Introduction to MA

Week 01 Topic
01

ACCT112: Management Accounting

Themin Suwardy, SMU 2005

Resource persons in MA
Teaching Assistants

Gwendolin Tan

Ow Jun Ming

KS
Slide 2

Sng Jielin

ksleong@smu.edu.
sg

Seminar Outline

1. Why do we need MA?

2. MA and Strategy

3. MA & Professional Ethics

Slide 3

1.1 Why do we need MA?

Why
Why do
do we
we need
need
Management?
Management?

See Exhibit 1-2 p5 for Examples of Decisions

Slide 4

1.2 MA provides ?

Slide 5

1.3 We already have FA !

Pages 6-8
Slide 6

1.4 Basic Approach to Decision Making?

Decision-making
Decision-making is
is to
to choose
choose amongst
amongst
alternatives
alternatives
How
How do
do you
you choose
choose between,
between, say,
say, Projects
Projects A
A or
or
B
B

We will revisit this in Week 10 Topic 17 : Relevant Costing

Slide 7

Pause for Discussion (1) - An exercise in Costing

Slide 8

2.1 Knowledge of Strategy

What
What is
is a
a strategy?
strategy?

What
What is
is the
the ultimate
ultimate purpose
purpose of
of any
any
strategy?
strategy?

Pages 11-16
Slide 9

2.2 Knowledge of Business Operations

Physical
Resources
$$$

Human
Resources
$$$
Support services
Accounting
Human resources
Legal services
Information systems
Telecommunications

R&
D

Design Supply

Produc Markett-ion
ing

Distribution

Customer
service

Primary processes: Value Chain Exhibit 1-4 p13

Slide 10

STRATEGY
Where do we want to go?
How do we want to get there?

OBJECTIVE: Max Value

Value of
products
and
services

Pause for Discussion (2) - Costs & Strategy

R&D

Produc
t
Design

Manufacturin
g

Market
-ing

Distrib
u-tion

Custome
r Service

How
How to
to manage
manage costs
costs of
of manufacturing?
manufacturing?

Buy cheapest materials?

How to manage rising labour costs?
Save costs by cutting down on machine maintenance?
Should the manager look at only the Manufacturing
process to reduce manufacturing costs?
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2.3 A Broad base of knowledge & MAs Syllabus

Survival of the Organisation depends on:
Management
Plan

Direct

Control

BSC
(15)
Strategic
ABC (07)

Performance
Product

FAProfit
& MA

Environment
Govt.

Law

CVP
(04)
Tactical
Cap Bud (18)

Bidding
Demand
Game

Taxes

Operational
Budget (11)

CostCost
(ALL)

<Politics>

Budget
(11)
Assign
Tranfer P (16)

Process

Standards
Effectiveness
(13)

Business

Market

Instruct

Variance
Efficiency
(13)

Bidding
Competition
Game

Budget (11)
Co-ordinate
Standards (13)

OH
(06, 07)
Relevance
Rel Cost (17)

<Tech>

Product
Costing
Measure
(08, 09, 10)

People

Standards
Skill (13)

Society

Culture

Variance
(13)
Evaluate
BSC (15)

Variance
Productivity
(13)

Professional
Ethics
Ethics (01)

Budget (11)
Communicate
Variance (13)

Abs-Var.
Motivation
(05)

<Sociology>

Please refer to Course Outline & Exhibit 1-5 p17

Slide 12

3.1 Professional Ethics

Who
Who are
are you
you
responsible
responsible
to?
to?

Shareholders

Banks and
Potential
investors

Customers

CFO

Public
Colleagues
Slide 13

Suppliers

3.2 The IMA Code of Ethics

IMA Standard
Competence

Follow applicable laws, regulations and standards

Provide decision support information and recommendations that
are accurate and timely
Maintain professional expertise, and communicate any limitations
or constraints

Confidentiality

Do not disclose confidential information unless legally obligated to

do so
Do not use confidential information for personal advantage
Inform relevant parties about the proper use of confidential
information

Integrity

Avoid conflicts of interest and advise others of potential conflicts

Refrain from conduct that could compromise ethical performance
or discredit the profession

Credibility

Communicate information fairly and objectively

Disclose delays or deficiencies in information and its processing
Disclose all information that should influence an intended users
understanding of reports and analyses

Exhibit 1-6 p19

Slide 14

Pause for Discussion (3)

Your friends boss is asking customers to sign a sales agreement
just before the end of the year, indicating that a sale has been
made. Her boss then tells these customers that they will have 30
days to change their minds with no penalty. 30 days is well into
the next year. If they do not change their minds, then her boss
sends the merchandise to them. If they change their minds, her
boss agrees to cancel their orders, take back the merchandise, and
cancel the invoices. Her boss gives the sales agreements to the
accounting dept, which prepares an invoice and records the sales.
One of the people in accounting keeps the invoices and shipping
documents for these customers in a desk drawer until either the
customers change their minds, in which case the sale is cancelled,
or the merchandise is sent at the end of the 30-day waiting period.
Your friend wants to keep her job. What would you advise her to
do?
Slide 15

Q&A

Slide 16

Reinforcement of issues discussed

Why
Why do
do we
we need
need
Management?
Management?
The
The Generic
Generic Roles
Roles of
of MA?
MA?

What
What is
is Strategy?
Strategy?

Why
Why do
do we
we need
need Ethics?
Ethics?

Why
Why are
are you
you in
in SMU?
SMU?

Slide 17

Assessment Criteria
Criteria

Weight

Class activities & Participation

- Homework submission: 5%
- Online discussion:
5%
- There are opportunities to earn bonus marks

10%

Group Project
- Written report + Excel (group)
10%
- Presentation & Peer evaluation (individual) 5%

15%

Progress Assessments
- Test 1 12.5%
- Test 2 12.5%

25%

Final Examination

50%

50%

TOTAL

100%

Please refer to Course Outline for more details

Slide 18

Example of Exam/Test Question for Topic 01

2014-15-T1 Exam - Qn 13

Slide 19