Management Accounting
1. Aim
The Chartered Secretary practises within the setting of both strategic (boardroom) and operations management. A command of the concepts and practices of management accounting is crucial to fulfilling these responsibilities.
The aim of the module is to develop the knowledge and skills necessary for the Chartered Secretary to employ the principles and practices of management accounting in strategic and operational activities.
2. Learning Outcomes
At the conclusion of this module, the candidate will be able to:
- Understand the language, concepts and applications of management accounting.
- Undertake the preparation and presentation of management accounting information for corporate decision making purposes.
- Interpret management accounting information for strategic and operational purposes.
- Handle budget planning and management responsibilities
- Undertake the management accounting role for employers and clients.
3. Pre-requisite Learning
This module is a component of the ICSA Professional Programme Part I. It is designed to enable aspiring Chartered Secretaries to (a) demonstrate required standards of competence for professional practice in a key discipline, and (b) acquire essential knowledge and skills to underpin the relevant components of the Professional Programme.
Evidence of assessed knowledge and understanding must be demonstrated through the Institute's examinations, or those of equivalent qualifications which have been approved as meeting the Institute's required curriculum and standards.
The module specification is based on the assumption of some relevant prior certificated knowledge, and candidates will find it helpful to have familiarised themselves particularly with:
- An introduction to the principles of book-keeping and accountancy.
4. Learning Content
The Purposes of Management Accounting
Information for management planning, decision making, control, and appraisal. The nature of costs,: cost concepts, cost units and cost centres.
The Context of Management Accounting
Manufacturing: traditional and modern; extractive industries; service industries; just in time (JIT) production and purchasing; multinationals. Corporation tax; sales/value added taxes.
Types of Planning, Controls and Decision
The decision making process. Planning, decision making, the control/appraisal cycle: information requirements. Feedback.
The Nature of Costs
Decision, planning and control horizons. Impact on cost definitions. Cost behaviour; cost classification; relevant costs; learning curve; specific costs; opportunity costs.
Planning, Decision Making, Control and Appraisal
Short term: the contribution concept; break-even analysis; cost volume profit (CVP) analysis; sensitivity analysis; limiting factors; differential costing; use of standard costs for short-term planning and decision making.
Medium term: semi-variable costs; marginal costing; impact of absorption costing on decision making and behaviour; activity-based costing (ABC). Budgeting: fixed; flexible; rolling; activity-based (ABB); budgetary control; variance analysis; behavioural aspects. Cash budgets. Standard costing: variance analysis (price and efficiency variances); reasons; calculation; investigation; interpretation; behavioural aspects; limitations. Cost ratios and labour efficiency. Non-financial service indicators. Quality measures. Customer profitability analysis.
Longer term: lifecycle costing; cost reduction and value analysis; target costing; investment appraisal - payback, accounting rate of return, discounted cash flow (net present value); transfer pricing; inter-firm, inter-divisio
