Tài chính kế toán - Chapter 1: Management accounting: information for creating value and managing resources

Chapter 1Management accounting: information for creating value and managing resources 1-1Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-SmithOutlineAustralian organisations in the 21st centuryWhat is management accounting?Management accounting and financial accounting informationManagement accountants within organisationsManagement accounting processes and techniquesPlanning and controlImportant considerations in the design of management accounting systemsManagement accounting and the changing business environment1-2Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-SmithAustralian organisations in the 21st centuryIncreasing global competition in the 1990sReduction or elimination of input tariffs, quotas and bountiesDeregulation of telecommunications industryCorporatisation and privatisation of public sector bodies competing with private sectorChanges in the regulation of labour markets1-3Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-Smith(Cont.)Australian organisations in the 21st century (cont.)Shift from primary production to exporter of resources, to manufacturer, to resurgence of mineral resourcesAustralia is primarily a service-based economyRapid and unpredictable changeIncreasing customer demandsRise of the Internet and e-commerceClimate changeNew organisational structures, strategies and management philosophies1-4Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-SmithWhat is management accounting? the processes and techniques that focus on the effective and efficient use of organisational resources to support managers in their tasks of enhancing both customer value and shareholder value1-5Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-Smith(cont.)What is management accounting? (cont.)Customer valueThe value that a customer places on particular features of a product or serviceShareholder valueThe value that shareholders or owners place on a businessResourcesFinancial and non-financial, including information, work processes, employees, committed customers and suppliersDetermine the capabilities and competencies of the organisation1-6Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-SmithManagement accounting systemsSystems that produce the information required by managers to create value and manage resourcesInclude estimates of the costs of producing goods and services, information for planning and controlling operations and information for measuring performanceAd-hoc information to satisfy managers’ short term and long term decision-making needs1-7Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-SmithManagement accounting informationFocus is on the needs of managers within the organisationFlexibility in the nature of information suppliedInfluencesManagers’ information needs, nature of the resources they manageProduction and service technologies, organisational structure, organisational size, the external environment, level of sophistication of computer systemsUsed by senior managers through to operational managers1-8Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-SmithManagement accounting and financial accounting informationFinancial accountingThe practice of preparing and reporting accounting information for parties outside the organisationCosting systems are common to both financial and management accountingA system that estimates the cost of goods and services as well as the cost of organisational units, such as departments1-9Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-Smith1-10Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-SmithManagement accountants within organisationsMost large organisations have a ‘finance function’ at the corporate levelSenior accountantsFinancial controller, chief accountant, finance manager, general manager (GM) of accounting, group accountantAccounting staff may be found in each operating divisionManagement accounting activities increasingly involve managers from other functional areas of the business1-11Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-SmithManagement accounting processes and techniquesSupport the organisation’s formulation and implementation of strategyContribute to improving the organisation’s competitive advantage in terms of quality, delivery, time, flexibility, innovation and cost, through modern process improvement and cost management techniques1-12Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-Smith(cont.)Management accounting processes and techniques (cont.)Provide information to help manage resources, through systems of planning and control Provide estimates of the costs of an organisation’s outputs, to support the strategic and operational decision needs of managers1-13Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-SmithManagement accounting and strategyManagement accounting can support the organisation's formulation and implementation of strategyVisionThe desired future state or aspiration of an organisationUsed by senior managers to focus the attention and energies of staffMission statementDefines the purpose and boundaries of the organisation1-14Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-Smith(cont.)Management accounting and strategy (cont.)ObjectivesSpecific statement of what the organisation aims to achieveOften quantifiedRelates to a specific period of timeStrategiesThe direction that the organisation intends to take over the long term to meet its mission and achieve its objectivesFocus on ways to manage the organisation's resources to create value for customers and shareholders1-15Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-Smith(cont.)Management accounting and strategy (cont.)Major decisions in formulating strategiesIn what business will we operate?How should we compete in that business?What systems and structures should we have in place to support our strategies?Corporate strategy Making choices about the types of businesses to operate in, which businesses to acquire and divest, and how best to structure and finance the organisationIn publicly listed companies, the choice of corporate strategy is influenced by the expectations of major shareholders and securities market1-16Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-Smith(cont.)Management accounting and strategy (cont.)Business (or competitive) strategyThe way a business competes within its chosen marketDistinct business strategies for each business unitStrategy implementationPutting plans into place to implement and support a chosen business strategyNew structures, new systems, new production processes, new marketing approaches, new HRM policies1-17Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-Smith(cont.)Management accounting and strategy (cont.)Competitive advantageAdvantages that a business may have over another that are difficult to imitate, achieved through ...Cost leadershipEconomies of production, superior process technologies, tight cost controlProduct differentiationSuperior quality, customer service, delivery performance, product features1-18Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-Smith(cont.)Management accounting and strategy (cont.)Strategic planningLong-term planning, usually undertaken by senior managers with a three- to five-year timeframeInvolves corporate strategy decisionsDraws on management accounting informationImplementing strategiesManagers at all levels share the responsibility for implementationLong-term plans linked to budgeting systemsPerformance measurement systems compare actual outcomes to targets1-19Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-SmithPlanningA broad concept that is concerned with formulating the direction for future operationsAllows an organisation to consider and specify all resources needed in the futureOccurs at all levels of the organisationA budget is an example of a short-term plan that summarises the consequences of an organisation’s operating activities for a specified time period1-20Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-SmithControllingInvolves putting mechanisms in place to ensure that operations proceed according to plan and that objectives are achievedManagement accounting information provides information for control by comparing actual performance with plans, targets or budgetsControl systems are the systems and procedures that provide regular information to assist in control1-21Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-Smith1-22Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-SmithCosting goods and servicesEstimates of the cost of producing goods and services are needed to support a range of operational and strategic decisionsRoutine costing systems form part of the financial accounting system, so product costs are prepared to meet external reporting purposesProduct costs are sometimes produced outside of the financial accounting system, to better meet managers’ decision-making needs These costs may not comply with GAAP or accounting standards1-23Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-SmithSome important considerations in the design of management accounting systemsBehavioural issuesInformation may impact on individual behaviour, so management accounting systems may have expected and unexpected outcomesA key purpose of management accounting systems is to motivate managers and employees to direct their efforts towards achieving the organisation’s goalsBudgeting systems, performance measurement and reward systems may be used as motivational tools1-24Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-Smith(cont.)Some important considerations in the design of management accounting systems (cont.)There are costs and benefits of generating and providing management accounting informationCosts Salary of accounting personnel Purchasing and operating computersGathering, storing and processing data, Managers’ time to read, understand and use the information1-25Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-Smith(cont.)Some important considerations in the design of management accounting systems (cont.)Benefits Improved decisionsMore effective planningGreater operational efficiency at lower costsBetter controlImproved customer and shareholder value1-26Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-SmithManagement accounting design: contingency and institutional theoriesContingency theory – design is influenced by the organisational contextExternal environment, technology, organisational structure and size, national and organisational culture, and strategyThese factors cause systems to be different Institutional theory – design is influenced by institutional forces, which explain similaritiesThe need to achieve legitimacy within and beyond their organisationThe tendency for firms to imitate ‘good practice’ of other firms1-27Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-SmithManagement accounting responses to the changing business environmentBy the 1990s, many organisations realised that they needed to improve their product and service quality, delivery responsiveness and cost performance in order to improve market share and profitsAdoption of new management structures, systems and practices, including new management accounting techniques and systems1-28Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-Smith(cont.)Management accounting responses to the changing business environment (cont.)Conventional management accounting systemsIncludes budgeting, costing systems and financial performance measurement systemsIn wide use for many decades and still used in many organisationsContemporary management accounting systemsIncludes activity-based costing, performance measurement systems (such as balanced scorecards), cost management systems (such as business process re-engineering), new approaches to customer profitability analysis and supplier cost analysis1-29Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-Smith(cont.)Management accounting responses to the changing business environment (cont.)Contemporary management accounting techniques have developed to support the adoption of new structures, systems and practicesSome organisations continue to use conventional management accounting systems, while others are in the midst of implementing contemporary systems 1-30Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-SmithCopyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-Smith1-31Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-Smith1-32SummaryManagement accounting supports managers in enhancing customer value and shareholder valueSystems to support formulation and implementation of strategyProcess improvements and cost management techniquesInformation for planning and controlProduct costs for strategic and operational decisionsContemporary management accounting techniques have developed to support new organisational structures, systems and practices, which are a response to a rapidly changing business environment1-33Copyright  2009 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Management Accounting 5e by Langfield-SmithPrepared by Kim Langfield-Smith