Financial Management Report: Techniques, Fraud and Ethics Analysis

This report delves into various aspects of financial management, commencing with an exploration of effective decision-making processes, encompassing diverse approaches, techniques, and influential factors. It proceeds to examine stakeholder management, highlighting the significance of aligning objectives and addressing conflicts among different stakeholder groups. Furthermore, the report assesses the value of management accounting techniques in maximizing stakeholder value and controlling costs, specifically focusing on marginal analysis and capital budgeting. The report also covers fraud detection and prevention techniques and the application of ethical decision-making principles. The assignment concludes with a reflective analysis of the key concepts discussed, offering a comprehensive overview of the subject matter and its practical applications. The report is structured into sections that provide a clear understanding of the subject.

Financial
Management

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................1
SECTION A.....................................................................................................................................1
1. Evaluation of various types of approaches, factors and techniques that are used in effective
decision making...........................................................................................................................1
2. Stakeholder management and different types of conflicting objectives of various groups of
stakeholders.................................................................................................................................2
3. The value of different management accounting techniques in maximising the value of
stakeholders and cost controlling.................................................................................................3
4. Various techniques that are used for fraud detection and prevention and the approach for
ethical decision making...............................................................................................................3
5. Reflection regarding understanding of all the aspects from all the above questions...............4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Financial accounting could be defined as the technique which is used by businesses for
the purpose of formulating final accounts. Main purpose of is to meet expectations of all the
stakeholders such as creditors, investors, shareholders etc. There are three different types of
financial statements that are prepared with the help of it. These are profit and loss account,
balance sheet and cash flow statement (Al Breiki and Nobanee, 2019). All of them guide to
evaluate actual profitability and liquidity of business so that strategic decisions for future could
be formulated. This assignment is focused with different aspects that were analysed while
performing the management practice for the client. It covers different topics such as range of
approaches, techniques and factors that contribute in effective decision making, stakeholder
management and proper management of all conflicting objectives of different groups of them,
value of management accounting techniques. Additionally, various techniques of fraud detection
and prevention along with reflection on understanding of all the key aspects of all the questions
is also covered in this report.
SECTION A
1. Evaluation of various types of approaches, factors and techniques that are used in effective
decision making
Effective decision making is the process of formulating of such decisions that can help to
grow the business in future. It is very important for all the companies to make sure that they are
paying attention towards it as it can help to deal with all the negative situations that may take
place in future. There are various types of approaches, techniques and factors that contribute in
decision making process. All of them could be understood with the help of following discussion:
Analysis of actual position of business: It is one of the common approaches which are
used by businesses for the purpose of formulating long term objectives. While planning to meet
al the objectives it is very important for organisations to make sure that they are able to analyse
the actual position of business so that effective decisions for future could be formulated (Apte
and Kapshe, 2020).
Brain storming: It is a technique which is used in effective decision making. While
using it all the senior authorities of the company sit together and brainstorm about the ways
which can contribute in the development and growth of business. This technique is very
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beneficial for all the businesses as it can contribute in the attainment of all the long-term
objectives and deal with all the issues that are affecting functionality of business.
Cost or benefit analysis: It is also a technique which is used in effective decision
making by most of the companies. With the help of it all the costs that are involved in operations
along with the profits related to same activities are identified so that strategies for future could be
formulated (Chandra, 2020).
Risk: It is one of the key factors which are focused by the organisations in effective
decision making. While planning to formulate decision for future it is very important for
companies to analyse all the potential risks that can leave negative impact upon business. When
all the decisions will be focused with risk then it can help to deal with all the issues in systematic
manner.
2. Stakeholder management and different types of conflicting objectives of various groups of
stakeholders
Stakeholder management could be defined as the process of managing all the
stakeholders of the organisation by trying to meet all their expectations from business. It is also
focused with maintaining good relations with all the stakeholders so that their interest in business
could be retained for long run in future. There are two main groups of stakeholders these groups
have different objectives that are conflicting in nature. It is very important for all the entities to
make sure that all such types of interests are managed in systematic manner. Description of all
the objectives along with the groups is as follows:
Internal stakeholders: All the stakeholders that are internally linked with the
organisations are known as internal stakeholders. These are employees, managers etc. Main
objective of them is to enhance performance of business so that business can grow. In order to
maintain their objective, it will be very important for all the companies to make sure that all the
strategies that are formulated for businesses are able to meet their expectations (Madura, 2020).
External stakeholders: The external parties of an organisation that are interested in the
business performance are external stakeholders. Some of them are investors, creditors, suppliers
etc. The main objective of them is to analyse actual performance of business so that they can
formulate decision regarding making investment and providing credit. Objectives of them could
be managed by the companies by maintain the financial position.
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3. The value of different management accounting techniques in maximising the value of
stakeholders and cost controlling
Management accounting could be defined as the approach which is used for the purpose
of formulating internal reports so that details regarding actual position of business could be
shared with the internal stakeholders such as managers, employees, shareholders etc. Some of the
key objectives of the business entities are maximising value of shareholders and controlling costs
for business. There are various types of approaches that are used for fulfilment of such
objectives. Description of all of them is as follows:
Marginal analysis: It is a technique of management accounting which is mainly focused
with cost controlling objective. With the help of it additional benefits of an activity compared to
the extra cost of production could examined. When the managers will be able to analyse all the
additional costs then they can formulate decisions for future to reduce the costs of control them.
It is one of the main approaches that facilitate the controlling of all such types of expenses that
are increasing overall cost of business. It is a tool which is used in decision making by most of
the companies so that all the predetermined objectives such as higher profits could be attained.
Capital budgeting: It is an approach which is used by businesses to compare all the
investment options that are available to them so that they can select the best alternative to invest
funds. With the help of it, overall value of shareholders could be enhanced as it helps to enhance
their satisfaction level (Mitchell and Calabrese, 2019). For example, if a company is willing to
invest 500000 pounds in a project and it is having two different options for the same then it can
use various approaches of capital budgeting to evaluate both of them. Some of the main
approaches of it are net present value, payback period, internal and accounting rate of return.
When capital budgeting will be used then best suitable option for investment will be selected
which will help to enhance the value of shareholders within the entity.
4. Various techniques that are used for fraud detection and prevention and the approach for
ethical decision making
For all the business entities it is very important to make sure that their reports and records
are free from frauds. For this purpose, fraud detection prevention is required to be focused. It is
also very important for businesses to make sure that they are using different types of techniques
for the same purpose. Description of both of them along with the techniques that are used for
them are as follows:
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Fraud detection: The process which is focused by all the business entities for the
purpose of identifying all the false presentations in the books is known as fraud detection. It is
very important for all the organisations to make sure that they are able to detect all the frauds so
that transparent records could be generated. One of the key techniques which is used by
companies for the purpose of detecting the frauds is monitoring of all the transaction. With the
help of it, the businesses can detect the fraud in the books.
Fraud prevention: It could be defined as the process which is followed by businesses to
make sure that they are able to prevent all the frauds for business. The technique which could be
used for this purpose is implementation of internal control. With the help of it all the business
entities can make sure that all the frauds are prevented and dealt in systematic manner (Shapiro
and Hanouna, 2019).
Ethical decision making could be defined as the process of formulating such decisions
that are focused with ethics. With the help of it, businesses can establish a positive market image
because all the operational activities will be executed in ethical manner. One of the key
approaches of ethical decision making is utilitarianism. It is used to determine right from wrong
by paying attention towards outcome of each and every action. It can guide businesses to make
sure that they are formulating decisions by evaluating outcomes of them (Yuniningsih, Pertiwi
and Purwanto, 2019).
5. Reflection regarding understanding of all the aspects from all the above questions
The above questions were focused with different aspects. With the help of them,
understanding regarding different components of management and financial accounting has been
enhanced. It has facilitated me to develop knowledge about effective decision making and the
approaches, techniques and factors that are focused for same purpose. Apart from this, I have
also understood that why stakeholder management is very important for businesses and the way
in which conflicting objectives of all the groups of them should be managed (Zada, Yukun and
Zada, 2019). These questions helped me to understand the value of management accounting
techniques such as marginal analysis and capital budgeting to control cost and enhance
shareholder’s value. There are various types of techniques that are used for fraud detection and
prevention and knowledge regarding them is also enhanced with the help of the above analysis.
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CONCLUSION
From the above project report it has been concluded that financial management is a
technique which is mainly focused with enhancement in performance and situation of business.
There are various types of approaches, techniques and factors that contribute in effective
decision making. These are analysis of actual position of business, brain storming, cost or benefit
analysis, risk etc. Apart from this, various techniques of management accounting are used for the
purpose of maximising value of shareholders and controlling the costs. These are marginal
analysis and capital budgeting. Business entities are required to make sure that shareholder
management and the way in which conflicting objectives of different groups of shareholders. It is
also vital for businesses to pay attention towards fraud detection and prevention along with
ethical decision making.
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REFERENCES
Books and Journals:
Al Breiki, M. and Nobanee, H., 2019. The role of financial management in promoting
sustainable business practices and development. Available at SSRN 3472404.
Apte, P. G. and Kapshe, S., 2020. International Financial Management|. McGraw-Hill
Education.
Chandra, P., 2020. Fundamentals of Financial Management|. McGraw-Hill Education.
Madura, J., 2020. International financial management. Cengage Learning.
Mitchell, G. E. and Calabrese, T. D., 2019. Proverbs of nonprofit financial management. The
American Review of Public Administration. 49(6). pp.649-661.
Shapiro, A. C. and Hanouna, P., 2019. Multinational financial management. John Wiley & Sons.
Yuniningsih, Y., Pertiwi, T. and Purwanto, E., 2019. Fundamental factor of financial
management in determining company values. Management Science Letters. 9(2).
pp.205-216.
Zada, M., Yukun, C. and Zada, S., 2019. Effect of financial management practices on the
development of small-to-medium size forest enterprises: insight from
Pakistan. GeoJournal. pp.1-16.
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