Contribution Of Advanced Management Accounting (Essay Sample)
“Leaders of business, public service and third sector organisations are increasingly recognising that in discharging their varied duties they must address the significant risks of global environmental change, including the economic and social risks that can flow from it. They are also recognising the interaction of a broader range of risks and opportunities arising from, and impacting upon, ecological, social and economic sustainability as among the most urgent and complex challenges facing their organisations and society more broadly” (Hopwood, et al., 2010).
As leaders of organisations are becoming more aware of a diverse range of sustainability-related challenges, their organisations and advisors are working on developing a range of accounting and accountability practices which will help in identifying and managing sustainability –related risks and opportunities.
Critically evaluate the contribution of management accounting and the management accountant to accounting for sustainable development. Your critique should be supported by literature and practical issues.
Choice any retail company or a Strategic Business Unit of a retail company and design, develop and outline a Balanced Scorecard (BSC) for the company or the Business Unit incorporating environmental measures. Where feasible your BSC should have specific measures / targets.
Contribution of the assignment to the to overall module mark 50%. Approximate mark split indicated.
All sources and references should be shown.
This is an academic assignment. In terms of format, your work should be well structured, clearly presented and adequately referenced, making use of suitable headings and sub-headings within the text. It is recommended that you also use page numbers and a table of contents page. A comprehensive bibliography is expected. You may also make use of appendices where appropriate.source..
Advanced Management Accounting
Advanced Management Accounting
Many business organizations have management accounting that is majorly used in assessing the financial performance of these organizations. Management accounting offers an elaborate platform upon which business organizations develop their sustainability practices. It is important to note that management accounting is a continuous process that may be accrued out quarterly, half yearly or yearly depending on the laid down management policies and procedures of respective organizations (Fullerton, Kennedy & Widener, 2014). The immense contribution of management accounting in facilitating and influencing decision making in many business organizations cannot be underscored. For instance, a business organization can only venture into a new business or decide to expand its activities after an evaluation of its financial position, indicating that the business organization is experiencing a good flow of profits (Williams, 2014). This essay critically evaluates the contribution of management accounting and the management accountant to accounting for sustainable development in business organizations. More so, this discussion will further give an analysis of the Balanced Scorecard for a hypothetical Advanced Technologies Company in incorporating environmental issues in their daily running of the business.
The Contribution of Management Accounting for Sustainable Development
Management accounting encompasses the making of decisions in any organization. Having a sound management accounting department is crucial in making an organization successful. Management accounting is used in gathering and using both financial and nonfinancial information and statistics of an organization, which guides the management in making wise short-term and long-term decisions. Management accounting, therefore, is important to a business organization in the following ways.
The setting of prices. Both marketing and production managers greatly add to price setting of goods and services. The objective of marketing supervisors is to meet consumer demands amid present and future circumstances (Figge & Hahn, 2013). Production managers, on the other hand, supervise material and work expenses to keep these costs within profitable measures. The significance of management accounting is accomplished by providing these key players with internal reports that guide the choices of both the marketing and production divisions in a business organization. These reports can reflect timeframes outside the standard prerequisites of the accounting report and the income statements. According to Williams (2014), detailed data about future demands and anticipated material costs make management accounting reports profitable guidelines for managers in decision-making. The anticipated cost of fuel, for instance, is a key component of the distribution of costs, while fuel costs are continually evolving. Management accounting reports can be customized to give the most current fuel prices without changing the genuine costs that appear on the income statement (Fullerton et al., 2014). The responsive idea of management accounting enables a business to remain competitive in the market. Fixed costs and indirect costs should be tailored towards integrating all branches of an organization. Management accounting uses the budget to achieve this goal of price setting.
Management accounting is responsible for facilitating an effective budget for business organizations. The budget affects the significance of management accounting. The need to create a budget must incorporate flexibility and the coordinated effort of different department heads to express their individual needs and objectives...
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