6 TOOLS FOR CREATING AND MANAGING VALUE 99
Activity value analysis 112
ACTIVITY-BASED BUDGETING (ABB) 58
ACTIVITY-BASED COSTING (ABC) (p305) 100
Activity-based management 111
ACTIVITY-BASED MANAGEMENT (ABM) AND CONTINUOUS IMPROVEMENT (p343) 111
ADJUSTING TIME-DRIVEN ACTIVITY-BASED COSTING FOR MORE COMPLEX ACTIVITIES 102
Agency Theory: 84
ANALYSING NEW AND EXISTING INFORMATION SYSTEMS 45
BALANCED SCORECARD (BSC) (p254) 87
BALANCING STAKEHOLDER REQUIREMENTS AND INFORMATION DELIVERY 38
BCG Matrix: 24
Star Products: 24
Cash Cow Products: 24
Question Mark Products: 25
Dog Products: 25
BEHAVIOURAL CONSEQUENCES OF PERFORMANCE MANAGEMENT 96
BENCHMARKING (Levels of analysis for performance improvement) 95
BIG DATA 37
BOTTOM-UP APPROACH (Budgets) 57
Broad Differences between strategic and operational management 15
BUSINESS CASE FOR PROJECTS 65
BUSINESS INTELLIGENCE 37
BUSINESS MODEL CANVAS 86
Business Partner Approach: 16
Business process management (BPM) 112
CASCADING PERFORMANCE MEASURES 90
CAUSES OF CHANGE IN THE BUSINESS ENVIRONMENT (p17) 17
The Global Economy: 17
Economic Turmoil: 17
Structural Change: 17
The Basel 3 Accord: 18
Globalisation: 18
Global Competition: 18
Physical and Capability Factors: 18
Social factors & national cultures: 19
Legal and political systems: 19
Technology 19
Capital Equipment: 19
Information and communication technologies: 19
Cloud Computing: 19
Employee-owned devices and open systems: 19
Sustainability: 19
Corporate Social Responsibility – a stakeholder focus: 20
Environmental Management Accounting (EMA) 20
Ethics: 20
Functional Structure: 20
Flatter Hierarchies (p28): 20
Offshoring & Outsourcing: 20
Virtual Offices and Global Teams: 21
Joint Ventures and Alliances: 21
Management Reporting: 21
CHALLENGES FACING MANAGEMENT ACCOUNTANTS (p15) 17
Technology: 17
Managing Resources: 17
Innovation: 17
CHARACTERISTICS OF INFORMATION 35
CHARACTERISTICS OF PERFORMANCE MEASURES AND TARGETS (p274) 93
Validity (accuracy) 93
Reliability (Consistency) 93
Clarity 93
Timeliness 93
Accessibility 93
Controllability 93
COLLABORATIONS 61
COMPARING MULTIPLE PROJECTS (p182) 71
Contingency theory 85
,Continuous improvement (CI) (p351) 113
CORPORATE SOCIAL RESPONSIBILITY/INTEGRATED REPORTING: (p49) 29
Cost Centres: 47
COST DRIVERS 101
Costs and benefits of information: 31
COSTS AND BENEFITS OF PERFORMANCE MANAGEMENT 94
CRITICAL PATH METHOD—CRASHING PROJECTS (CPM) (p190) 75
Critical success factor approach (CSF) - Approach 1 43
CUSTODIAN OF INFORMATION 41
CUSTOMER PROFITABILITY ANALYSIS (Downstream Activities) 118
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRM) 33
Customer Value: 13
Cybernetic & Feedback controls 85
DATA MINING 37
DATA WAREHOUSING 37
DECISION SUPPORT SYSTEMS (DSS) 33
DEFICIENCIES IN ACCOUNTING-BASED MEASURES (PROJECTS) 70
DESIGNING A STRATEGY MAP FOR PERFORMANCE MANAGEMENT (p260) 89
DESIGNING SMART PERFORMANCE TARGETS (p272) 93
DIFFERING LEVELS OF INFORMATION IN THE ORGANISATION 39
DIMENSIONS OF INFORMATION (p63) 35
EARNED VALUE METHOD (EV Method): TIME VERSUS COST: (p195) 76
EFFECTS AND CHALLENGES OF NEW INFORMATION SYSTEMS AND PLATFORMS (p69) 37
ENTERPRISE RESOURCE PLANNING SYSTEMS (ERP) 33
EQUIVALENT ANNUAL CASH FLOW (EQUIVALENT ANNUAL ANNUITY) (EAC) (EAA): 71
ESTABLISHING THE SYSTEMS INFORMATION NEEDS OF STAKEHOLDERS 42
Lack of information: 42
Inadequate reports or unavailable suitable reports 42
OTHER METHODS OF OBTAINING INFORMATION NEEDS (p89) 44
ETHICALLY INFORMED DECISION-MAKING AND ITS IMPACT ON STAKEHOLDERS FOR PROJECTS 66
ETHICS AND PERFORMANCE MANAGEMENT (p238) 84
External Environment Analysis: 25
External Stakeholders and their information needs: 28
FINANCIAL ANALYSIS—SINGLE PROJECT (p172) 68
FINANCIAL BUDGETS PREPARATION 49
BUDGETED INCOME STATEMENT 49
CASH BUDGET 49
BUDGETED BALANCE SHEET 49
CAPITAL EXPENDITURE BUDGET 49
FINANCIAL PERFORMANCE MANAGEMENT (p223) 83
Financial vs Non-Financial Information: 35
FLEXIBLE BUDGET PREPARATION: 49
FRAMEWORKS FOR PERFORMANCE MANAGEMENT (p252) 86
Functions of an information system: 31
GLOBAL SUPPLIERS (Upstream Activities) 114
GNATT CHARTS: 73
GOVERNANCE, RISK AND PERFORMANCE MANAGEMENT 84
Group versus individual performance (ROLE OF INCENTIVES): 97
HARD AND SOFT FUNCTIONS 103
How management accountants support an organisation (IFAC) 17
Identify and analyse decisions approach - Approach 2 43
Identifying opportunities for achieving a reduction in product costs (5 questions): 106
IDENTIFYING USERS WITH DIFFERENT INFORMATION NEEDS 28
IMPORTANCE OF LINKING INFORMATION TO STRATEGY (p77) 41
IMPORTANCE OF PROBITY IN PROJECTS (Honesty, Integrity) 77
INCREMENTAL BUDGETING 58
Industry value chains: 22
INTEGRATED REPORTING (p232) 84
Internal Environment Analysis: 22
INTERNAL PROJECTS: 60
INTERNAL RATE OF RETURN (IRR) (p178) 70
Internal Stakeholders: 29
INTERNATIONAL PROJECT TEAMS 63
INTERNATIONAL PROJECTS 61
Investment Centres: 47
JOINT VENTURES 61
Kaizen costing (p336) 109
,KNOWLEDGE MANAGEMENT SYSTEMS (KMSs) (Corporate Memory) 33
LEADING AND LAGGING MEASURES OF PERFORMANCE 86
Lean accounting approach: 94
LEGAL IMPLICATIONS OF PRICE SETTING 105
LIFE CYCLE, TARGET AND KAIZEN COSTING (p330) 106
LIMITATIONS OF DIFFERENT KINDS OF INFORMATION 35
LIMITATIONS OF TRADITIONAL CONTROLS 86
MAJOR INFLUENCES ON PRICING DECISIONS (p323) 103
MAKING A PRELIMINARY ASSESSMENT (replacing info systems) 42
MANAGEMENT ACCOUNTING SYSTEMS (MAS): 32
MEASURABILITY AND REPORTING OF PERFORMANCE 83
MEASURING EFFICIENCY, EFFECTIVENESS AND EQUITY (PERFORMANCE MEASURES) 92
MEASURING PERFORMANCE (p199) 77
METHODS OF AGGREGATION AND INTEGRATION OF INFORMATION 34
Types of aggregation 34
MINIMISING INVENTORY LEVELS (Upstream Activities) (p356) 115
MODELS OF PERFORMANCE MANAGEMENT (p249) 86
MONETARY AND NON-MONETARY INCENTIVE SCHEMES (Budgets) 57
MONITORING COSTS (PROJECTS) : 76
MONITORING PROGRESS (PROJECTS) (p194) 76
MULTIPLE ROLES OF PERFORMANCE MANAGEMENT 83
NET PRESENT VALUE (NPV) (p172) 68
NEW INFORMATION SYSTEM FEASIBILITY AND CRITERIA 45
Non- Financial performance Measurement 85
NON-FINANCIAL PERFORMANCE MANAGEMENT 83
OFFSHORING 116
OPERATIONAL AND STRATEGIC PERFORMANCE 86
OPERATIONAL BUDGETS IN MANUFACTURING ORGANISATIONS PREPARATION(p110) 48
STEP 1: SALES BUDGET 48
STEP 2: PRODUCTION BUDGET 48
STEP 3: DIRECT MATERIALS COST BUDGET 48
STEP 4: DIRECT MANUFACTURING LABOUR COSTS BUDGET 48
STEP 5: MANUFACTURING OVERHEAD COSTS BUDGET 48
STEP 6: FINISHED GOODS INVENTORY BUDGET 48
STEP 7: COST OF GOODS SOLD BUDGET 48
STEP 8: PERIOD COSTS BUDGETS 48
OPERATIONAL INFORMATION LEVEL THE ROLE OF MANAGEMENT ACCOUNTANTS IN INFLUENCING STAKEHOLDER DECISION-MAKING (p71): 40
Operational Management: (p7) 15
Organisation value chains: 21
Organisational learning 96
ORGANISATIONAL STRUCTURES FOR PROJECTS 60
Organisational Value Chain: 14
Primary Activities:
Support Activities:
OUTSOURCING 116
Overseer approach: 16
PARTICIPATIVE BUDGETING 57
PAYBACK (Break -Even): (p179) 70
Performance 82
PERFORMANCE AND SUSTAINABILITY 83
Performance improvement 96
Performance management 82
PERFORMANCE MANAGEMENT AND CONTROL—THEIR ROLE IN STRATEGY (P242) 85
PERFORMANCE MANAGEMENT AND ITS LINKS TO STRATEGY 82
PERFORMANCE MANAGEMENT FOR PERFORMANCE IMPROVEMENT 94
Performance Management Systems (PMS) 85
PERFORMANCE MANAGEMENT, POWER AND CULTURE (p278) 94
PERFORMANCE MEASURE DESIGNING (Types of Performance Measures) (p269) 91
Performance measurement 82
PERFORMANCE MEASURES AND PERFORMANCE TARGETS 96
PERFORMANCE—A PROCESS OF VALUE CREATION 83
PERT: PROGRAM EVALUATION AND REVIEW TECHNIQUE (EXAMINABLE) (p186) 74
Step 1: Draw a network diagram
Step 2: Calculate expected time
Step 3: Define the critical path
Step 4: Calculate slack
PEST Analysis: 26
, Regulation: 26
Corporate Social Responsibility: 26
The Business Cycle: 26
Physical Environmental Management Accounting (PEMA) (NOT IN TEXTBOOK) 85
PITFALLS IN EVALUATING MAJOR INFORMATION NEEDS 45
Porter’s Five Forces Model (p39: 25
Force 1: New Entrants: 25
Force 2: Alternative or substitute products 25
Force 3: Customers 25
Force 4: Suppliers: 25
Force 5: Existing competitors: 26
Portfolio Theory and Product Life Cycles (p36): 22
PRICING STRATEGIES 104
Primary vs Secondary Sources of Information: 35
PRODUCT COSTING 100
Product life cycle analysis 22
Introduction Stage: 23
Growth: 23
Maturity 23
Decline: 24
Product life cycle costing 106
PRODUCTION PLANNING AND CONTROL SYSTEMS (p58) 32
Profit Centres: 47
PROFITABILITY INDEX (PI) (p179) 70
PROJECT BUDGETING (p192) 75
PROJECT COMPLETION 79
THE COMPLETION DECISION
CHECKLIST
SPECIFICATION SATISFACTION CONSENSUS
STRATEGIC FIT ASSESSMENT
STAKEHOLDER SATISFACTION ASSESSMENT
FINANCIAL CLOSURE: (p205)
RESOURCE DISPERSION
FINAL REPORT
KNOWLEDGE MANAGEMENT.
PROJECT LEADERSHIP AND THE MANAGEMENT ACCOUNTANT 62
PROJECT MANAGEMENT PROCESS 60
STAGE 1: PROJECT SELECTION (p149) 60
STAGE 2: PROJECT PLANNING 60
STAGE 3: PROJECT IMPLEMENTATION AND CONTROL 60
STAGE 4: PROJECT COMPLETION AND REVIEW 60
PROJECT MANAGER 62
Project Organisations: 60
PROJECT QUALITY MANAGEMENT (MONITORING SPECIFICATION AND QUALITY) (p197) 76
PROJECT SCHEDULING 73
PROJECT SPONSOR (p154) 61
PROJECT TEAM (p158) 62
PUBLIC PRIVATE PARTNERSHIPS (PPP) 61
PUBLIC SECTOR AND NOT-FOR-PROFIT PERFORMANCE MANAGEMENT 89
QUALITY COSTS (PROJECTS) 77
QUALITY OF INFORMATION (p66) 36
RAPID PENETRATION STRATEGY 104
RAPID SKIMMING STRATEGY 104
RELATIONSHIP BETWEEN BUDGETS AND STRATEGIC PLANNING 46
RELATIONSHIP WITH RESPONSIBILITY ACCOUNTING (Budgets) (p105) 47
RESIDUAL INCOME (RI) (p180) 70
RESPONSIBILITY ACCOUNTING 47
RETURN ON INVESTMENT (ROI) (p179) 70
Revenue Centres (p105): 47
REVERSE FLOWS IN THE VALUE CHAIN (END OF ECONOMIC LIFE) 110
RISK ASSESSMENT (PROJECTS) (p169) 66
RISK CLASSIFICATION (PROJECTS) 67
RISK IDENTIFICATION (PROJECTS) 67
RISK MANAGEMENT (PROJECTS) 78
Having the right project team 78
Monitor known risks 78
Monitor for unknown risks 78
, Establish contingency responses 78
The risk–return trade-off 78
RISK MITIGATION (PROJECTS) 67
ROLE OF INCENTIVES AND REWARDS IN PERFORMANCE MANAGEMENT 97
ROLE OF INFORMATION SYSTEMS IN PERFORMANCE MANAGEMENT (p265) 90
ROLE OF MANAGEMENT ACCOUNTANTS IN STRATEGIC MANAGEMENT SKILLS: 16
ROLE OF PERFORMANCE MANAGEMENT IN IMPLEMENTING & MONITORING STRATEGY 91
ROLES OF OPERATIONAL PLANS, BUDGETS AND FORECASTS 46
SCENARIO ANALYSIS 71
SECURITY OF INFORMATION AND ETHICS OF INFORMATION 35
SENSITIVITY ANALYSIS 71
SETTING REALISTIC AND ACHIEVABLE TARGETS (p135) (Budgets) 57
SHAREHOLDER VALUE: 13
SIGNALLING 84
Six Sigma method 86
SLOW PENETRATION STRATEGY 105
SLOW SKIMMING STRATEGY 105
SOURCE OF INFORMATION—EXTERNAL VS INTERNAL (p60) 33
SOURCING, AGGREGATING AND INTEGRATING INFORMATION 33
SPARE CAPACITY DILEMMA 105
Stakeholder Grid Analysis: 30
STAKEHOLDER IDENTIFICATION AND ASSESSMENT FOR PROJECTS 66
STAKEHOLDER MANAGEMENT (PROJECTS) (p202) 78
STAKEHOLDER MANAGEMENT: 30
STAKEHOLDER RISK MANAGEMENT: 30
STAKEHOLDER VALUE 13
STEPS IN ACTIVITY-BASED COSTING (p308) 101
STIMULUS FOR A NEW OR UPDATED SYSTEM 42
STRATEGIC FIT FOR PROJECTS(p164) 65
STRATEGIC INFORMATION LEVEL (THE ROLE OF MANAGEMENT ACCOUNTANTS IN INFLUENCING STAKEHOLDER DECISION-MAKING (p71)) 40
Strategic Management Accounting & Service Industries: 15
Strategic management accounting and the public sector 16
Strategic Management Process (p6) 14
Strategic Analysis: 15
Strategy Planning & Choice: 15
Strategy implementation: 15
Strategy Evaluation: 15
Strategic Management: 14
Strategic Performance Management 91
Strategy and decision-making 85
Strategy and management control (p245) 85
Structural and Executional Cost Drivers: 105
SUPPLIER CODES OF CONDUCT (Upstream Activities) 115
SUPPLIER MANAGEMENT (Upstream Activities) 114
SUPPLIER SELECTION (Upstream Activities) 115
SUPPLY CHAIN DISRUPTIONS (Upstream Activities) 115
SURPLUS VALUE 104
System Development Life Cycle (SDLC); THE LIFE CYCLE OF SYSTEMS 44
TACTICAL INFORMATION LEVEL (THE ROLE OF MANAGEMENT ACCOUNTANTS IN INFLUENCING STAKEHOLDER DECISION-MAKING (p71)) 40
Target costing (p333) 108
TARGETS (Levels of analysis for performance improvement) 94
THEORIES RELATED TO PERFORMANCE MANAGEMENT (p240) 84
TIME-DRIVEN ACTIVITY-BASED COSTING (TDABC) (p316) 102
Timing (ROLE OF INCENTIVES AND REWARDS IN PERFORMANCE MANAGEMENT): 97
TOP-DOWN APPROACH (Budgets) 57
TOTAL QUALITY MANAGEMENT (TQM) (Upstream Activities) (p362) 116
TRANSACTION PROCESSING SYSTEMS (TPS): 32
TRENDS (Levels of analysis for performance improvement) 95
TRUSTED BUSINESS PARTNER 41
USING INFORMATION STRATEGICALLY 41
Value Analysis: 21
Value Chain: 99
VALUE ENGINEERING (VE) 101
VARIANCE ANALYSIS FOR BUDGETS HERE: (P118) 50
PROFIT- AND REVENUE-RELATED VARIANCES (P120) 51
DIRECT MATERIAL ANALYSIS (p122) 52
DIRECT LABOUR ANALYSIS (p124) 53
, VARIABLE MANUFACTURING OVERHEAD ANALYSIS (p125) 54
FIXED MANUFACTURING OVERHEAD ANALYSIS (p127) 55
VIRTUAL PROJECT TEAMS 65
VIRTUAL PROJECTS 61
WHAT IS ‘PERFORMANCE’ AND ‘PERFORMANCE MANAGEMENT’? 82
WHICH VIEWPOINT SHOULD BE TAKEN WHEN DETERMINING ‘VALUE’? 13
ZERO-BASED BUDGETING 58
,Module 1............................................................................................................................................... 13
Part A: Value (Page 3) ...................................................................................................................... 13
SHAREHOLDER VALUE: ................................................................................................................. 13
Customer Value: ........................................................................................................................... 13
STAKEHOLDER VALUE................................................................................................................... 13
WHICH VIEWPOINT SHOULD BE TAKEN WHEN DETERMINING ‘VALUE’? .................................. 13
Organisational Value Chain:......................................................................................................... 14
Primary Activities: .................................................................................................................... 14
Support Activities: .................................................................................................................... 14
PART B: THE STRATEGIC & OPERATIONAL MANAGEMENT PROCESS (p 6) .................................... 14
Strategic Management: ................................................................................................................ 14
The Strategic Management Process (p6) ................................................................................. 14
Strategic Analysis: ................................................................................................................ 15
Strategy Planning & Choice: ................................................................................................. 15
Strategy implementation: .................................................................................................... 15
Strategy Evaluation: ............................................................................................................. 15
Operational Management: (p7) ................................................................................................... 15
Broad Differences between strategic and operational management .................................... 15
Strategic Management Accounting & Service Industries: .......................................................... 15
Strategic management accounting and the public sector .......................................................... 16
PART C: ROLE OF MANAGEMENT ACCOUNTANTS IN STRATEGIC MANAGEMENT (p11) .............. 16
Business Partner Approach: ......................................................................................................... 16
Overseer approach: ...................................................................................................................... 16
Skills: ............................................................................................................................................. 16
How management accountants support an organisation (IFAC)................................................ 17
PART D: THE KEY CHALLENGES FACING MANAGEMENT ACCOUNTANTS (p15) ............................. 17
Technology: .................................................................................................................................. 17
Managing Resources: ................................................................................................................... 17
Innovation: ................................................................................................................................... 17
CAUSES OF CHANGE IN THE BUSINESS ENVIRONMENT (p17) .................................................... 17
The Global Economy:................................................................................................................ 17
Economic Turmoil:................................................................................................................ 17
Structural Change: ................................................................................................................ 17
The Basel 3 Accord: .......................................................................................................... 18
Globalisation: ....................................................................................................................... 18
Global Competition: ............................................................................................................. 18
, Physical and Capability Factors:........................................................................................... 18
Social factors & national cultures: ....................................................................................... 19
Legal and political systems: ................................................................................................. 19
Technology................................................................................................................................ 19
Capital Equipment: ............................................................................................................... 19
Information and communication technologies:.................................................................. 19
Cloud Computing: ............................................................................................................. 19
Employee-owned devices and open systems:................................................................. 19
Sustainability: ........................................................................................................................... 19
Corporate Social Responsibility – a stakeholder focus: ...................................................... 20
Environmental Management Accounting (EMA) ................................................................ 20
Ethics:.................................................................................................................................... 20
Functional Structure:................................................................................................................ 20
Flatter Hierarchies (p28): ..................................................................................................... 20
Offshoring & Outsourcing: ............................................................................................... 20
Virtual Offices and Global Teams: ................................................................................... 21
Joint Ventures and Alliances: ........................................................................................... 21
Management Reporting: .......................................................................................................... 21
PART E: ANALYTICAL TECHNIQUES AVAILABLE TO MANAGEMENT ACCOUNTANTS (p31 ............ 21
Value Analysis: ............................................................................................................................. 21
Organisation value chains: ....................................................................................................... 21
Industry value chains: .............................................................................................................. 22
SWOT Analysis: ............................................................................................................................. 22
Internal Environment Analysis:.................................................................................................... 22
Portfolio Theory and Product Life Cycles (p36): ...................................................................... 22
Product life cycle analysis ........................................................................................................ 22
Introduction Stage:............................................................................................................... 23
Growth: ................................................................................................................................. 23
Maturity ................................................................................................................................ 23
Decline: ................................................................................................................................. 24
The BCG Matrix:........................................................................................................................ 24
Star Products: ....................................................................................................................... 24
Cash Cow Products: .............................................................................................................. 24
Question Mark Products: ..................................................................................................... 25
Dog Products: ....................................................................................................................... 25
External Environment Analysis: ................................................................................................... 25
, Porter’s Five Forces Model (p39: ............................................................................................. 25
Force 1: New Entrants: ......................................................................................................... 25
Force 2: Alternative or substitute products ........................................................................ 25
Force 3: Customers ............................................................................................................... 25
Force 4: Suppliers: ................................................................................................................ 25
Force 5: Existing competitors: .............................................................................................. 26
PEST Analysis: ........................................................................................................................... 26
Regulation:............................................................................................................................ 26
Corporate Social Responsibility: .......................................................................................... 26
The Business Cycle:............................................................................................................... 26
Module 2: Information for Decision Making (p45) ............................................................................. 28
PART A: TYPES OF INFORMATION NEEDED FOR STAKEHOLDER DECISION-MAKING .................... 28
IDENTIFYING USERS WITH DIFFERENT INFORMATION NEEDS ................................................... 28
External Stakeholders and their information needs: .............................................................. 28
Internal Stakeholders: .............................................................................................................. 29
CORPORATE SOCIAL RESPONSIBILITY/INTEGRATED REPORTING: (p49) .................................... 29
STAKEHOLDER MANAGEMENT: ................................................................................................... 30
Stakeholder Grid Analysis: ....................................................................................................... 30
STAKEHOLDER RISK MANAGEMENT: ........................................................................................... 30
PART B: INFORMATION, INFORMATION SYSTEMS AND THEIR EFFECT ON ORGANISATIONAL
DECISION-MAKING AND PERFORMANCE (p55) .............................................................................. 31
Costs and benefits of information: .............................................................................................. 31
Functions of an information system: ........................................................................................... 31
DIFFERENT TYPES OF INFORMATION SYSTEMS........................................................................... 32
TRANSACTION PROCESSING SYSTEMS (TPS): .......................................................................... 32
MANAGEMENT ACCOUNTING SYSTEMS (MAS): ..................................................................... 32
PRODUCTION PLANNING AND CONTROL SYSTEMS (p58) ...................................................... 32
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRM) ................................................. 33
ENTERPRISE RESOURCE PLANNING SYSTEMS (ERP)................................................................ 33
DECISION SUPPORT SYSTEMS (DSS) ........................................................................................ 33
KNOWLEDGE MANAGEMENT SYSTEMS (KMSs) (Corporate Memory) ................................... 33
SOURCING, AGGREGATING AND INTEGRATING INFORMATION ................................................ 33
SOURCE OF INFORMATION—EXTERNAL VS INTERNAL (p60) ................................................. 33
METHODS OF AGGREGATION AND INTEGRATION OF INFORMATION................................... 34
Types of aggregation ............................................................................................................ 34
DIMENSIONS OF INFORMATION (p63) ........................................................................................ 35
, Financial vs Non-Financial Information: .................................................................................. 35
Primary vs Secondary Sources of Information: ....................................................................... 35
LIMITATIONS OF DIFFERENT KINDS OF INFORMATION .......................................................... 35
SECURITY OF INFORMATION AND ETHICS OF INFORMATION ................................................ 35
CHARACTERISTICS OF INFORMATION.......................................................................................... 35
QUALITY OF INFORMATION (p66) ............................................................................................... 36
EFFECTS AND CHALLENGES OF NEW INFORMATION SYSTEMS AND PLATFORMS (p69) ........... 37
DATA WAREHOUSING AND DATA MINING ............................................................................. 37
BIG DATA .................................................................................................................................. 37
BUSINESS INTELLIGENCE .......................................................................................................... 37
PART C: THE ROLE OF MANAGEMENT ACCOUNTANTS IN INFLUENCING STAKEHOLDER DECISION-
MAKING (p71)................................................................................................................................... 38
BALANCING STAKEHOLDER REQUIREMENTS AND INFORMATION DELIVERY............................ 38
DIFFERING LEVELS OF INFORMATION IN THE ORGANISATION .................................................. 39
STRATEGIC INFORMATION LEVEL ............................................................................................ 40
TACTICAL INFORMATION LEVEL: ............................................................................................. 40
OPERATIONAL INFORMATION LEVEL: ..................................................................................... 40
IMPORTANCE OF LINKING INFORMATION TO STRATEGY (p77) ................................................. 41
USING INFORMATION STRATEGICALLY ....................................................................................... 41
ROLES OF THE MANAGEMENT ACCOUNTANT ............................................................................ 41
TRUSTED BUSINESS PARTNER .................................................................................................. 41
CUSTODIAN OF INFORMATION................................................................................................ 41
PART D: UPGRADING OR REPLACING INFORMATION SYSTEMS (p83) ........................................... 42
STIMULUS FOR A NEW OR UPDATED SYSTEM ............................................................................ 42
MAKING A PRELIMINARY ASSESSMENT ...................................................................................... 42
INITIALLY ESTABLISHING THE SYSTEMS INFORMATION NEEDS OF STAKEHOLDERS ................. 42
Lack of information: ................................................................................................................. 42
Inadequate reports or unavailable suitable reports ............................................................... 42
Approach 1: The critical success factor approach (CSF) ...................................................... 43
Approach 2: Identify and analyse decisions approach ....................................................... 43
OTHER METHODS OF OBTAINING INFORMATION NEEDS (p89)................................................. 44
System Development Life Cycle (SDLC); THE LIFE CYCLE OF SYSTEMS ....................................... 44
PITFALLS IN EVALUATING MAJOR INFORMATION NEEDS .......................................................... 45
ANALYSING NEW AND EXISTING INFORMATION SYSTEMS ........................................................ 45
FEASIBILITY AND CRITERIA FOR A NEW INFORMATION SYSTEM ........................................... 45
MODULE 3: PLANNING, BUDGETING AND FORECASTING .................................................................. 46
Activity value analysis 112
ACTIVITY-BASED BUDGETING (ABB) 58
ACTIVITY-BASED COSTING (ABC) (p305) 100
Activity-based management 111
ACTIVITY-BASED MANAGEMENT (ABM) AND CONTINUOUS IMPROVEMENT (p343) 111
ADJUSTING TIME-DRIVEN ACTIVITY-BASED COSTING FOR MORE COMPLEX ACTIVITIES 102
Agency Theory: 84
ANALYSING NEW AND EXISTING INFORMATION SYSTEMS 45
BALANCED SCORECARD (BSC) (p254) 87
BALANCING STAKEHOLDER REQUIREMENTS AND INFORMATION DELIVERY 38
BCG Matrix: 24
Star Products: 24
Cash Cow Products: 24
Question Mark Products: 25
Dog Products: 25
BEHAVIOURAL CONSEQUENCES OF PERFORMANCE MANAGEMENT 96
BENCHMARKING (Levels of analysis for performance improvement) 95
BIG DATA 37
BOTTOM-UP APPROACH (Budgets) 57
Broad Differences between strategic and operational management 15
BUSINESS CASE FOR PROJECTS 65
BUSINESS INTELLIGENCE 37
BUSINESS MODEL CANVAS 86
Business Partner Approach: 16
Business process management (BPM) 112
CASCADING PERFORMANCE MEASURES 90
CAUSES OF CHANGE IN THE BUSINESS ENVIRONMENT (p17) 17
The Global Economy: 17
Economic Turmoil: 17
Structural Change: 17
The Basel 3 Accord: 18
Globalisation: 18
Global Competition: 18
Physical and Capability Factors: 18
Social factors & national cultures: 19
Legal and political systems: 19
Technology 19
Capital Equipment: 19
Information and communication technologies: 19
Cloud Computing: 19
Employee-owned devices and open systems: 19
Sustainability: 19
Corporate Social Responsibility – a stakeholder focus: 20
Environmental Management Accounting (EMA) 20
Ethics: 20
Functional Structure: 20
Flatter Hierarchies (p28): 20
Offshoring & Outsourcing: 20
Virtual Offices and Global Teams: 21
Joint Ventures and Alliances: 21
Management Reporting: 21
CHALLENGES FACING MANAGEMENT ACCOUNTANTS (p15) 17
Technology: 17
Managing Resources: 17
Innovation: 17
CHARACTERISTICS OF INFORMATION 35
CHARACTERISTICS OF PERFORMANCE MEASURES AND TARGETS (p274) 93
Validity (accuracy) 93
Reliability (Consistency) 93
Clarity 93
Timeliness 93
Accessibility 93
Controllability 93
COLLABORATIONS 61
COMPARING MULTIPLE PROJECTS (p182) 71
Contingency theory 85
,Continuous improvement (CI) (p351) 113
CORPORATE SOCIAL RESPONSIBILITY/INTEGRATED REPORTING: (p49) 29
Cost Centres: 47
COST DRIVERS 101
Costs and benefits of information: 31
COSTS AND BENEFITS OF PERFORMANCE MANAGEMENT 94
CRITICAL PATH METHOD—CRASHING PROJECTS (CPM) (p190) 75
Critical success factor approach (CSF) - Approach 1 43
CUSTODIAN OF INFORMATION 41
CUSTOMER PROFITABILITY ANALYSIS (Downstream Activities) 118
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRM) 33
Customer Value: 13
Cybernetic & Feedback controls 85
DATA MINING 37
DATA WAREHOUSING 37
DECISION SUPPORT SYSTEMS (DSS) 33
DEFICIENCIES IN ACCOUNTING-BASED MEASURES (PROJECTS) 70
DESIGNING A STRATEGY MAP FOR PERFORMANCE MANAGEMENT (p260) 89
DESIGNING SMART PERFORMANCE TARGETS (p272) 93
DIFFERING LEVELS OF INFORMATION IN THE ORGANISATION 39
DIMENSIONS OF INFORMATION (p63) 35
EARNED VALUE METHOD (EV Method): TIME VERSUS COST: (p195) 76
EFFECTS AND CHALLENGES OF NEW INFORMATION SYSTEMS AND PLATFORMS (p69) 37
ENTERPRISE RESOURCE PLANNING SYSTEMS (ERP) 33
EQUIVALENT ANNUAL CASH FLOW (EQUIVALENT ANNUAL ANNUITY) (EAC) (EAA): 71
ESTABLISHING THE SYSTEMS INFORMATION NEEDS OF STAKEHOLDERS 42
Lack of information: 42
Inadequate reports or unavailable suitable reports 42
OTHER METHODS OF OBTAINING INFORMATION NEEDS (p89) 44
ETHICALLY INFORMED DECISION-MAKING AND ITS IMPACT ON STAKEHOLDERS FOR PROJECTS 66
ETHICS AND PERFORMANCE MANAGEMENT (p238) 84
External Environment Analysis: 25
External Stakeholders and their information needs: 28
FINANCIAL ANALYSIS—SINGLE PROJECT (p172) 68
FINANCIAL BUDGETS PREPARATION 49
BUDGETED INCOME STATEMENT 49
CASH BUDGET 49
BUDGETED BALANCE SHEET 49
CAPITAL EXPENDITURE BUDGET 49
FINANCIAL PERFORMANCE MANAGEMENT (p223) 83
Financial vs Non-Financial Information: 35
FLEXIBLE BUDGET PREPARATION: 49
FRAMEWORKS FOR PERFORMANCE MANAGEMENT (p252) 86
Functions of an information system: 31
GLOBAL SUPPLIERS (Upstream Activities) 114
GNATT CHARTS: 73
GOVERNANCE, RISK AND PERFORMANCE MANAGEMENT 84
Group versus individual performance (ROLE OF INCENTIVES): 97
HARD AND SOFT FUNCTIONS 103
How management accountants support an organisation (IFAC) 17
Identify and analyse decisions approach - Approach 2 43
Identifying opportunities for achieving a reduction in product costs (5 questions): 106
IDENTIFYING USERS WITH DIFFERENT INFORMATION NEEDS 28
IMPORTANCE OF LINKING INFORMATION TO STRATEGY (p77) 41
IMPORTANCE OF PROBITY IN PROJECTS (Honesty, Integrity) 77
INCREMENTAL BUDGETING 58
Industry value chains: 22
INTEGRATED REPORTING (p232) 84
Internal Environment Analysis: 22
INTERNAL PROJECTS: 60
INTERNAL RATE OF RETURN (IRR) (p178) 70
Internal Stakeholders: 29
INTERNATIONAL PROJECT TEAMS 63
INTERNATIONAL PROJECTS 61
Investment Centres: 47
JOINT VENTURES 61
Kaizen costing (p336) 109
,KNOWLEDGE MANAGEMENT SYSTEMS (KMSs) (Corporate Memory) 33
LEADING AND LAGGING MEASURES OF PERFORMANCE 86
Lean accounting approach: 94
LEGAL IMPLICATIONS OF PRICE SETTING 105
LIFE CYCLE, TARGET AND KAIZEN COSTING (p330) 106
LIMITATIONS OF DIFFERENT KINDS OF INFORMATION 35
LIMITATIONS OF TRADITIONAL CONTROLS 86
MAJOR INFLUENCES ON PRICING DECISIONS (p323) 103
MAKING A PRELIMINARY ASSESSMENT (replacing info systems) 42
MANAGEMENT ACCOUNTING SYSTEMS (MAS): 32
MEASURABILITY AND REPORTING OF PERFORMANCE 83
MEASURING EFFICIENCY, EFFECTIVENESS AND EQUITY (PERFORMANCE MEASURES) 92
MEASURING PERFORMANCE (p199) 77
METHODS OF AGGREGATION AND INTEGRATION OF INFORMATION 34
Types of aggregation 34
MINIMISING INVENTORY LEVELS (Upstream Activities) (p356) 115
MODELS OF PERFORMANCE MANAGEMENT (p249) 86
MONETARY AND NON-MONETARY INCENTIVE SCHEMES (Budgets) 57
MONITORING COSTS (PROJECTS) : 76
MONITORING PROGRESS (PROJECTS) (p194) 76
MULTIPLE ROLES OF PERFORMANCE MANAGEMENT 83
NET PRESENT VALUE (NPV) (p172) 68
NEW INFORMATION SYSTEM FEASIBILITY AND CRITERIA 45
Non- Financial performance Measurement 85
NON-FINANCIAL PERFORMANCE MANAGEMENT 83
OFFSHORING 116
OPERATIONAL AND STRATEGIC PERFORMANCE 86
OPERATIONAL BUDGETS IN MANUFACTURING ORGANISATIONS PREPARATION(p110) 48
STEP 1: SALES BUDGET 48
STEP 2: PRODUCTION BUDGET 48
STEP 3: DIRECT MATERIALS COST BUDGET 48
STEP 4: DIRECT MANUFACTURING LABOUR COSTS BUDGET 48
STEP 5: MANUFACTURING OVERHEAD COSTS BUDGET 48
STEP 6: FINISHED GOODS INVENTORY BUDGET 48
STEP 7: COST OF GOODS SOLD BUDGET 48
STEP 8: PERIOD COSTS BUDGETS 48
OPERATIONAL INFORMATION LEVEL THE ROLE OF MANAGEMENT ACCOUNTANTS IN INFLUENCING STAKEHOLDER DECISION-MAKING (p71): 40
Operational Management: (p7) 15
Organisation value chains: 21
Organisational learning 96
ORGANISATIONAL STRUCTURES FOR PROJECTS 60
Organisational Value Chain: 14
Primary Activities:
Support Activities:
OUTSOURCING 116
Overseer approach: 16
PARTICIPATIVE BUDGETING 57
PAYBACK (Break -Even): (p179) 70
Performance 82
PERFORMANCE AND SUSTAINABILITY 83
Performance improvement 96
Performance management 82
PERFORMANCE MANAGEMENT AND CONTROL—THEIR ROLE IN STRATEGY (P242) 85
PERFORMANCE MANAGEMENT AND ITS LINKS TO STRATEGY 82
PERFORMANCE MANAGEMENT FOR PERFORMANCE IMPROVEMENT 94
Performance Management Systems (PMS) 85
PERFORMANCE MANAGEMENT, POWER AND CULTURE (p278) 94
PERFORMANCE MEASURE DESIGNING (Types of Performance Measures) (p269) 91
Performance measurement 82
PERFORMANCE MEASURES AND PERFORMANCE TARGETS 96
PERFORMANCE—A PROCESS OF VALUE CREATION 83
PERT: PROGRAM EVALUATION AND REVIEW TECHNIQUE (EXAMINABLE) (p186) 74
Step 1: Draw a network diagram
Step 2: Calculate expected time
Step 3: Define the critical path
Step 4: Calculate slack
PEST Analysis: 26
, Regulation: 26
Corporate Social Responsibility: 26
The Business Cycle: 26
Physical Environmental Management Accounting (PEMA) (NOT IN TEXTBOOK) 85
PITFALLS IN EVALUATING MAJOR INFORMATION NEEDS 45
Porter’s Five Forces Model (p39: 25
Force 1: New Entrants: 25
Force 2: Alternative or substitute products 25
Force 3: Customers 25
Force 4: Suppliers: 25
Force 5: Existing competitors: 26
Portfolio Theory and Product Life Cycles (p36): 22
PRICING STRATEGIES 104
Primary vs Secondary Sources of Information: 35
PRODUCT COSTING 100
Product life cycle analysis 22
Introduction Stage: 23
Growth: 23
Maturity 23
Decline: 24
Product life cycle costing 106
PRODUCTION PLANNING AND CONTROL SYSTEMS (p58) 32
Profit Centres: 47
PROFITABILITY INDEX (PI) (p179) 70
PROJECT BUDGETING (p192) 75
PROJECT COMPLETION 79
THE COMPLETION DECISION
CHECKLIST
SPECIFICATION SATISFACTION CONSENSUS
STRATEGIC FIT ASSESSMENT
STAKEHOLDER SATISFACTION ASSESSMENT
FINANCIAL CLOSURE: (p205)
RESOURCE DISPERSION
FINAL REPORT
KNOWLEDGE MANAGEMENT.
PROJECT LEADERSHIP AND THE MANAGEMENT ACCOUNTANT 62
PROJECT MANAGEMENT PROCESS 60
STAGE 1: PROJECT SELECTION (p149) 60
STAGE 2: PROJECT PLANNING 60
STAGE 3: PROJECT IMPLEMENTATION AND CONTROL 60
STAGE 4: PROJECT COMPLETION AND REVIEW 60
PROJECT MANAGER 62
Project Organisations: 60
PROJECT QUALITY MANAGEMENT (MONITORING SPECIFICATION AND QUALITY) (p197) 76
PROJECT SCHEDULING 73
PROJECT SPONSOR (p154) 61
PROJECT TEAM (p158) 62
PUBLIC PRIVATE PARTNERSHIPS (PPP) 61
PUBLIC SECTOR AND NOT-FOR-PROFIT PERFORMANCE MANAGEMENT 89
QUALITY COSTS (PROJECTS) 77
QUALITY OF INFORMATION (p66) 36
RAPID PENETRATION STRATEGY 104
RAPID SKIMMING STRATEGY 104
RELATIONSHIP BETWEEN BUDGETS AND STRATEGIC PLANNING 46
RELATIONSHIP WITH RESPONSIBILITY ACCOUNTING (Budgets) (p105) 47
RESIDUAL INCOME (RI) (p180) 70
RESPONSIBILITY ACCOUNTING 47
RETURN ON INVESTMENT (ROI) (p179) 70
Revenue Centres (p105): 47
REVERSE FLOWS IN THE VALUE CHAIN (END OF ECONOMIC LIFE) 110
RISK ASSESSMENT (PROJECTS) (p169) 66
RISK CLASSIFICATION (PROJECTS) 67
RISK IDENTIFICATION (PROJECTS) 67
RISK MANAGEMENT (PROJECTS) 78
Having the right project team 78
Monitor known risks 78
Monitor for unknown risks 78
, Establish contingency responses 78
The risk–return trade-off 78
RISK MITIGATION (PROJECTS) 67
ROLE OF INCENTIVES AND REWARDS IN PERFORMANCE MANAGEMENT 97
ROLE OF INFORMATION SYSTEMS IN PERFORMANCE MANAGEMENT (p265) 90
ROLE OF MANAGEMENT ACCOUNTANTS IN STRATEGIC MANAGEMENT SKILLS: 16
ROLE OF PERFORMANCE MANAGEMENT IN IMPLEMENTING & MONITORING STRATEGY 91
ROLES OF OPERATIONAL PLANS, BUDGETS AND FORECASTS 46
SCENARIO ANALYSIS 71
SECURITY OF INFORMATION AND ETHICS OF INFORMATION 35
SENSITIVITY ANALYSIS 71
SETTING REALISTIC AND ACHIEVABLE TARGETS (p135) (Budgets) 57
SHAREHOLDER VALUE: 13
SIGNALLING 84
Six Sigma method 86
SLOW PENETRATION STRATEGY 105
SLOW SKIMMING STRATEGY 105
SOURCE OF INFORMATION—EXTERNAL VS INTERNAL (p60) 33
SOURCING, AGGREGATING AND INTEGRATING INFORMATION 33
SPARE CAPACITY DILEMMA 105
Stakeholder Grid Analysis: 30
STAKEHOLDER IDENTIFICATION AND ASSESSMENT FOR PROJECTS 66
STAKEHOLDER MANAGEMENT (PROJECTS) (p202) 78
STAKEHOLDER MANAGEMENT: 30
STAKEHOLDER RISK MANAGEMENT: 30
STAKEHOLDER VALUE 13
STEPS IN ACTIVITY-BASED COSTING (p308) 101
STIMULUS FOR A NEW OR UPDATED SYSTEM 42
STRATEGIC FIT FOR PROJECTS(p164) 65
STRATEGIC INFORMATION LEVEL (THE ROLE OF MANAGEMENT ACCOUNTANTS IN INFLUENCING STAKEHOLDER DECISION-MAKING (p71)) 40
Strategic Management Accounting & Service Industries: 15
Strategic management accounting and the public sector 16
Strategic Management Process (p6) 14
Strategic Analysis: 15
Strategy Planning & Choice: 15
Strategy implementation: 15
Strategy Evaluation: 15
Strategic Management: 14
Strategic Performance Management 91
Strategy and decision-making 85
Strategy and management control (p245) 85
Structural and Executional Cost Drivers: 105
SUPPLIER CODES OF CONDUCT (Upstream Activities) 115
SUPPLIER MANAGEMENT (Upstream Activities) 114
SUPPLIER SELECTION (Upstream Activities) 115
SUPPLY CHAIN DISRUPTIONS (Upstream Activities) 115
SURPLUS VALUE 104
System Development Life Cycle (SDLC); THE LIFE CYCLE OF SYSTEMS 44
TACTICAL INFORMATION LEVEL (THE ROLE OF MANAGEMENT ACCOUNTANTS IN INFLUENCING STAKEHOLDER DECISION-MAKING (p71)) 40
Target costing (p333) 108
TARGETS (Levels of analysis for performance improvement) 94
THEORIES RELATED TO PERFORMANCE MANAGEMENT (p240) 84
TIME-DRIVEN ACTIVITY-BASED COSTING (TDABC) (p316) 102
Timing (ROLE OF INCENTIVES AND REWARDS IN PERFORMANCE MANAGEMENT): 97
TOP-DOWN APPROACH (Budgets) 57
TOTAL QUALITY MANAGEMENT (TQM) (Upstream Activities) (p362) 116
TRANSACTION PROCESSING SYSTEMS (TPS): 32
TRENDS (Levels of analysis for performance improvement) 95
TRUSTED BUSINESS PARTNER 41
USING INFORMATION STRATEGICALLY 41
Value Analysis: 21
Value Chain: 99
VALUE ENGINEERING (VE) 101
VARIANCE ANALYSIS FOR BUDGETS HERE: (P118) 50
PROFIT- AND REVENUE-RELATED VARIANCES (P120) 51
DIRECT MATERIAL ANALYSIS (p122) 52
DIRECT LABOUR ANALYSIS (p124) 53
, VARIABLE MANUFACTURING OVERHEAD ANALYSIS (p125) 54
FIXED MANUFACTURING OVERHEAD ANALYSIS (p127) 55
VIRTUAL PROJECT TEAMS 65
VIRTUAL PROJECTS 61
WHAT IS ‘PERFORMANCE’ AND ‘PERFORMANCE MANAGEMENT’? 82
WHICH VIEWPOINT SHOULD BE TAKEN WHEN DETERMINING ‘VALUE’? 13
ZERO-BASED BUDGETING 58
,Module 1............................................................................................................................................... 13
Part A: Value (Page 3) ...................................................................................................................... 13
SHAREHOLDER VALUE: ................................................................................................................. 13
Customer Value: ........................................................................................................................... 13
STAKEHOLDER VALUE................................................................................................................... 13
WHICH VIEWPOINT SHOULD BE TAKEN WHEN DETERMINING ‘VALUE’? .................................. 13
Organisational Value Chain:......................................................................................................... 14
Primary Activities: .................................................................................................................... 14
Support Activities: .................................................................................................................... 14
PART B: THE STRATEGIC & OPERATIONAL MANAGEMENT PROCESS (p 6) .................................... 14
Strategic Management: ................................................................................................................ 14
The Strategic Management Process (p6) ................................................................................. 14
Strategic Analysis: ................................................................................................................ 15
Strategy Planning & Choice: ................................................................................................. 15
Strategy implementation: .................................................................................................... 15
Strategy Evaluation: ............................................................................................................. 15
Operational Management: (p7) ................................................................................................... 15
Broad Differences between strategic and operational management .................................... 15
Strategic Management Accounting & Service Industries: .......................................................... 15
Strategic management accounting and the public sector .......................................................... 16
PART C: ROLE OF MANAGEMENT ACCOUNTANTS IN STRATEGIC MANAGEMENT (p11) .............. 16
Business Partner Approach: ......................................................................................................... 16
Overseer approach: ...................................................................................................................... 16
Skills: ............................................................................................................................................. 16
How management accountants support an organisation (IFAC)................................................ 17
PART D: THE KEY CHALLENGES FACING MANAGEMENT ACCOUNTANTS (p15) ............................. 17
Technology: .................................................................................................................................. 17
Managing Resources: ................................................................................................................... 17
Innovation: ................................................................................................................................... 17
CAUSES OF CHANGE IN THE BUSINESS ENVIRONMENT (p17) .................................................... 17
The Global Economy:................................................................................................................ 17
Economic Turmoil:................................................................................................................ 17
Structural Change: ................................................................................................................ 17
The Basel 3 Accord: .......................................................................................................... 18
Globalisation: ....................................................................................................................... 18
Global Competition: ............................................................................................................. 18
, Physical and Capability Factors:........................................................................................... 18
Social factors & national cultures: ....................................................................................... 19
Legal and political systems: ................................................................................................. 19
Technology................................................................................................................................ 19
Capital Equipment: ............................................................................................................... 19
Information and communication technologies:.................................................................. 19
Cloud Computing: ............................................................................................................. 19
Employee-owned devices and open systems:................................................................. 19
Sustainability: ........................................................................................................................... 19
Corporate Social Responsibility – a stakeholder focus: ...................................................... 20
Environmental Management Accounting (EMA) ................................................................ 20
Ethics:.................................................................................................................................... 20
Functional Structure:................................................................................................................ 20
Flatter Hierarchies (p28): ..................................................................................................... 20
Offshoring & Outsourcing: ............................................................................................... 20
Virtual Offices and Global Teams: ................................................................................... 21
Joint Ventures and Alliances: ........................................................................................... 21
Management Reporting: .......................................................................................................... 21
PART E: ANALYTICAL TECHNIQUES AVAILABLE TO MANAGEMENT ACCOUNTANTS (p31 ............ 21
Value Analysis: ............................................................................................................................. 21
Organisation value chains: ....................................................................................................... 21
Industry value chains: .............................................................................................................. 22
SWOT Analysis: ............................................................................................................................. 22
Internal Environment Analysis:.................................................................................................... 22
Portfolio Theory and Product Life Cycles (p36): ...................................................................... 22
Product life cycle analysis ........................................................................................................ 22
Introduction Stage:............................................................................................................... 23
Growth: ................................................................................................................................. 23
Maturity ................................................................................................................................ 23
Decline: ................................................................................................................................. 24
The BCG Matrix:........................................................................................................................ 24
Star Products: ....................................................................................................................... 24
Cash Cow Products: .............................................................................................................. 24
Question Mark Products: ..................................................................................................... 25
Dog Products: ....................................................................................................................... 25
External Environment Analysis: ................................................................................................... 25
, Porter’s Five Forces Model (p39: ............................................................................................. 25
Force 1: New Entrants: ......................................................................................................... 25
Force 2: Alternative or substitute products ........................................................................ 25
Force 3: Customers ............................................................................................................... 25
Force 4: Suppliers: ................................................................................................................ 25
Force 5: Existing competitors: .............................................................................................. 26
PEST Analysis: ........................................................................................................................... 26
Regulation:............................................................................................................................ 26
Corporate Social Responsibility: .......................................................................................... 26
The Business Cycle:............................................................................................................... 26
Module 2: Information for Decision Making (p45) ............................................................................. 28
PART A: TYPES OF INFORMATION NEEDED FOR STAKEHOLDER DECISION-MAKING .................... 28
IDENTIFYING USERS WITH DIFFERENT INFORMATION NEEDS ................................................... 28
External Stakeholders and their information needs: .............................................................. 28
Internal Stakeholders: .............................................................................................................. 29
CORPORATE SOCIAL RESPONSIBILITY/INTEGRATED REPORTING: (p49) .................................... 29
STAKEHOLDER MANAGEMENT: ................................................................................................... 30
Stakeholder Grid Analysis: ....................................................................................................... 30
STAKEHOLDER RISK MANAGEMENT: ........................................................................................... 30
PART B: INFORMATION, INFORMATION SYSTEMS AND THEIR EFFECT ON ORGANISATIONAL
DECISION-MAKING AND PERFORMANCE (p55) .............................................................................. 31
Costs and benefits of information: .............................................................................................. 31
Functions of an information system: ........................................................................................... 31
DIFFERENT TYPES OF INFORMATION SYSTEMS........................................................................... 32
TRANSACTION PROCESSING SYSTEMS (TPS): .......................................................................... 32
MANAGEMENT ACCOUNTING SYSTEMS (MAS): ..................................................................... 32
PRODUCTION PLANNING AND CONTROL SYSTEMS (p58) ...................................................... 32
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRM) ................................................. 33
ENTERPRISE RESOURCE PLANNING SYSTEMS (ERP)................................................................ 33
DECISION SUPPORT SYSTEMS (DSS) ........................................................................................ 33
KNOWLEDGE MANAGEMENT SYSTEMS (KMSs) (Corporate Memory) ................................... 33
SOURCING, AGGREGATING AND INTEGRATING INFORMATION ................................................ 33
SOURCE OF INFORMATION—EXTERNAL VS INTERNAL (p60) ................................................. 33
METHODS OF AGGREGATION AND INTEGRATION OF INFORMATION................................... 34
Types of aggregation ............................................................................................................ 34
DIMENSIONS OF INFORMATION (p63) ........................................................................................ 35
, Financial vs Non-Financial Information: .................................................................................. 35
Primary vs Secondary Sources of Information: ....................................................................... 35
LIMITATIONS OF DIFFERENT KINDS OF INFORMATION .......................................................... 35
SECURITY OF INFORMATION AND ETHICS OF INFORMATION ................................................ 35
CHARACTERISTICS OF INFORMATION.......................................................................................... 35
QUALITY OF INFORMATION (p66) ............................................................................................... 36
EFFECTS AND CHALLENGES OF NEW INFORMATION SYSTEMS AND PLATFORMS (p69) ........... 37
DATA WAREHOUSING AND DATA MINING ............................................................................. 37
BIG DATA .................................................................................................................................. 37
BUSINESS INTELLIGENCE .......................................................................................................... 37
PART C: THE ROLE OF MANAGEMENT ACCOUNTANTS IN INFLUENCING STAKEHOLDER DECISION-
MAKING (p71)................................................................................................................................... 38
BALANCING STAKEHOLDER REQUIREMENTS AND INFORMATION DELIVERY............................ 38
DIFFERING LEVELS OF INFORMATION IN THE ORGANISATION .................................................. 39
STRATEGIC INFORMATION LEVEL ............................................................................................ 40
TACTICAL INFORMATION LEVEL: ............................................................................................. 40
OPERATIONAL INFORMATION LEVEL: ..................................................................................... 40
IMPORTANCE OF LINKING INFORMATION TO STRATEGY (p77) ................................................. 41
USING INFORMATION STRATEGICALLY ....................................................................................... 41
ROLES OF THE MANAGEMENT ACCOUNTANT ............................................................................ 41
TRUSTED BUSINESS PARTNER .................................................................................................. 41
CUSTODIAN OF INFORMATION................................................................................................ 41
PART D: UPGRADING OR REPLACING INFORMATION SYSTEMS (p83) ........................................... 42
STIMULUS FOR A NEW OR UPDATED SYSTEM ............................................................................ 42
MAKING A PRELIMINARY ASSESSMENT ...................................................................................... 42
INITIALLY ESTABLISHING THE SYSTEMS INFORMATION NEEDS OF STAKEHOLDERS ................. 42
Lack of information: ................................................................................................................. 42
Inadequate reports or unavailable suitable reports ............................................................... 42
Approach 1: The critical success factor approach (CSF) ...................................................... 43
Approach 2: Identify and analyse decisions approach ....................................................... 43
OTHER METHODS OF OBTAINING INFORMATION NEEDS (p89)................................................. 44
System Development Life Cycle (SDLC); THE LIFE CYCLE OF SYSTEMS ....................................... 44
PITFALLS IN EVALUATING MAJOR INFORMATION NEEDS .......................................................... 45
ANALYSING NEW AND EXISTING INFORMATION SYSTEMS ........................................................ 45
FEASIBILITY AND CRITERIA FOR A NEW INFORMATION SYSTEM ........................................... 45
MODULE 3: PLANNING, BUDGETING AND FORECASTING .................................................................. 46
