lecture 1 full

WELCOME TO ACCG301ACCG301:OrganisationalPlanningandControlUnit Convenor & LecturerAleksandra Pop-VasilevaDepartment of Accounting and Corporate GovernanceTelephone: 9850 4854, E4A 330Teaching AssistantKim LuTelephone: 9850 4821Unit email: [email protected]:InformationforCreatingandManagingValueByKimLangfieldSmith,HelenThorne,RonaldW.Hilton7th Edition2015,McGrawHillAdditionalreadingmaterial:UploadedoniLearnUnit Web, Lectures and Assessments iLearn: https://ilearn.mq.edu.au Unit email: [email protected] Information: Unit Guide and Assessment Guide Lectures/Tutorials/iLectures Lecture topics & schedule Tutorial assignments Student consultationAssessmentsAssessment Item Weighting TypeTutorial assignments15% IndividualResearch Report 20% GroupClass Tests 15% IndividualFinal Examination50% IndividualTOTAL 100%ACCG301: Organisational Planning and ControlLECTURE 1Management Accounting: an overviewChapter 1 (Langfield-smith et al., 2015)Chapter 1 (Garrison et al., 2012)Aleksandra Pop-VasilevaDepartment of Accounting and Corporate [email protected]. Explain the way in which cost accounting supports management accountingand financial accounting2. Explain differences between management accounting and accounting 3. Explain planning and control and management accountants role in implementing in these two management elements4. Describe the set of business functions in the value chain 5. Explain the theories applied in management accounting systems design 6. Describe some important considerations in the design of management accounting systems 7. Apply professional ethics to management accountants decisions.After this lecture you should be able to:Australian organisations in the 21st century Increasing global competition Corporatisation and privatisation of public sector bodies competing with private sector Rise of e-commerce, rapid technology changes, strategic alliances, business networks, global labour mobility Rise of the service-based economy Increasing customer demands Climate change issuesManagement accountants work for public companies, private businesses and government agencies. They may also be called cost accountants, managerial accountants, industrial accountants, private accountants or corporate accountants, but all perform similar functions within a company. Indeed, preparing data for use within a company is one of the features that distinguishes a management accountant's job from other types of accounting jobs, such as public accounting.Instead, you'll be recording and crunching numbers for internal review to help companies budget and perform better. In conjunction with other managers in the company, you may help the company choose and manage its investments. Management accountants are risk managers, budgeters, planners, strategists and decision makers. They do the work that helps the company's owner, manager or board of directors make decisions. analyze these basic data and make forecasts, budgets, performance measurements and plans, then present them to senior management to assist in its operational decision making.Read more: http://www.investopedia.com/articles/professionals/041713/what-management-accountants-do.asp#ixzz3gWaEvL6uManagement Accountant Job DescriptionTopics covered in ACCG30110 OFFICEIFACULTYIDEPARTMENTWeek Starting Topic1 J uly 27 Management Accounting: an overview2 August 3 Strategy and Strategic Management3 August 10Managing Cost and Quality4 August 17 Capacity Management (including Theory of Constraints)5 August 24 Managing Suppliers and Customers(including time management)6 August 31 Managing Inventory7 September 7 Financial Performance Reports and Transfer PricingBREAK8 September 28 Financial Performance Measurement Systems9 October 5 The Balanced Scorecard (BSC) and Benchmarking10 October 12 Motivating Employees and Compensation11 October 19 Sustainability and Management Accounting12 October 26 Capital Budgeting Decisions13 November 2 Review and Final Examination PreparationWhat 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 value The Institute of Management Accountants has defined management accounting as:A value-adding continuous improvement process of planning, designing, measuring and operating both nonfinancial information systems and financial information systemsthat guides management action, motivates behavior, and supports and creates the cultural values necessary to achieve an organizations strategic, tactical and operating objectives.https://www.youtube.com/watch?v=ZkzPxyOdV4Mhttp://www.youtube.com/watch?v=o_ShGlIvy7Uhttp://www.youtube.com/watch?v=PHpIqxUVChYWhat is Management Accounting? The definitions identifies: Both financial and nonfinancial information The information supports planning (strategic) and control (performance evaluation) functions Management accounting information is pervasive and purposeful It is intended to meet specific decision-making needs at all levels in the organisationExamples of management accounting information include: The reported expense of an operating department, such as the assembly department of an automobile plantor an electronics company The costs of producing a product The cost of delivering a service The cost of performing an activity or business process such ascreating a customer invoice The costs of serving a customerWhat is Management Accounting?DECISIONDECISIONDECISIONDECISIONDECISIONWhat is Management Accounting? Management accounting also produces measures of performance of decentralized operating units, such as: Business units Departments Divisions These measures help managers assess the performance of the companys decentralized units Effective management accounting systems can create considerable value to todays organisations by providing timely and accurate information about the activities required for their successDifferencesComparing Management and Financial AccountingHow Management Accounting Affect Strategic Decisions?InputsProcessesOutputsUsersBusiness EventsCollectingMeasuringAnalysing ReportingManagingProduct CostsCustomer CostsBudgetsPerformance ReportsSpecial ReportsDeveloping strategyBuilding resources and capabilitiesImplementing strategyManagement Accounting and Strategy 1. Developing Strategy Management accountants contribute to an organisationsformulation of strategy (vision, mission, long-term strategy, objectives)2. Implementing Strategy Planning and managing the implementation of strategy Performance management and control (comparison of budget targets and results)Management Accounting and Strategy Corporate strategy Choices about the types of businesses to operate in, which businesses to acquireand divest and how best to structure and finance the organisation In publicly listed companies, the choice of corporate strategy is influenced by theexpectations of major shareholders and securities market Business (or competitive) strategy The way a business competes within its chosen market Distinct business strategies for each business unit(cont.)Management Accounting and Strategy Competitive advantage Advantage(s) that a business may have over another that are difficult to imitate, achieved through:Cost leadership Economies of production, superior process technologies, tight cost controlProduct differentiation Superior quality, customer service, delivery performance, product featuresPlanning and ControlManagement Decision Management Accounting SystemPlanningControlPerformanceEvaluationBudgetsAccountingSystemPerformanceReportsFeedbackPlanning and ControlWhat is planning?SettinggoalsPredictingresultsDecidinghowtoattaingoalsPlanning and ControlWhat is control?ComparingandtakingcorrectiveactionsDecidingonperformanceevaluationandfeedbackAssociationbetweenStrategy,PlanningandControlChanging Business Environment: Management Accounting ResponseTime periodSophistication of Management Accounting with changing organisational contextMost of the product-costing and cost accounting procedureswere developedChanges to costing methodsfor internal/external reportingEffort to improve the managerial usefulness of cost systemsEfforts to develop a new management accounting systems, ABC, BSC..1900Management Accounting Systems Design: Contingency and Institutional Theories Contingency theory The design of a management accounting system is influenced by specific aspects of the organisational context External environment, technology, organisational structure, size, national and organisational culture, and strategy Institutional theory The design is influenced by institutional forces, which explain similarities The need to achieve legitimacy within and beyond their organisation The tendency for firms to imitate good practice of other firmsOrganisational Context OrganisationManagementAccountingSystemsManagement Accounting Systems Design: important considerations Cost/Benefit AnalysisThere are costs and benefits of generating and providing management accounting information Costs include Salary of accounting personnel Purchasing and operating computers Gathering, storing and processing data Managers time to read, understand and use the information Benefits include Improved management decisions More effective planning Improved operational efficiency at lower cost Better control Improved customer and shareholder valueValue Chain AnalysisManagement accounting helps managers to administer each of these business functionsResearchandDevelopmentProduct, ServiceProcessDesignProduction MarketingDistributionCustomerServiceManagement AccountingManagement Accountants and Professional Ethics In Australia, management accountants may join CPA Australia Institute of Chartered Accountants in Australia Institute of Public Accountants (formerly NIA) Chartered Institute of Management Accountants (CIMA) Code of Ethics for Professional Accountants Fundamental principles of ethics Integrity Objectivity & Professional behaviour Competence and Due care ConfidentialityDO YOUR HOMEWORK!!!Homework questions can be found in the Unit Assessment file on iLearnFamiliarise yourselves with the following companies https://youtu.be/cBwoREP08wM?list=PLHtmnSh--OZzIPtMKU-JpDbVwPCQCxhbjAleksandra Pop-VasilevaDepartment of Accounting and Corporate GovernanceLocation: E4A 330Phone Ext. #[email protected] Lecture: StrategyThank you!