Tài chính kế toán - Chapter 8: Performance reports

Chapter 8Performance reports1Copyright  2003 McGraw-Hill Australia Pty LtdPPTs t/a Budgeting, second edition, by Banks & GilibertiSlides prepared by Mya AronfeldPerformance reportsResponsibility accounting: A management accounting system that encourages individuals to work together towards the achievement of organisational goals.Performance reports: A yardstick which compares actual results with the budget.2Copyright  2003 McGraw-Hill Australia Pty LtdPPTs t/a Budgeting, second edition, by Banks & GilibertiSlides prepared by Mya AronfeldResponsibility accountingWhere each division, branch or other sub-unit is known as a responsibility centre, the manager of which is accountable for the performance of the sub-unit.Responsibility centers:Cost centreRevenue centreProfit centreInvestment centre3Copyright  2003 McGraw-Hill Australia Pty LtdPPTs t/a Budgeting, second edition, by Banks & GilibertiSlides prepared by Mya AronfeldPerformance reports show any variance that may arise when actual figures are compared with budget figures.Favourable variance (F) means that actual income is >budgeted income or actual cost is budgeted cost.4Copyright  2003 McGraw-Hill Australia Pty LtdPPTs t/a Budgeting, second edition, by Banks & GilibertiSlides prepared by Mya AronfeldSignificant variances (exceed an acceptable limit) are investigated by the manager of the organisational sub-unit.What is considered significant varies from business to business.Reasons for variances are numerous but fall into two main groups: 1. are a result of external factors that management have no control over, and2. are a result of internal factors that management maybe able to change. 5Copyright  2003 McGraw-Hill Australia Pty LtdPPTs t/a Budgeting, second edition, by Banks & GilibertiSlides prepared by Mya AronfeldObjective of responsibility accountingManagement by exception means that an appropriate person is notified when there is a significant deviation from plan.Performance reports highlight the areas that need attention.Major objective is to ensure that the set targets are achieved at all costs, not trying to find who is to blame.6Copyright  2003 McGraw-Hill Australia Pty LtdPPTs t/a Budgeting, second edition, by Banks & GilibertiSlides prepared by Mya Aronfeld