Ibrahim Sameer (MBA - Specialized in Finance, B.Com Specialized in Accounting & Marketing)

Transcription

1 Ibrahim Sameer (MBA - Specialized in Finance, B.Com Specialized in Accounting & Marketing)

2 Information What is the difference between Data & Information?

3 Information Data is the raw material for data processing. Data relate to facts, events and transections and so forth. Information is data that has been processed in such a way as to be meaningful to the person who receives it. Information is anything that is communicated.

4 Information Qualities of good information Good information should be relevant, complete, accurate (not completely accurate or 100% accurate), clear, it should be inspire confidence, it should be appropriately communicated, its volume should be manageable, it should be timely and its cost should be less than the benefits it provides.

5 Planning, Control & Decision Making Planning Information for management is likely to be used for planning, control and decision making. Planning involve establishing objectives and selecting appropriate strategies to achieve those objectives. Planning can be short term or long term

6 Planning, Control & Decision Making Objectives of organization An objective is the intent or aim or goal of an organization (or an individual). A strategy is a possible course of action that might enable an organization (or an individual) to achieve its objectives.

7 Planning, Control & Decision Making Long term strategic Planning Long term strategic planning also known as corporate planning, involves selecting appropriate strategies so as to prepare a long term plan to attain the objectives.

8 Planning, Control & Decision Making Short term tactical Planning Short term tactical planning convert the corporate planning into a series of short term plans, usually covering one year, which relate to sections, functions or department.

9 Planning, Control & Decision Making Decision making Decision making always involves a choice between alternatives and it is the role of the management accountant to provide information so that management can reach an informed decision.

10 Anthony s View of Management Activity Anthony divides management activities into strategic planning, management control and operational control. Management control is concerned with decisions about the efficient and effective use of an organization s resources to achieve objectives or target.

11 Management Control System A management control system is a system which measures and corrects the performance of activities of subordinates in order to make sure that the objectives of an organization are being met and the plans devised to attain them are being carried out.

12 Types of Information Information within an organization can be analyzed into three levels assumed in Anthony s hierarchy strategic, tactical and operational.

13 Types of Information Strategic information is used by senior manger. Eg: Preparing Strategic Plan of the organization. Tactical information is used by the middle management. Eg: Monthly variance report. Operational information is used by front-line managers. Eg: Any routine work.

14 Financial Accounting & Cost & Management Accounting Financial accounting systems ensure that the assets and liabilities of a business are properly accounted for, and provide information about profits and so on to shareholders and other interested parties. Management accounting systems provide information specifically for the use of managers within an organization.

15 Financial Accounting & Cost & Management Accounting

16 Financial Accounting & Cost & Management Accounting Cost Accounts Cost accounting and management accounting are terms which are often used interchangeably. It is not correct to do so. Cost accounting is part of management accounting. Cost accounting provides a bank of data for the management accountant to use.

17 Financial Accounting & Cost & Management Accounting Cost accounting is concerned with the following: Preparing statement (eg: budget, costing) Cost data collection Applying costs to inventory, product and services.

18 Financial Accounting & Cost & Management Accounting Management accounting It is concerned with the following: Using financial data and communicating it as information to users.

19 Q & A