Cpa Australia strategic management accounting index A+ latest updated

cpa australia strategic management accounting index Module 1: Introduction to stratgic management accounting Key word Module Page Content Analyst, business adviser, partner 1 39 - The move to providing strategic support is combined with the traditional cost management services that management accountants have always provided; - Risk management and mitigation is another important part of enhancing overall performance; - Design and management of information systems and development of effective reporting methods are often incorporated into the management accounting role (showing others how to access information themselves rather than being an information gatekeeper) Basel 1 48-49 - The Basel Accords aim to create a robust and stable international banking system to minimise banking problems and to avoid an international collapse of the financial system — which nearly occurred during the GFC; - A key aim of the revised version of Basel III (Basel Committee on Banking Supervision 2011) is to enable the banking sector to absorb shocks; - The most likely impact of Basel III on business will be a reduction in credit availability, especially for higher-risk activities, such as trade credit financing; - there will be a dampening effect, where excessive credit growth is tempered, and borrowing costs are slightly higher. Boston Coulting Group ("PCG") 1 75 1. Stars—products that are sold into high-growth markets and hold a high market share. Although these products generate large cash inflows, due to the pace of growth in the market, the organisation needs to continue to invest heavily in the product to maintain its position. 2. Cash cows—as stars enter the maturity phase of their product life cycle, the need for finance slows and they become cash cows, generating large cash inflows. Cash cows are products that hold a high market share in a low-growth market. Due to the low market growth, the organisation does not need to continue investing in the product, and the cash flows it produces support the development of other products. 3. Question marks—products that hold a low market share in a high-growth market. Due to the low market share, the organisation may need to continue a high level of investment in the product to maintain or increase its market share and cash inflows. The organisation needs to decide whether ‘question mark’ products are worth continuing (in the hope that they will make the transition to stars) or should be withdrawn from the market. 4. Dogs—products that hold a low market share in a low-growth market, producing low cash inflows. The organisation should probably eliminate these products from its portfolio, as dogs are unlikely to generate enough cash to support investment in other products. Cause of change in biz environment 1 46 Challenges of MA 1 43-45 - Technology + keeping information secure and maintaining customer privacy + data verification - Managing resource: + Mastering areas such as cash flow management and SCM ("supply chain management" is essential + areas of recognising, developing and managing intangible assets, including knowledge, customer and employee loyalty, brand management - Innovation + an outcome—that is, a new product or service—and a process—a combination of decisions, structures, resources and skills + incremental innovation or radical changes + Successful innovation requires a clear understanding of customers. Corporate social responsibility - a stakeholder focus 1 59 Management accountants will be involved in preparing various types of reporting: - Environmental reporting — involves capturing and preparing information to inform stakeholders about an organisation’s impact on the environment; - Social reporting - is the process of acknowledging an organisation’s social impact, and incorporates both the positive and negative aspects of its performance; - Sustainability reporting—combines environmental and social information with economic performance Customer value 1 27 - The primary task for an organisation is to create an output that has customer value; - produce this output at a cost that is lower than the price the customer is willing to pay. Economic turmoil 1 47 - changes or problems in one part of the world quickly spread across the globe; - It appears that many underlying issues have been deferred but not resolved. Environmental management accounting 1 59-60 - Environmental management accounting’ (EMA) is a term used to describe this approach —it involves the development of environmental management accounting systems (EMASs) to capture, report and help improve performance in these areas. - Standard accounting information systems (AISs) typically capture financial transactions. EMASs do more much more than this by also recording the physical flows of resources, including volumes and weights of inputs, outputs, waste, recycling and emissions. Ethics 1 60-61 - Members are expected to comply with the Code of Ethics for Professional Accountants, published by the Accounting Professional and Ethical Standards Board (APESB), which has an overarching requirement to act in the public interest. - The fundamental principles that a member is required to abide by are integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. - An organisational structure includes all the people, tasks and responsibilities given to different areas and the authority delegated to different positions within an organisation; - Each of these functions is a centre of responsibility for individual managers, who may be held accountable for performance in their specific area; - Organisations that are structured in a functional way usually create accounting systems that match this. This type of accounting system is called a responsibility accounting system (RAS). The RAS collects revenues and costs and also measures the performance of these responsibility centres. External analysis 1 76 - Traditional management accounting is focused on providing internal information to support strategic analysis as well as day-to-day operational activities. In contrast, strategic management accounting has a strongly external focus that identifies and captures information from outside the organisation; - The aim of industry analysis is to understand how competitive forces create the profitability (prices, costs, investments) of the industry. An understanding of competitive forces can help to identify new strategies that shift competitive forces and create a higher return on investment; - necessary to look at the industry’s suppliers, buyers, competitors, barriers to entry and so on; - Strategic analysis should not be overly concerned with temporary fluctuations in prices or demand, but should focus on the industry’s business cycle. Five forces 1 77 - New entrants - Alternative or substitute products - Customers - Suppliers - Existing competitors Flatter hierachies 1 62 - A key influence on this change has been an attempt to eliminate costs by reducing the number of middle managers and replacing them with IT; - Another influence has been the attempt to create organisations that are more flexible as information and decisions move rapidly between the layers of the organisation. Globalisation 1 51-52 - As organisations have been exposed to an increasingly tough business environment, they have struggled to survive or even failed. However, as a result of globalisation, many opportunities; - The consequences of globalisation have forced managers to have a greater understanding of the competitive environment and to achieve higher levels of customer and employee satisfaction have also arisen - Global competition - Physical and capability factors; - Social factors and national cultures; - Legal and political systems. -- For management accountants, as globalisation increases, the ability to obtain relevant information and evaluate decisions across a wider level of issues becomes important. Industry value chains 1 69 - If some value chain roles in an industry are relatively unprofitable, it may be wise for an organisation that operates across the entire industry value chain to outsource or divest itself of less profitable activities; - An organisation must carefully consider the value chains of its suppliers and customers before introducing any performance-improvement initiative targeted at its own value chain; - One other factor important to competitive advantage is the ability of an organisation to develop and display its value-adding capabilities through reputation and branding. Internal analysis 1 71-72 - The purpose of the internal part of a SWOT analysis is to identify the organisation’s strategically relevant strengths and weaknesses; - resource-based theory: each organisation is seen as having a set of distinctive capabilities and reproducible capabilities. Only distinctive capabilities can lead to a