AF313 Accounting for

Management Control

Paper Objectives & Schedule of Topics

Convenor: Umesh Sharma (Associate Professor)
Email: umesh.sharma@waikato.ac.nz
 AF313- Semester 1 2023
Specific Paper Objectives
 To provide you with an understanding of:
 Strategic Management Accounting
 Investment Appraisal
 Organisational change

 Contingency Theory:
 Implications for Organisational Structure and Strategies

 Implications for MAS/MCS design

 Critical commentary on contingency theory

 Decentralised Organisations:
 Responsibility Centres and Budgetary Processes

 Support Department Cost Allocations

 Transfer Pricing Issues

 AF313- Semester 1 2023
Specific Paper Objectives
 Activity Based Costing
 Traditional versus Activity Based Costing
 Activity Based Management and Continuous
Improvement

 The Balanced Scorecard

 Budgeting and management control system

 Week 1

 8 January

 Class Overview
 The Role and Development of Management Accounting

 9 January

 Strategic Management Accounting and Organisational

Change
 Institutional theory
 Privatisation Case Study
 Week 1

 10 January

 Process Costing
 Decision making and Relevant Information
 Special orders, Insourcing versus outsourcing, make versus
buy decisions

 January 12
 Investment appraisal
 Capital Budgeting, Discounted Cash Flow, Internal Rate of
Return, Accounting Rate of Return
 Week 2
 January 15
 Introduction to Contingency theory
 Contingency Theory: Implications for MAS/MCS Design
 Criticisms of Contingency Theory
 January 16
 Budgeting
 Management Control System Design
 Introduction to Compulsory Case study
 January 17
 Test Wednesday 17 January 5-6pm.
 Activity Based Costing
Week 2

 January 19
 Capacity Management
 Week 3
 January 22
 Measuring and reporting sustainability

 January 23
 Quality Management
 Inventory management, just-in-time

Case Study (Small Groups of 3-4) due 23/01/2023

5:00pm
 Week 3

 January 24
 Transfer Pricing Approaches
 Limitations of Transfer Pricing
 Multinational considerations
 Performance measurement
 Review of Topics
 Examination Guidance

 January 26
 Final Exam
 AF313- Semester 1 2019
Internal Assessment
 AF313 Students must do:
 In-class Test
 Due: 5 pm January 16

 Case Study
 Due: 5pm January 22
 Resources
 There are a number of key resources:
 Textbook
 Used for some content coverage
 Used for case studies

 Lecture Notes
 Sometimes complement textbook chapters

 Articles
 Must be read
 Have equal status to textbook and lecture notes
 Class Reps

 Any volunteers?
 Management Accounting
Provision of information to people within the
organisation to improve:
 Decision Making
 Planning
 Control

Other Aspects of management accounting

 Performance Measurement
 Costing
 Strategic Management Accounting
Financial and management
accounting
The major differences are as follows:
 Nature of the reports produced
 Level of detail
 Legal Requirements
 Reporting interval
 Time horizon
 Range of information
Financial and management
accounting
Nature of the reports produced
 Financial accounting reports tend to be
general purpose reports - information for a
broad range of users and decisions.
 Management accounting reports are often
specific-purpose reports. That is, they are
designed with a particular decision in mind.
Financial and management
accounting
Level of detail.
 Financial accounting reports provide users
with a broad overview - information is
aggregated and detail is often lost.
 Management accounting reports provide
managers with detail to help them with a
particular decision. Focus on individual parts
or segments of the organisation.
Financial and management
accounting
Legal Requirements
 Financial reports are subject to accounting
regulations - to produce a standardised
format.
 Management accounting reports are for
internal use - there are no restrictions on the
form and content of the reports. But there are
established practices
Costs and benefits of
accounting information
For information to be beneficial it needs to be:

 Relevant
 Understandable
 Reliable
 Comparable
 Timely
Facets of useful information

• Relevance. Accounting information must have the

ability to influence decisions.
• Understandability. Accounting reports should be
expressed as clearly as possible
• Reliability. Accounting information should be free
from any material error or bias
• Comparability. Items which are basically the same
should be treated in the same manner for
measurement and presentation purposes.
• Timeliness. Accounting information should be
available at reasonably frequent intervals
The changing nature of
management accounting
 Businesses have been faced with radical changes:
 The environment - has become increasingly turbulent and
competitive and there have been rapid advances in production
technology
 Organisation - changes to the way in which businesses are
organised and to the marketing and manufacturing strategies
employed
 Deregulation - Regulation
 Successful businesses are distinguished by their ability to
secure and maintain competitive advantage.