OULU BUSINESS SCHOOL
Approaches in management accounting research
Term Paper
Ermela Bufi 1/25/2013
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Contents
A Field Study of the Emerging Practice of Beyond Budgeting in Industrial Companies: An Institutional Perspective - Henttu-Aho, T. & Järvinen, J. (2013) - ................................................. 4 Research question ..................................................................................................................... 4 Motivation of the study......................................................................................................... 4 Purpose of the article ............................................................................................................ 5 Relevance of the
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2 Research question ................................................................................................................... 14 Motivation of the study....................................................................................................... 14 Purpose of the article .......................................................................................................... 14 Relevance of the study ........................................................................................................ 15 Method .................................................................................................................................... 15 Research design................................................................................................................... 15 Data collection..................................................................................................................... 15 Data analysis........................................................................................................................ 15 General approach to management accounting ...................................................................... 15 Theory ..................................................................................................................................... 16 Results
Budgeting systems turn managers’ perspectives forward and by looking to the future and planning, managers are able to anticipate and correct potential problems before they arise (Horngren, Foster & Datar, 2000). Through budgeting, management can plan ahead and maintain enough cash to pay creditors, to have adequate raw materials to meet production requirements, and to have sufficient finished goods to meet expected sales (Kieso, 2002).
Financial Statement Analysis Project -- A Comparative Analysis of Kohl’s Corporation and J.C. Penney Co
Question 1: The situation in this case study revolves around Sally, a member of the Board of Sally Susie's Donut Shop, Inc. (SSDS). SSDS uses an accrual method of accounting and over the past three years has seen volatile sales. Sally is unhappy with her previous tax advisor and wants new advice. Our task is to outline a preliminary interview with Sally to ensure that we ask the right questions.
“Ending Inventory” = “Beginning Inventory” ($22,000) + “Purchases” ($30,000) – “Cost of Goods sold” ($24,000) = $52,000 - $24,000 = $28,000
In order to complete the study, research questions were developed with specific variables in order to determine the results
The traditional product-costing system undercosts the Satin Sheen product line, with respect to quality-control costs by $525
CF is the new controller for the consumer division of ABC company. In the past five years, ABC’s earnings have grown by at least 15% annually, with the consumer division’s earnings growing by over 20% annually over the same time-period. In the 4th quarter of the current year, however, it is projected that consumer’s income will grow by 8% and ABC’s will grow by 10%. ML, consumer division’s president, wants CF to take some of the following “end of the year” actions in order to improve consumer’s reported earnings. Under the previous controller, these types of actions were more or less taken as acceptable practices.
While the traditional management accounting techniques may have contributed to planning, controlling and decision making processes at the nation state level, the requirements of globalisation in which nation states now compete for survival in the global market rather than state market, has rendered traditional techniques obsolete and therefore calls for the mobilisation of modern techniques of management accounting. It also calls for the service of accountants with modern management accounting techniques for a successful implementation.
Management in business and human organization activity, in simple terms means the act of getting people together to accomplish desired goals. Management comprises planning, organizing, ->resourcing, leading or directing, and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal. Resourcing encompasses the deployment and manipulation of human resources, financial resources, technological resources, and natural resources.
This research paper is a brief discussion of budget management analysis. Budgeting is the key to financial management, and is the key to translates an organization goals or plan into money. Budgeting is a rough estimate of how much a company will need to get their work done, and provides the basis for evaluating performance, a source of motivation, coordinating business activities, a tool for management communication and instructions to employees. Without a budget an organization would be like a driver, driving blinded without instructions or any sense of direction, that’s how important a budget is to every organization and individual likewise (Clark, 2005).
Significance of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
The traditional budgeting process has been criticized as a cumbersome process which occupies considerable management time. This process might take up nearly half of the year to prepare for some company. This is because “most of the budgets are very detailed and require the input and back and forth negotiation of many people throughout the organization, which only adds to the
One of the most non-value-added activities within financial management is budgeting. Budgets are prepared to allocate and control how resources will be used in the future. Unfortunately, the future is hard
Budgets lie at the core of every business practice. The tools are the major evaluators of managerial effectiveness and overall organizational performance. Businesses can achieve effective control and planning through the application of the right budgeting approaches in financial and accounting activities. Nonetheless, these benefits can only be realized if the managers of a company use the most effective models that take into account all relevant factors, which influence a firm’s budget. An inefficient method automatically leads to attainment of poor results. In this light, practitioners in the financial and accounting sectors evaluate different budgeting techniques in terms of efficiency, flexibility, accurate results, and ease of use. One of the approaches that attract immense criticism in respect to these considerations is the traditional budgeting approach. It is, therefore, essential to look into the reasons as to why the model has been criticized as a rigid method that should be eliminated (Zeller & Metzger 2013).
Traditional budgeting provides a roadmap of controlling and managing an organization looking on the past, the present and the future by using