to match perspective of multi territory
stakeholder of every territory want the company to perform in best manner. With the respect
to this every organization’s stakeholder want to earn good profitability, good image and
success of firm. a bad goodwill of company can affect interest of stakeholders. Perspective of
stakeholders like customers, suppliers, investors etc. influence success or failure of
organization. Customers will not buy products of those companies whose do not fulfill the
requirement of their employees and try to make goods with cheap resources. BSC can be used
by organization to convince all stakeholders that performance of organization has been
measured by using a standard tool of performance management system.

4.
a. Explaining three type of risk attached to new market condition
 Quantity risk: When there is no climatic policies then fossil fuel would be cheap but
when these are come to an end then suddenly the prices increases. In the same way,
quantity would be decreases and that is why, according to new market condition,
quantity of cars and vehicles will be decreases.
 Uncertainty risk: As the fossil fuel will come to an end then climatic condition is
considered another risk because after such energy, entire world will depend upon
advance technology i.e. electric cars, heat pumps and focused upon renewable energy
sources. Thus, this fluctuation in the market will affect the changing need of people
and dependency as well.
 Revenue risk: The trend in fossil fuel uses reflect that oil and natural gas could be
still used for several decades but this in turn increase the prices when new business
model will be opted and this in turn lead to financial risk.
b. Presenting the specific sources of risk and remediation actions to deal with risk
i.
In order to move towards new business model, the company source of risk is fall
under the revenue risk because the prices of such plans will be higher because it is newly
established business. Therefore to mitigate the same, effective strategies will be implemented
and keep concern to experts that helps to solve the revenue risk within new business market
conditions.
ii.
If new laws are implemented then this the source of risk is legal risk in which either
company has to comply with laws and regulation or convert the business into new one. Thus
to mitigate the same, risk register must be maintained that helps to identify the important laws
and regulation which need to be adhere. On the other side, X- Hell should hire new
employees who start introducing electric cars so that the problem minimized.
c. Explaining why three generic risk do not apply equally to specific cases
All the generic risk identified above do not applied equally in two different market
condition of X- Hell because it is not easy for the company to convert into new model as it
required enough planning. Also due to changing trend of market, companies are also start

introducing the product as per the need, thus it leads to uncertainty of risk. In addition to this,
it is not possible to apply equally all the risk into two specific cases because each situation is
different and various strategies are also implemented in order to solve the same. That is why,
it is not suited in all the situations.