Management Accounting

Aim
The Chartered Secretary practices within the setting of both strategic (boardroom) and operations management. A command of the concepts and practices of management accounting is crucial to fulfilling these responsibilities.

The aim of the module is to develop the knowledge and skills necessary for the Chartered Secretary to employ the principles and practices of management accounting in strategic and operational activities

Learning Outcomes
At the conclusion of this module, the candidate will be able to:

• Understand the language, concepts and applications of management accounting.
• Undertake the preparation and presentation of management accounting information for corporate decision-making purposes.
• Interpret management accounting information for strategic and operational purposes.
• Handle budget planning and management responsibilities
• Undertake the management accounting role for employers and clients.

Learning Content

The Purposes of Management Accounting

Information for management planning, decision-making, control, and appraisal. The nature of costs, cost concepts, cost units and cost centres.

The Context of Management Accounting

Manufacturing: traditional and modern; extractive industries; service industries; just in time (JIT) production and purchasing; multinationals. Corporation tax; sales/value added taxes.

Types of Planning, Controls and Decision

The decision making process. Planning, decision making, the control/appraisal cycle: information requirements. Feedback.

The Nature of Costs

Decision, planning and control horizons. Impact on cost definitions. Cost behaviour; cost classification; relevant costs; learning curve; specific costs; opportunity costs.

Planning, Decision Making, Control and Appraisal

Short term: the contribution concept; break-even analysis; cost volume profit (CVP)
analysis; sensitivity analysis; limiting factors; differential costing; use of standard costs
for short-term planning and decision-making.

Medium term: semi-variable costs; marginal costing; impact of absorption costing on
decision making and behaviour; activity-based costing (ABC). Budgeting: fixed; flexible;
rolling; activity-based (ABB); budgetary control; variance analysis; behavioural aspects.
Cash budgets. Standard costing: variance analysis (price and efficiency variances);
reasons; calculation; investigation; interpretation; behavioural aspects; limitations. Cost ratios and labour efficiency. Non-financial service indicators. Quality measures.
Customer profitability analysis.

Longer term: lifecycle costing; cost reduction and value analysis; target costing; investment appraisal – payback, accounting rate of return, discounted cash flow (net present value); transfer pricing; inter-firm, inter-divisional, inter-departmental comparisons; financial ratios; balanced scorecard.