CONCEPT SUMMARY

Wednesday, 23 August 2023 10:21 pm

BASIC CONSIDERATION IN MAS

Function: providing professional advisory (consulting) services.

Management Advisory Services

Primary purpose: to improve clients' use of its capabilities and resources to achieve the objectives of the organization.

Management Strategies (TBOC) Basic Functions of Management (POSDCon)

 Top-level planning  Planning

 Business-level strategy a. Basic function of management
 Operational strategy b. Chalking out future course of action
 Corporate-level strategy  Organizing
→ Bringing together physical, financial, and human resources
 Staffing
→ Function of manning
Financial Accounting vs. Management Accounting
 Directing
Financial Accounting Management Accounting → Actuates organization methods to work efficiently for the achievement of organizational purposes
1. For external users 1. For internal users a. Supervision
2. Summarizes past 2. Strong emphasis on the □ Overseeing the work of subordinates
transactions future
3. Objective and 3. Relevant □ Act of watching and directing work and workers
verifiable 4. Focuses on timeliness of b. Motivation
4. Focuses on precision information
5. Reporting for a 5. Focuses on segments of □ Inspiring, stimulating or encouraging subordinates
company as a whole the company c. Leadership
6. MUST conform to 6. Not bound by financial
financial accounting accounting standards
□ Manager guides and influences the work of subordinates in desired direction
reporting standards 7. Not mandatory d. Communication
7. Mandatory □ Passing information, experiences, and opinion from one person to another
 Controlling
Treasurer vs. Controller (In terms of roles and activities) a. Measurement of accomplishment against standards
b. Correction of deviation, if there is any
Treasurer
→ involves money
Controller Ethical Standards in MAS
→ consists of accounting related functions but does not
involves money IMA Code of Ethics
1. Personal standards
Line vs. Staff Authority a. Competence - fit to the job
b. Confidentiality
Line (Downward authority) c. Integrity - straightforward
→ Directly involved in the daily operations of a business d. Credibility - report everything without bias
Staff (Upward/lateral authority) 2. Resolution of conflict
→ Provide assistance and specialized advice and expertise to
colleagues in line position IMA's Overarching Principles
1. Honesty
2. Fairness
Roles and Activities of Managerial Accountant 3. Objectivity
4. Responsibility
I. Strategic Decisions
Global Trends in Management Accounting
Five (5) Stages of the Process
1. Clarify your vision 1. The shift to predictive accounting
2. Gather and analyze information 2. Business analytics imbedded in Enterprise Performance Management (EPM) methods
3. Formulate a strategy → Three (3) primary methods of business analysis
4. Implement your strategy 1. Descriptive - will describe the current situation
5. Evaluate and control 2. Predictive - what will begin in the future
3. Prescriptive - data analytics can provide you information/ decisions/ recommendations
Sources of Competitive Advantage that will work in the future
Michael Porter's Three (3) Generic Strategies → Benefits of business analytics
1. The cost leadership strategy □ More informed decision making
2. The differentiation strategy □ Greater revenue
3. The focus strategy □ Improve operational efficiency
3. Managing information technology and shared services as a business
II. Identifying and Building Resources and Capabilities 4. Expansion from product to channel and customer profitability analysis
5. Co-existing and improved management accounting methods
Michael Porter's 5 Competitive Forces → Three (3) categories of factors in change of management accounting
1. Competition in the industry 1. External
2. Power of new entrants into an industry 2. Internal
3. Power of suppliers 3. Organizational
4. Power of customers 6. Management accounting's expanding role with EPM
5. Threats of substitutes → Four (4) main themes of EPM
1. Target setting
Boston's Consulting Group (BCG) Growth-share 2. Integrated business planning
Matrix 3. Performance measurement & reporting (PMR)
1. Dogs (or Pets) 4. Analytics
2. Cash cows

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 → Four (4) main themes of EPM
1. Target setting
Boston's Consulting Group (BCG) Growth-share 2. Integrated business planning
Matrix 3. Performance measurement & reporting (PMR)
1. Dogs (or Pets) 4. Analytics
2. Cash cows 7. The need for better skills and competency with behavioral change management
3. Stars → Five (5) roles that managers and supervisors must play in times of change
4. Question marks 1. Communicator about the change
2. Advocate for the change
III. Role in Implementing Strategy 3. Coached for employees
a. Implementing strategy 4. Liaison to the project team
b. Supporting managers 5. Resistance manager
c. Enhancing the value of management accounting
systems

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