Course Resources Archive

This module will complement the “Business Information Management” module by examining the various ways in which accounting can be used within businesses to support their managements through techniques of cost analysis and budgetary control.  These will be related to management’s functions of making decisions, both short-term and long-term, to support changes, and of measuring and controlling performance to ensure the successful implementation of change.

This will be positioned in the context of (i) the institutional context of business and the relationships with key stakeholders such as investors, (ii) the relationship between accounting and finance and other management functions, and the need to relate the application of accounting methods of control to organisational culture especially in an international context.

The module will review and evaluate a number of adaptations and extensions of conventional management accounting practice which have been proposed as ways of helping businesses to respond to the challenge of sustainability including the design and use of relevant non-financial performance indicators.

1. The technique of analysing costs through a range of alternative and complementary criteria, and the principle of ‘different costs for different purposes’
2. marginal costing and its appropriate application including break-even analysis and contribution analysis, recognising assumptions and limitations
3. full costing and its appropriate application, recognising assumptions and limitations
4. activity-based costing and its appropriate application, recognising assumptions and limitations
5. relevant costing and its appropriate application to support long-term strategic decisions which can imply significant change for the organisation
6. the integration with cost analyses of other factors decision-relevant considerations particularly in an international context
7. techniques of budgeting and business planning
8. techniques of budgetary control through variance analysis
9. differing approaches to managing budgeting and budgetary control in the context of a particular organisation’s culture and management style
10. alternative approaches to management control, particularly results-based, and the need to integrate this with other aspects of management and the organisational culture of the firm, particularly in an international context
11. alternative ways of identifying, measuring and reporting ‘environment-related’ costs in order to support management decisions on sustainability-related issues.
12. the use of non-financial performance indicators to supplement conventional monetary measures such as through a balanced scorecard mechanism, taking sustainability-related performance indicators as an illustrative example.

On successful completion of the module the students should be able to:

1. distinguish between costs on the basis of alternative criteria such as direct/indirect, fixed/variable(marginal), and relevant/irrelevant, and apply these as appropriate to support management decisions
2. explain, and apply appropriately in decision-making, concepts such as opportunity costs and sunk costs;
3. critically evaluate the potential relevance and limitations of financial information to support strategic decision-making
4. explain different approaches to management control and how these relate to an organisation’s culture and the need for a diversity both between different organisations and internationally
5. prepare a budget from a set of initial data such as sales forecasts and cost standards
6. calculate variances between actual and budgeted performance and recommend how these might be used as part of the process of management control
7. assess an organisation’s processes of budget-setting and budgetary control as elements within its overall management control system;
8. explain and evaluate alternative approaches to environmental costing
9. design and evaluate relevant non-financial performance indicators as a means of measuring an organisation’s sustainability-related performance

Approximately:
20 hours class contact time
80 hours of independent study

The Library Catalogue contains full details of the current reading list for this module. Further details may also be found in the Module Guide.