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Higher National Diploma in Accountancy

Forth Year – Semester 11
Subject Code – HNDA 4201
Strategic Management Accounting

Answers for Past Paper Questions-2011-2016

Lesson 1
Introduction To Strategic Management Accounting

2016-Q1-I Definition Of SMA

2015-Q1-I Definition Of SMA
2014-Q1-I/II /III Definition Of SMA
Difference Between SMA And
Traditional Mgt.Acc
Impact Of IT To Mgt.Accounting
2013-Q1-A/B Mgt.Accounting Changes
Factors Influencing Mgt.Accounting
Changes
2012-Q1-I/II Differences Between MA And FA
2011-Q1-I/II /III Definition Of SMA
Differences Between MA And FA
Impact Of IT To Mgt.Accounting

HNDA-SMA-4th Year-Lesson 1-Answers for Past paper Questions 2011-2016-Ms.S.H.Gallage

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2016-Q1-I

 A form of management accounting in which emphasis is placed on information

which relates to factors external to the entity, as well as non-financial
information and internally generated information.
Or
 The provision and analysis of financial information on the firm’s product
markets and competitors’ costs and cost structures and the monitoring of the
enterprise’s strategies and those of its competitors in these markets over a
number of periods.

2015-Q1-I

Question & answer same as 2016-Q1-I

2014-Q1-I

Question & answer same as 2016-Q1-I

HNDA-SMA-4th Year-Lesson 1-Answers for Past paper Questions 2011-2016-Ms.S.H.Gallage

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2014-Q1-II

Any 2 differences from following

Conventional Strategic Management
Management Accounting Accounting

1. Focus -Internal -External

-Tactical and operational
2. Reporting unit Whole organization
3. Type of information Financial information
4. Technology Manual accounting system
5. Timeline History
6. Users Chief executive officer
(CEO)
7. benefit Controlling personnel
8. Fit Stable business environment
and low competition
9. Profitability analysis Products
10. Performance Monthly bases financial
appraisal review
11. Investment appraisal Financial evaluation with
strict criteria
12. Ownership Stand-alone under control of
the accountant
13. Approach to cost Ex-post cost control via
analysis department/product costing
system
Period based manufacturing
costs and monthly
departmental budget,
volume the principal cost
drive
14. Techniques 1. Standard costing
2. Marginal costing
3. Budgetary control
4. Historical cost
accounting
-Strategic
Strategic business unit
Financial and non-financial
information
Computerised accounting
system
Future
Management and
employees
Personal development
Turbulence and competitive
Product, customers
,Markets
Three/six monthly
dimensional review
To promote decision based
on judgement
Part of wider MIS with
team ownership of strategic
review process
Ex-anti cost control based
on targeted future lifelong
costing set to attain
required profit level at
market set price
Process/ activity costing
based on analysis of
multiple cost drivers
studied in a specific context.
1. Target Costing
2. Kaizen Costing
3. Life Cycle Costing
4. Theory of constraints
(TOC)
5. Bench Marking
6.Just in time (JIT)

HNDA-SMA-4th Year-Lesson 1-Answers for Past paper Questions 2011-2016-Ms.S.H.Gallage

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2014-Q1- III

I can agree with this statement.

During the past decade the use of information technology to support business
activities has increased drametically with the development of electronic business
communication technology known as e-business, e-commerce or internet
commerce.these developments are having a big impact on businesses.For example
consumers are becoming more discerning when purchasing products or services
because they are able tpo arrive more information from the internet on the relative
merits of the different product.

Now a day,s ,the management of most of the organizations use the sophisticated
software,s in making decisions.following are the examplea for sophisticated software
used by the modern business organization.
Enterprise resource planning(ERP)
Material resource Planning (MRP)
Computer adided design (CAD)
It also has an impact due to the following as well
Accuracy,speed,input and output facilities/Calculations and decision making
capabilities.

2013-Q1-a

The competitive environment, also known as the market structure, is the dynamic
system in which our business competes. This competitive environment will affect to
changes in Management Accounting. The state of the system as a whole limits the
flexibility of our business. World economic conditions, for example, might increase
the prices of raw materials, forcing companies that supply our industry to charge
more, raising your overhead costs. At the other end of the scale, local events, such as
regional labour shortages or natural disasters, also affect the competitive
environment.

In the business plan of every small enterprise is a section analysing the competitive
environment. The competitive environment encompasses all the external factors that
compete with the services or products of the small business. Ignoring any of these
factors results in having an incomplete picture that can lead to poor decision-making.
The most obvious examples of elements in a competitive environment are a business's
direct competitors, but other examples are regulatory sources, indirect competitors
and social and technological changes.

2013-Q1-b

HNDA-SMA-4th Year-Lesson 1-Answers for Past paper Questions 2011-2016-Ms.S.H.Gallage

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The factors influencing Management accounting change are

 Globalization of world trade
 Privatization of government-controlled companies and deregulation in various
industries
 Changing customer taste that demand ever improving levels of service in cost,
quality, reliability, delivery and the choice of new product
 The emergence of e-business

2012-Q1-I
Any 4 from following

BASIS FOR
FINANCIAL ACCOUNTING MANAGEMENT ACCOUNTING
COMPARISON

Meaning Financial Accounting is an The accounting system which

accounting system that focuses on
the preparation of financial
statement of an organization to
provide the financial information to
the interested parties.
provides relevant information to the
managers to make policies, plans and
strategies for running the business
effectively is known as Management
Accounting.

Is it compulsory? Yes No

Information Monetary information only. Monetary and non-monetary

information

Objective To provide financial information to To assist the management in planning

outsiders. and decision making process by
providing detailed information on
various matters.

Format Specified Not specified

Time Frame Financial Statements are prepared at The reports are prepared as per the
the end of the accounting period need and requirements of the
which is usually one year. organization.

User Internal and external parties Only internal management.

HNDA-SMA-4th Year-Lesson 1-Answers for Past paper Questions 2011-2016-Ms.S.H.Gallage

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BASIS FOR
FINANCIAL ACCOUNTING MANAGEMENT ACCOUNTING
COMPARISON

Reports Summarized Reports about the Complete and Detailed reports

financial position of the regarding various information.
organization

Publishing and Required to be published and Neither published nor audited by

auditing audited by statutory auditors statutory auditors.

2012-Q1-II

Question & answer same as 2016-Q1-I

2011-Q1-I

Question & answer same as 2016-Q1-I

2011-Q1-II

Question & answer same as 2012-Q1-I

2011-Q1-III

Question & answer same as 2014-Q1- III

HNDA-SMA-4th Year-Lesson 1-Answers for Past paper Questions 2011-2016-Ms.S.H.Gallage