Unit 14: Advanced
Management Accounting
Unit code Y/508/0537
Unit level 5
Credit value 15
Introduction
The overall aim of this unit is to develop students’ understanding of management accounting. The focus
of this unit is on critiquing management accounting techniques
and using management accounting to evaluate company performance. Students will explore how the decisions taken
through the use of management accounting techniques influence managerial behaviour across an organisation.
On successful completion of this unit
students will be in a position to support an organisation to create value through effective decision-making where
management accounting is used, to some degree,
to control members
of an organisation. In addition, students will
have the fundamental knowledge and skills
to progress on to a higher level of study.
Learning Outcomes
By the end of this unit
students will be able to:
- Analyse the purpose
for developing and presenting financial information.
- Evaluate the use of management accounting techniques to
support organisational performance.
- Analyse actual and
standard costs to control and
correct variances.
- Evaluate how a changing business environment impacts on
management accounting.
Essential Content
LO1 Analyse the purpose
for developing and presenting financial information
Users of financial information:
This would include
investors, senior management, banks and government.
Developing financial statements:
Critiquing why financial
information should be developed into statements.
The value of financial statements in support
of a financial plan and decision-
making.
Presenting financial information:
Critiquing the use of profit and loss statements, trial balances, cash flow
statements and balance sheets
as methods to present financial information.
LO2 Evaluate the use of
management accounting techniques to support organisational performance
Microeconomic techniques:
These would include cost analysis, cost-volume profit, flexible budgeting and cost variances. Also consider absorption and marginal costing.
Cost allocation:
Considering the theoretical aspects
as well as how this
is applied in practice.
Capital and capital budgeting:
The meaning behind these
terms will be discussed, their
importance and their use. Techniques include
Net Present Value
(NPV), Internal Rate of Return
(IRR), Discounted Cash
Flow (DCF) and pay back periods.
LO3 Analyse actual and
standard costs to control and correct variances
Actual costs:
What does this mean?
How is actual cost
determined?
How does this differ to
estimated or standard costs?
Standard costs:
What does this mean?
How is standard cost
determined?
How does estimating
standard costs result in variances?
Variances:
Variance analysis
as a concept and a technique. Negative and positive variances.
How can a negative variance
be considered a positive and vice versa?
Controlling and correcting variances:
Integrating variance
analysis into budget monitoring across an organisation. Reporting systems for monitoring and controlling
variances.
Schedule variance vs cost variance.
LO4 Evaluate how a changing business
environment impacts on management
accounting
Analysing changes to a business environment:
Internal and external analysis
techniques.
Comparing the outcomes of analysis to inform decisions and to evaluate
possible implications for
management accounting.
Impact of the business
environment on management accounting
systems:
Using technology to enhance
and support processes and procedures.
The role of improved
communication within a system to expedite decision- making.
Impact
of change on management accounting
systems: Determining the impact
of different types
of change. Deciding how to respond to different types of
change. Ensuring effective
communication and acceptance of change.
Learning Outcomes and
Assessment Criteria
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Pass
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Merit
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Distinction
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LO1 Analyse the purpose for developing and
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presenting financial information
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P1 Analyse the purpose
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M1 Evaluate how and
why
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D1 Critically evaluate
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and presentation of
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financial information
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financial information
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|
financial information
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should be
developed and
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supported by effective
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|
from the perspective of
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appropriately presented
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and
appropriate
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different stakeholders.
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to support financial
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judgements.
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planning and decision-
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making.
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LO2 Evaluate the
use of management accounting techniques to support organisational performance
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|
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P2 Evaluate the use of
different management accounting
techniques in application to supporting organisational performance.
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M2 Evaluate the value and
importance of a range of management accounting
techniques by assessing both advantages
and disadvantages.
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LO2 and
LO3
D2 Critically evaluate the application of different
management
accounting techniques and variances
to support conclusions and recommendations.
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LO3 Analyse actual
and standard costs
to control and correct variances
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P3 Analyse the concept of variance analysis
in its importance for organisational budget control.
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M3 Evaluate the advantages and disadvantages of different types of variances.
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P4 Analyse actual and standard costs to control and correct variances.
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LO4 Evaluate how
a changing business environment impacts on management accounting
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D3 Critically evaluate the impact of changes, and support
justified recommendations for future communication and
acceptance of change.
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P5 Evaluate how external and internal factors changing the business environment impact upon management accounting.
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M4 Determine the impact of different types of change and
the decisions made to respond to
these changes.
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