Management Accounting - Science topic

Strategic Management Accounting (SMA) is all about using the right financial and non-financial information to make smart, long-term business decisions. Key practices include tools like the Balanced Scorecard to track performance, Activity-Based Costing to understand costs better, and competitor analysis to stay ahead. Companies also use techniques like forecasting, customer profitability analysis, and scenario planning to adapt quickly and allocate resources more effectively. Embracing big data and sustainability, along with aligning the workforce with company goals, helps organizations stay competitive, make informed choices, and build long-term value. These practices work together to create a more agile, forward-thinking business.

Nice

Sustainability reporting has become part of the annual reporting. Management accountants can determine potential risks related with company`s operations, like regulatory changes, environmental liabilities imposed on the company. Management accountants can develop strategies to mitigate these risks and ensure the long-term viability of the organization. Management accountants make sure that that the company complies with all relevant environmental and sustainability regulations.

This is measured within the company. Data is collected in every function of the company. Actually, Ahmad Toumeh said whatever can be said. Using this data, you can measure many parameters and observe the progress. In every department there are ratios and measures to observe the progress. They can be checked against the benchmarks on a monthly basis or even more frequently as required in the circumstances.

Does it matter?

Earning Management.

Have a look at the book of Andreas Taschner

Hello Ilter,

thanks for your contribution.

Best regards,

Rubin

Hello, please take a look at this research. These statistical coefficients are used for determining the conformity or reliability of experts' evaluations, and the Kendall coefficient with a value greater than or equal to 0.7 was considered as the stopping index for the procedure of the Delphi method.

I had an associate professorship exam in 2010 in Turkey. It was an oral exam in front of a jury of five professors from Accounting/Finance. My professors were all accounting professors in the jury. I basically checked and read their textbooks in their fields. That`s what they were going to ask. You may not remember everything of course since it is an oral exam. But make sure that you show them that you know the subject matter. Just be yourself and answer the questions to the best of your knowledge. Don`t be scared that you make a mistake. We are all human and can make mistakes. Just be careful what you are answering. Also, do not answer more that required. It may carry the subject to other waters. Just be yourself. Check his/her articles in public domain. No need to prepare power point slides since you do know the questions. It is going to be a friendly talk.

Trend analysis

Go for ratio or some applications

https://www.oecd-ilibrary.org/docserver/536410876068.pdf?expires=1629230969&id=id&accname=guest&checksum=6AD08D15595F4E73CEAFD00D5C043FEF

Corporate governance has become a subject of active academic and policy debate throughout the world. In the UK and US, there is much discussion of the deficiencies of the market system in delivering effective governance. In continental Europe, there is a concern that existing systems of governance are stifling innovation and growth. In Eastern Europe, privatisation has given way to questions about the way in which private enterprises should be governed. China is experimenting with forms of corporate governance which attempt to blend some of the features of market systems with state ownership of enterprises. 2. Despite the intense debate, evidence on the effects of different governance systems is still sparse. Corporate governance has become a subject on which opinion has drowned fact. The purpose of this paper is to review what is known about the influence of corporate governance on corporate performance and competitiveness. 3. Policy formulation would be most readily assisted by evidence on the direct relation between governance and competitiveness. The equivalent of a reduced form relation which identifies the effect of changing governance on performance is what is generally regarded as the bottom line of the governance debate. However, such a relation is extremely difficult to uncover. The range of factors which bear on cross-firm or cross-country variations in performance is considerable. This does not stop many from equating differences in economic performance between, for example, Germany and the UK to their different forms of corporate governance. Indeed, the origins of the long-standing debate on governance can be attributed to associations of this sort. 4. What is more productive than trying to provide a "macro" answer is to consider the way in which governance can bear on performance. There are probably five areas in which such a relation can exist - incentives, disciplining, restructuring, finance and investment, and commitment and trust. This paper will consider the evidence on the influence of corporate governance on each of these in turn. It will draw on the academic literature available on corporate governance systems in several different countries. 5. A particular focus with which this analysis is concerned is the interaction between competition, governance and performance. The interaction is important for several reasons. Firstly, the effectiveness of different types of governance systems may be influenced by the degree of product market competition. As will be discussed below, some governance systems create high degrees of concentration of ownership and control. Competition between both existing firms in the market and potential new entrants may be seriously constrained by the way in which companies are owned and controlled.

Customer satisfaction can be measured by achieving market share, acquiring and keepining customers, meeting their needs, and feedback about the products or services provided, and creating value for the customer.

So if the company fails to provide the product or service in a way that meets the customer's needs and at appropriate cost in the short and long-terms, revenues will be generated, which leads to a deterioration in the financial position of the company. Therefore, it is necessary for the company to follow up any changes in quality, delivery time, ability to deliver and any changes in the current and future tastes and needs of customers.

I conduct research in the following areas, analyze the determinants of the development of these issues, possible mutual correlations, etc .: improvement of credit risk and cybercrime risk management, implementation of Industry 4.0 technology into management systems, use of Big Data Analytics in the process of improving management of economic entities, sustainable economic development, green economy, social environmental responsibility etc. Best wishes,

Dariusz Prokopowicz

you can review the Hilton , drury and hornegren publications

Dear Vijayanand,

What is your problem?Please specify your problem exactly.

Differential costs are wider than marginal costs, because marginal costs are differential costs.

Binary questions of the either-or variety do not often generate much knowledge. How about both-and? Why not synergize the Balanced Scorecard and the Input-Process-Output-Outcome model?

in the real world step 1 the person setting control shouldn't be the subject of evaluation - this is a conflict of interest.

as the MA is more of an internal consultant words like leader and respect rather than professional partner bother me.

Having said all that there is nothing stopping you technically - I would just NOT DO THAT ethics is a thing.

Another is ethics in Healthcare Services.

Samir Yassin

(Principles of management by Terry Franklin), Frankwood, R S N Pillai

(Principles of management by Terry Franklin), Frankwood, R S N Pillai

By my mean, scholarship for PG in Management will be good stimulation in increase of quality management.

'Operating profit' is the operating income from revenues minus cost of goods sold and operational expenses, excluding amortisation and depreciation .

Seriously, a good journal's review process is more than six months, and then a year or more before it is in an edition. There is no such thing as reputable quick publishing. If you pay money to quickly publish, you might as well throw your money away.

There are a lot of them in books of ICAI and Book of Management Accounting for CA Final by Dr. P C Tulsian

ROA, ROE and NPM: mostly used. But then they’re market based measure of performance such as EPS

I do not quite agree with the above answers because they have attempted to answer a question that is a little ambiguous in the following respects:

"cost of debt is 10% and tax rate is 30%. then, after tax cost of debt will be 7%" Yes that is the cost of the debt liability to the borrower. But it is not the cost of debt to the lender because from the lender's perspective it is an asset not a liability. The lender will have borrowed those funds from other sources (eg customer deposits in the case of a bank, or maybe wholesale borrowing from other banks) so the lender will have a completely different and unrelated cost of debt. The lender's marginal tax rate may also be different from that of the borrower.

"so, how can the after tax cost of debt(i.e., after tax required rate of return) be 7%?" Because that is the after-tax cost of debt to the borrower not the lender, as explained above.

"it means, 7% cost of debt(i..e, after tax cost debt) is only from the company view point, but not from the debt capital contributors view point. am I right?" Yes. But in your question you have used the terms "firm", "company", "debt capital providers", "contributors of capital", "contributors of debt capital", "debt capital holders" ... which makes your question difficult to follow.

I am fairly sure you are only ever referring to Borrower and Lender. So if you only used those two terms the question would probably be clearer to understand.

Hope that helps!

NIM is calculated as a percentage of interest bearing assets. For example, a bank's average loans to customers was $100.00 in a year while it earned interest income of $6.00 and paid interest of $3.00. The NIM then is computed as ($6.00 – $3.00) / $100.00 = 3%. Net interest income equals the interest earned minus the interest paid out to customers.

In particular, for a bank or a financial institution if the non-performing assets are high, their NIM will go down as the interest earning assets are that much reduced by non-performing assets.

Tax regulations and the American Society of Appraisers define fair market value as

The accounting standards define fair value as

I agree with these definitions. As we can see similarities are more apparent than differences.

Some Differences between Price, Cost and Value

1. Price is what you pay for goods or services you acquire; Cost is the amount of inputs incurred in producing a product and Value is what goods or services pay you i.e. worth.

2. Price and costs are calculated in numerical terms. Value can never be calculated in numbers.

3. Price and costs are the same for all the customers. Value varies from customer to customer.

4. Price refers to the money given to the seller for the product while cost involves the seller’s money to produce values. Cost can include labor, capital, materials, bills, salaries and wages of workers, and other transactions like marketing and distribution and shipping.

Dear Srikanth

For public firms you can use this formula:

((Stock market price per common share X number of common shares) +(Stock market price of preferred shares X number of preferred shares) + (market value of publicly-traded debt) + (book value of remaining debt items))/(Total book value of assets)

where book value is the same as the balance sheet figure

Tobin's Q was originally defined as equal to the market value of the assets divided by the replacement cost of the assets. This work well if you are talking about a physical asset like a residential house where you can buy an existing house in the retail market or instead buy land and build a new house.

Raymond A. K. Cox

Thompson Rivers University

Even though this may not be directly related, I have sucessfully applied the very concept of balancing scorecard to achieve excellence in product manufacturing.

Take a look.

According to Mohamed E. Bayou, (1993) The stock of new terms in management accounting emanating from expansion in computer applications, flexible manufacturing systems, and quality controls is expected to grow. Unless a proper standardization arrangement is created, co‐ordination problems in communication will reach insurmountable levels. In light of the “linguistic relativity and determinism hypothesis” (also known as the “Sapir‐Whorf hypothesis”), researchers concluded that different professional affiliations in accounting create different linguistic repertoires or codes for intergroup and intragroup communications. Structuralism and its “doctrine of linguistic relativity,” which asserts that there are no universals in language, convey the difficulty of communication between nations with different languages. These difficulties constrain the growth of an international management accounting discipline. Terminology standardization reduces these problems. Considers the theoretical and practical arguments for standardization, the mechanics of standardization, and suggests an answer to the obvious question of who should be responsible for terminological standards. Included are the results of a survey, conducted in the United States, of management accountants dealing with the difference between current and desired levels of terminology standardization.

Kaplan of Harvard attempted to link strategy with individual actions through the company scorecard that they have developed. Essentially, they link corporate actions to individual divisions or businesses' performance by assigning ket performance indicators (KPIs). The business level KPIs are then translated into individual KPIs (or how the role of individuals or a group of individuals) could be aligned towards the achievement of the business KPIs.

Thank you all for your help. 

There are two aspects of this problem:

1. Corporate donations may reduce tax burden (CIT) - thus may become a kind of a tax shield. However, in that case CSR costs always exceed benefits from the tax shield and must have other purposes. Than CSR costs are not only donations. 

2. CSR may be used by polluting companies as an argument against raising environemntal taxes. It is well known that self-regulation helps postponing or softening regulation introduced by the government. Than this case is not tax evasion - it is lobbying.

regards!

Dear,

you should utilise a dynamic partial adjustment model.

to study the details, just go through any econometrics book on DPAM model.

Many many thanks Joffrin and Ildefonsc

dear,, already done...... but bit technical 

I think internal audit is inherent with a very complex issues that only can be explored and explained by using qualitative approach such as a case studies or a good number of individuals interviewers with internal auditors. in addition, studying internal audit function need to explore factors and other parties that can influence on their responsibilities such as audit committee, CFO, CEO, and external auditor.  Thanks for raising such question 

Thank you all for your answers which were helpful.

Organisational legitimacy is generally considered to be a dichotomous phenomenon; either you have it, or you don't. However there are a few studies that operationalise legitimacy on a scale. See these studies:

Ruef, M., & Scott, W. R. (1998). A multidimensional model of organizational legitimacy: Hospital survival in changing institutional environments. Administrative Science Quarterly, 43(4), 877-904.

Deephouse, D. L. (1996). Does isomorphism legitimate? Academy of Management Journal, 39(4), 1024-1039.

See also this study:

Vergne, J. P. (2011). Toward a New Measure of Organizational Legitimacy: Method, Validation, and Illustration. Organizational Research Methods, 14(3), 484-502.

An asset helps us generate revenue and so a green asset produces revenue with the additional aspect of an ability to be renewable.  Solar energy would be a good example.

Adrian has identified the weaknesses.  You are, at best, collecting memories of change and respondents perceptions of that change.  I also think that the response rate will be disappointing

Roger

Dear Gedion,

I think it is a good idea to rely on a pre-existing framework for the sake of assurance and controllability. I think it is pretty difficult to develop your own framework from scratch that will be of a quality required by practice and by academia. Also, if you develop your own idea of something going beyond the established framework or even challenging it, you can test your idea against the framework and you will have a reliable source of reference.

Paul

Accountability to who and what?  ...Accountability of clinician in diagnosis of symptoms,  in meeting treatment goals, or accountability of patient for his behavior?

Some peer reviewed papers are

The Effect of Misspecification of Reflective and Formative Constructs in Operations and Manufacturing Management Research

The Use And Misuse Of Structural

Equation Modeling In Management

An assessment of the use of partial least squares structural equation modeling in marketing research

Formative versus Reflective Measurement Models: Two applications of formative measurement

I agree with Mohammad Namazi and many on this thread that STRATEGIC management concepts do provide  a road-map to take the firm to a greater height based on its capabilities and weaknesses.

I have done  some  research in applying concurrent management principles to improve productivity and efficiency of firms.  

You may find the following interesting in that regard... Even though techniques may be different but basic objectives remain the same.

Thanks

.

 Hello.

I believe that the following papers would provide some answers to your question.

Regards.

I very much agree with Paul Louangrath. A thorough search in related or prior empirical studies can guide you in the selection, measurement and definition of relevant variables.

Again, the concepts, models and theories underpinning management accounting practices can also guide the selection of variables.

Finally, remember that there is nothing like a "perfect research". Every research work may have some issues. However, it is your ability to provide adequate justification supported by relevant literature on the methodology that reduces the biases associated with your research.

Dear Collegue; i had study and research about your field about environmental and cost accounting, but I have some paper in Spanish. Are you interesting over there?

There are many articles or papers on Integrated thinking on the IIRC website as well as other websites, but it all boils down to how an organisation's management uses the concept of integrated thinking - which is not really new - as one would expect management has a broad view of what impacts on a business/risks/opportunities or what is deemed material on the organisation's viability/sustainability going forward - and how this then impacts on all spheres of the organisation - yes, systems thinking, agile thinking all just semantics in that context in my view - but ultimate how does a company use the various capitals (6) to either destroy and create value - given the interrelationship of these capitals within and outside the organisation - using the capitals as the framework is but one approach - HOWEVER, what typically happens in these reports is that the financial capital element is the primary focus with little or no focus on exactly how the other capitals influence the EACH OTHER.

From the literature it is measured via dimension, the level of usage is usually measured perceptually. In public sector it is harder to measure since the nature of the service is different as compared to private environment. For example the notion of "customer" and "internal process" is rather blur in public sector (this is in the case of Malaysia), in Australia I am not that sure.

The crucial ingredient that is missing in the preceding comments is benchmarking. Performance is relative. For a single company in isolation, trying to interpret it is a waste of time. That is because the economics of industries varies hugely across them.

Even if the SME is not publicly held, it can still be benchmarked against a group of public companies in the same or a similar industry. However, the financial statements of the SME might have to be 'adjusted' because many SME owners prefer to take legal steps to minimize taxes rather than maximize profits. Examples include: keeping a drunken relative on the payroll when a non-relative would have been fired long ago; buying a lakeside condominium for "company retreats"; providing at SME expense an automobile for a relative who doesn't work at the company; and so on.

Finding out this kind of information requires the ability to ask difficult questions in a non-threatening, non-adversarial way. Anyone who thinks it's easy hasn't tried it. I know that because asking such questions is a key aspect of how I make my living valuing SMEs. Benchmarking SMEs against public companies in the same or similiar industry is also part of the valuation process.

Dear Shweta Agarwal

I think many factors may be effect of working capital , such as inflation rate ,interest rate , financial position , GNP , GDP . These variables  related to monetary and fiscal policy .

Best Regards

You will find Management Accounting and Control Systems: An Organizational and Sociological Approach, 2nd Edition. Norman B. Macintosh, Paolo Quattrone and Wickramasinghe, D., and Alawattage, C. (2007) Management Accounting Change: Approaches and Perspectives. Routledge: London, UK very useful. I have attached some papers that you may find useful.

Cost and Management Accounting is focused on providing data for management's decision making. Management Accounting is centered on getting timely and accurate financial and operational data to assist in pricing and costing activities. IT will therefore not replace accounting but rather enhance its relevance as control mechanisms will be achievable in real time rather than wait for days to analyse hard copies.

 And that fallacy is what?

My impression is that you are trying to reinvent the hot water. Besides the active and passive banking operations, the "neutral banking operations" category.covers exactly the same services you would like to distinct with a new name.

Moreover: I would not think it is a good idea to redefine such a fundamental term like 'banking operation' - it would cause a confusing situation in the profession.

Greetings.

You can refer to Kaplan and Atkinson, Pearson Education and also please do refer the previous researcher's recommended book. It will add a new dimension to reviewing management accounting

Regards

Try define with their website

You can use Cumulative Abnormal Ruturn (CAR) method to evaluate earnings announcement effect on stock price.

n stocks, the sum of all the differences between the expected returns and the actual returns up to a given point in time. Since the expected return is computed by an asset pricing model, the cumulative abnormal return may be used to determine how accurate the model is. More often, it is used to investigate the affect extraneous events have on stock prices.

Sum of the differences between the expected return on a stock (systematic risk multiplied by the realized market return) and the actual return often used to evaluate the impact of news on a stock price.

My first answer is for the question "What should NOT be the budgeting process?" It should NOT be bottom up consolidations of cost center spreadsheets at the expense account line-item level.

The correct answer involves top down modeling. This combines 4 components: (1) driver-based operational expenses (forecasted volume and mix "times" unit level cost consumption rates; (2) strategy expenses (e.g., initiatives derived from a strategy map); (3) risk mitigation expenses; and (4) capital asset/project expenses.

See the attached article I authored that explains these titled "What is Broken about Budgeting?' This method described also applies to frequent interval rolling financial forecasts. The annual budget is typically obsolete within months after it is published. 

I presume you are referring to "drivers" to calculate the costs of products, channels, and customers typically used in an ABC system. (There are many influencing cost drivers, like weather, that cause costing drivers.)

Next, there are resource cost drivers and activity cost drivers. The former are more easily determined, and are typically percentage splits (totaling 100%) of labor and others for non-wage expenses.

The latter is involves a technique. After the activity dictionary is created, the simple question is "What would make the amount of the activity cost for each activity significantly increase or decrease?" The answer should be "number of X."

So, for example in a hospital patient profitability, if the work activity is "perform patient blood tests" then the activity cost driver is "number of blood tests."

I have implemented ABC for 30+ years and written books and many articles on ABC.

In literature there is no agreement about that. Many scholars support the idea that the conversion is neither logically acceptable nor reliable in practice. If you belong to the opposite team, in any case only self-valuation can give you the answer. A fairly “long scale” (at least 7 steps, but better 11 (0-10)) and a representative sample may lead to acceptable results (see: Van Praag, B., 2007, Perspectives from the Happiness Literature and the Role of New Instruments for Policy Analysis, 2007, IZA Discussion Paper No. 2568.). Nevertheless, I am not fully convinced that a subject answering 8 (a question such as “from 0 to 10 who happy are you?) means that s/he is double as happy as who answered 4. Best. Francesco

Chin WW. How to write up and report PLS analyses. In: Handbook of Partial Least Squares: Concepts, Methods and Application. Esposito Vinzi, V.; Chin, W.W.; Henseler, J.; Wang, H. (Eds.).Springer. Germany. 2010. 645-689.

 Hair JF. Hult GT. Ringle CM. Sarstedt M (2013), “A Primer on Partial Least Squares Structural Equation Modelling (PLS-SEM),” 1 ed. Thousand Oaks: Sage; 2013.

I am not an academic but am a practitioner with experiences in management accounting, including activity-based costing (ABC). I have learned that ABC is less applicable for hotels (as well as cruise ships and airlines. This is because they have these conditions:

-- Fixed capacity

-- Perishable inventory

-- Segmentable demand

-- Time-variable demand patterns

-- Relatively high fixed and relatively low variable costs

As a result, what hotels require to improve profitability is “revenue management” targeted at individual customers. The objective is to maximize revenue by “selling the right product at the right price to the right customer at the right time”. This is typically accomplished via hotel loyalty programs offering deals, discounts, packages, etc. months and weeks in advance until “Day 0” to achieve 100% bookings that evening. 

Gary Cokins

This is perfect to start with: thank you very much

I think you can consider the number of employees (non-financial measures), too.

Yes Helena, and more. However, the survey has been closed for a while and cannot be reopened under the terms and conditions of the research study. See my other message about my LinkedIn invitation. Thanks, Ron.

You can, aside following indications on activity costs, conduct a classical analysis on variable and fixed costs - if you can solve the problem with a few variation on variable costs and maintain the fixed costs - only variable are relevant - and than, only these are important to decide...

In fact, many entities used it - you can find some examples of use in several books in the area of management accounting - e.g. HANSEN, Don R. e MOWEN, Maryanne M. (2001). Management Accounting - between many others...

I am interested in sustainability accounting topic. If anyone can help is there any discussion groups on this topic, and further research idea.

There are some experiencies of regulation of environmental issues in financial reports as Spain. You can find more info (in Spanish) via Google writing "Resolucion ICAC 2002 medio ambiente". Also the European Union has a recommendation about this (in the European languagues, like English and French). Write on Google "Commission issues Recommendation on environmental issues in companies' annual accounts and reports".

This is an interesting area. Theory of organisational culture will be very useful. You can take a look at power distance theory. Methodology such as confirmatory factor analysis, SEM may be very useful if ur data instrument is quantitative. Caveat: Your data will determine your analytical tool.