lOMoARcPSD|6536636
CPA Australia - SMA - M2
Summary
Strategic Management Accounting (Macquarie
University)
, lOMoARcPSD|6536636
MODULE 2 Information for decision-making
Preview Introduction
Hislop: data is raw from observation. Information is
arranged data + some intellectual. Knowledge is from
application of data or information + more intellectual +
linked with existing beliefs.
AICPA and CIMA produced the Global Management
Accounting Principles based on premise that
management accounting is heart of quality
decisionmaking, because it brings to the fore the most
relevant information and analysis to generate and
preserve value.
There are four Global Management Accounting
Principles: 1. Communication provides insight that is
influential.
2. Information is relevant.
3. Impact on value is analysed. 4. Stewardship builds
trust (AICPA and CIMA 2014,
p. 3).
The management accountant needs carefully use tools to
provide information that best meets the needs of the
stakeholder. This involves:
1. Judgment4time and resources that are available in
terms of the scope and depth of the analysis and
know the limitations.
1
, lOMoARcPSD|6536636
2. Analysis and interpretation4decide what tools to
apply depend on the circumstances and know
limitations
3. Flexibility and a focus on risk4be flexible when
search information, especially externally sourced
information; where uncertain, make sure users know
the risk of relying on data that cannot be verified.
Part A: Types of information needed for stakeholder
decision-making
The information needs of stakeholders
The first step is to determine who the stakeholders are
and what information they need.
Identifying users with different information needs
External or internal stakeholders
External stakeholders
Table 2.1: External stakeholders and their
information needs
Stakeholder Key information requirements or
needs
Community Employment levels and expected
duration;
Economics of the (local) economy;
Environmental protection
2
, lOMoARcPSD|6536636
Creditors, Creditworthiness
financiers,
Credit approval and limits
and advances
of funds Important conditions for loan agreements
(e.g. covenants)
Customers Fair trading standards of compliance
Guarantees, warranties
After-sales service arrangements
including spare parts availability
Government Tax
Financial reporting and industry-specific
legislation compliance
Investors ROI
Income stream (dividends, interest
payment, etc.)
Suppliers Long-term supply arrangements
(vendors) of
Conditions for receipt of payment
products and
supporting Standards of quality
services
Trade unions Future employment prospects
Working conditions
Worker income protection
3
CPA Australia - SMA - M2
Summary
Strategic Management Accounting (Macquarie
University)
, lOMoARcPSD|6536636
MODULE 2 Information for decision-making
Preview Introduction
Hislop: data is raw from observation. Information is
arranged data + some intellectual. Knowledge is from
application of data or information + more intellectual +
linked with existing beliefs.
AICPA and CIMA produced the Global Management
Accounting Principles based on premise that
management accounting is heart of quality
decisionmaking, because it brings to the fore the most
relevant information and analysis to generate and
preserve value.
There are four Global Management Accounting
Principles: 1. Communication provides insight that is
influential.
2. Information is relevant.
3. Impact on value is analysed. 4. Stewardship builds
trust (AICPA and CIMA 2014,
p. 3).
The management accountant needs carefully use tools to
provide information that best meets the needs of the
stakeholder. This involves:
1. Judgment4time and resources that are available in
terms of the scope and depth of the analysis and
know the limitations.
1
, lOMoARcPSD|6536636
2. Analysis and interpretation4decide what tools to
apply depend on the circumstances and know
limitations
3. Flexibility and a focus on risk4be flexible when
search information, especially externally sourced
information; where uncertain, make sure users know
the risk of relying on data that cannot be verified.
Part A: Types of information needed for stakeholder
decision-making
The information needs of stakeholders
The first step is to determine who the stakeholders are
and what information they need.
Identifying users with different information needs
External or internal stakeholders
External stakeholders
Table 2.1: External stakeholders and their
information needs
Stakeholder Key information requirements or
needs
Community Employment levels and expected
duration;
Economics of the (local) economy;
Environmental protection
2
, lOMoARcPSD|6536636
Creditors, Creditworthiness
financiers,
Credit approval and limits
and advances
of funds Important conditions for loan agreements
(e.g. covenants)
Customers Fair trading standards of compliance
Guarantees, warranties
After-sales service arrangements
including spare parts availability
Government Tax
Financial reporting and industry-specific
legislation compliance
Investors ROI
Income stream (dividends, interest
payment, etc.)
Suppliers Long-term supply arrangements
(vendors) of
Conditions for receipt of payment
products and
supporting Standards of quality
services
Trade unions Future employment prospects
Working conditions
Worker income protection
3
