http://assignment-partner.com/ .That's a sample paper - essay / paper on the topic "Management accounting" created by our writers!
Disclaimer: The paper above have been completed for actual clients. We have acclaimed personal permission from the customers to post it.
Web & Social Media Analytics Previous Year Question Paper.pdf
Management accounting
1. MANAGEMENT ACCOUNTING 1
Management Accounting
To begin with we would like to provide definition and explanations of the terms
accounting and management or managerial accounting. In our opinion, one of the most
appropriate definitions of the term “accounting” is the following.
“The purpose of accounting is to provide the information that is needed for
sound economic decision making. The main purpose of financial accounting is to
prepare financial reports that provide information about a firm's performance to
external parties such as investors, creditors, and tax authorities” (Financial
Accounting).
In short, the main goal of accounting is to provide informational basis for making
reasonable decisions by the different stakeholders of a company. We can divide these
stakeholders into two groups – internal and external ones. External stakeholders are a
company’s clients, shareholders, partners, investors, creditors and regulative bodies. Internal
stakeholders are a company’s managers and employees.
These groups of stakeholders have different purposes of making decisions. External
stakeholders usually tend to get some benefits from investing in a company or from
purchasing its goods and services. On the other hand, internal stakeholders need information
to make decisions, related to a company’s production and financial operations, performance,
in general.
According to this division we are able to point two types of accounting – financial and
managerial accounting. Financial accounting is for external users, while managerial
accounting is for internal users to make needed decisions. This is the main difference
between these two kinds of accounting. Respectively, these two types may be prepared by the
different professionals. Financial accounting must be conducted by the professional
2. MANAGEMENT ACCOUNTING 2
accountants, while managerial accounting can be prepared by simple employees, since it does
not require some particular knowledge.
Respectively, managerial accounting is not regulated by some strict principles or
standards. It is usually done in form that is the most appropriate for the managers of a
company. Financial accounting is regulated by the accounting standards, about which we are
going to talk below. It caused by the fact that the main goal of financial accounting is to
check a company’s reliability and transparency. It should be done to protect the interests of
the mentioned groups of external stakeholders and society, in general.
Now it is time to provide background information about the company under
consideration. We have chosen Rogers Communications Inc. It is a Canadian company that
specializes in media and communications. It operates in three major segments: wireless, cable
and media. It is relatively new company, but has already managed to become one of the
leading companies in the industry. Some additional information about the company can be
got from the following quite.
“Wireless, which refers to its wireless communications operations, carried
on by Rogers Communications Partnership (RCP). Cable, which refers to its cable
communications operations, carried on by RCP. Media, which refers to its wholly
owned subsidiary Rogers Media Inc. and its subsidiaries, including Broadcasting,
Publishing, and Sports Entertainment. Rogers Broadcasting Limited holds 100%
of Rogers Sportsnet Inc. directly and indirectly through its subsidiary Rogers
Sports Group Inc. Blue Jays Holdco Inc., through its subsidiaries, holds a 100%
interest in the Toronto Blue Jays Baseball Club (Blue Jays) and Rogers Centre.
On January 4, 2011, it acquired Atria Networks LP (Atria). On February 28, 2011,
Cable acquired the assets of Compton Cable T.V. Limited (Compton)” (Rogers
Communications Company Profile).
3. MANAGEMENT ACCOUNTING 3
Now it is time to analyze the features of the company’s management accounting. In
order to do it we will need the company’s financial statements and annual reports that can be
found on the official website.
Talking about management accounting, we first of all mean such processes as budgeting
and cost accounting. The company under consideration uses the so-called activity-based
costing in accounting for the production costs. A formal definition of this approach to costing
is the following.
“An accounting method that identifies the activities that a firm performs,
and then assigns indirect costs to products. An activity based costing (ABC)
system recognizes the relationship between costs, activities and products, and
through this relationship assigns indirect costs to products less arbitrarily than
traditional methods” (Activity Based Costing Definition).
Simply speaking, this approach assigns the production costs to the different departments
and even production processes. The main advantage of the approach is that a company is able
to define its strong and weak sides. As a result, the strong sides can be strengthened and the
weak sides can be eliminated.
This approach is really complicated and requires effective accounting system. That is
why the company uses automated accounting system. It is the so-called cost accounting
application. The system was developed by the outsourcing agency. This agency constantly
monitors and improves the system.
The budgeting process is quite typical in the company. There is special department
responsible for these processes. Also, internal principles of the budgeting processes are
developed and implemented. The only difference is that the company’s subsidiaries prepare
their own budgets. Then all the budgets are united in the consolidated financial plan.
4. MANAGEMENT ACCOUNTING 4
Respectively, the needs of all the departments are accounted and the integrity of the
company’s finances is kept.
We should also mention that the company has developed a whole set of principles and
rules of management accounting. They should be kept by every employee. Inability to follow
the rules is punished by financial and other fines. These rules are like the accounting
standards in the financial accounting. In fact, they are based on these standards.
To conclude we would like to say the following. We have analyzed the following
company in this research paper – Rogers Communications. It is a Canadian company that
specializes in media and communications. It operates in three major segments: wireless, cable
and media. Our main task was to explore how the management accounting is realized in the
company.
Management accounting – is accounting for the internal users, prepared according to the
internal standards. The main things in management accounting are budgeting and cost
accounting.
The company under consideration uses the so-called activity-based costing in
accounting for the production costs. Simply speaking, this approach assigns the production
costs to the different departments and even production processes.
The budgeting process is quite typical in the company, done according to the internal
standards and rules. The only difference is that the company’s subsidiaries prepare their own
budgets. Then all the budgets are united in the consolidated financial plan.
Thus, the company under consideration is quite traditional in the processes of
management accounting. All the theoretical concepts are realized on practice.
5. MANAGEMENT ACCOUNTING 5
References
Activity Based Costing Definition. Retrieved April 3, 2012, from
http://www.investopedia.com/terms/a/abc.asp#axzz1qzGAY819
Financial Accounting. Retrieved April 3, 2012, from
http://www.quickmba.com/accounting/fin/
Rogers Communications Company Profile. Retrieved April 3, 2012, from
http://www.reuters.com/finance/stocks/companyProfile?symbol=RCIb.TO
Rogers Official Website. Retrieved April 3, 2012, from
http://www.rogers.com/web/Rogers.portal?_nfpb=true&_pageLabel=Home