Considers the responsibility of managers for the financial resources under their control and introduces control and management techniques.
Introduction
• The nature of accounting
• Financial versus management accounting
• Basic accounting practices
- Simple book keeping
- Double entry
• Profit versus cash
- Accruals and prepayments
Sources of Funds
• The nature and status of organisations
• Sources of funds
• The importance of control over cash flow
Financial Reporting to external stakeholders
• The balance sheet
- Content and format
• The profit and loss account
- Content and format
• Their interrelationship
• Key elements of balance sheet and profit and loss account
• A cash flow statement
• The board report
• Ethical issues
Assessment of Financial Performance
• Ratio analysis
- Investor ratios
- Management ratios
• Horizontal and vertical techniques
Management Control: Theories and Models
• Theories and models
- First steps, Arnold et al
- A cybernetic approach
- The human factor
- Informal control systems, culture, etc.
Strategic Control Issues
• The special needs of top management
• An example, the balanced scorecard
• Strategic partnerships, accounting and reporting requirements
The Nature of Costs
• Fixed and variable costs
• Direct and indirect costs
• Cost-volume-profit analysis, the concept of break even
Calculation and Use of Full Cost Techniques
• Absorption costing
- Allocation and apportionment
- Recovery of overheads
- Strengths and weaknesses
• Activity Based Costing (ABC)
Accounting in Support of Decision Making
• Marginal costing
• Make or buy-in decisions
• Discontinue activities
Budgeting
• Budgets
- Cash or accruals?
- Budget setting and revision
- Reporting
- Variance analysis
• Standard costing techniques
Capital Investment
• The importance of capital investment appraisal
• Simple cost/benefit analysis
• Discounted cash flow (DCF)
• Internal Rate of Return (IRR)
• Accounting Rate of Return (ARR)