Faculty of Business: Accounting
Credit points: 6 cp

Subject level: Undergraduate

Result Type: Grade and marks

Requisite(s): 22321 Cost Management Systems
These requisites may not apply to students in certain courses.
There are also course requisites for this subject. See access conditions.

Handbook description

This subject introduces the use of management accounting information to support managerial decisions and control various aspects of an organisation. It emphasises decision and control issues in a contemporary environment and introduces appropriate decision and control concepts, techniques and skills such as short- and long-term operational decisions, target costing and life-cycle costing, inventory management and just-in-time, responsibility accounting systems, transfer pricing, performance evaluation systems, and the behavioural impacts of management control systems. It also emphasises the ways in which accounting information can be used to understand and make decisions about the operational and strategic management of an organisation, and to control the implementation and ongoing management of such decisions.

Subject objectives/outcomes

On successful completion of this subject students should be able to:

1. Understand, apply and critique the application of a range of different decision models used to enable managers to solve problems, control and evaluate performance within an organisational context.
2. Within the social context of an organisation, evaluate the impact of different decisions, control systems and performance evaluation methods. Further develop a capacity for independent research and learning.
3. Develop communication and teamwork skills.
4. Develop their information technology and accounting application skills.

Contribution to graduate profile

This subject builds upon the core knowledge developed in 22321/0 Cost Management Systems. It provides an extension of management accounting to areas of decision support and managerial control. The subject focuses on the use of accounting information in facilitating (Management Decisions) and influencing (Management Control) managerial decisions in organisations. Managers decision-facilitating role include the responsibility and authority for making decisions with respect to the acquisition and use of an organisation's resources. To do this effectively they must identify the actions (or strategies) available to them, predict the relevant consequences of those actions, and then choose the action that has the most preferred predicted outcome. Whilst managers have the responsibility and authority for making decisions within organisations, they may not do so in the best interest of the organisation. Manager's decision-influencing role emphasis the importance of using management accounting tools effectively to achieve a desired set of managerial decisions and actions that are aligned with the organisational strategies. An understanding of the behavioural impact of accounting systems on managerial behaviour is therefore important in the design of an effective management control systems. In addition to providing students with a useful set of concepts, skills and techniques, the subject requires students to develop analytical and evaluative skills.

Teaching and learning strategies

The material in this subject will be presented in lectures and seminars. Class contact will be 1-hour lecture and 2-hour seminar/workshop. The focus of the learning process will be the seminars where students will be exposed to the fundamental conceptual and technical material through a combination of practical exercises, case studies, debates and discussion. The seminars will be supported by the lectures where theoretical material and illustrations of development in practice will be covered. Students will also take part in independent group project work to explore selected topics in greater depth.

In addition, students will be required to demonstrate a proficiency in the use and application of information technology for the preparation and analysis of management accounting information.

Content

• Introduction to Management Control Systems
• The Decision Process; Relevant Information, Pricing and Product Mix Decisions
• Budgeting and Human Behaviour
• Organisational Control Systems and Transfer Pricing
• Performance Evaluation – Traditional versus Conventional Management Techniques
• Incentives and Compensation.

Assessment

Mid-Semester Examination (Individual)	20%
This addresses objectives 1-2.
Research Report (Group)	30%
This addresses objectives 1–4.
Formal Final Examination (Individual)	50%
This addresses objectives 1–2.

Students will be required to achieve a pass in the overall marks to satisfy the requirements of the subject. Students will also need to receive at least 40% of the examination component of the subject in order to pass the subject.

Both the mid-semester and the formal final examination will be conducted under University examination conditions. The research report requires students to explore new techniques/methods/alternatives available to organisations and its applicability to a range of companies. This requires students to research recent academic and professional journals. The set-up of the research report requiring students to examine recent information, combined with a strategy of changing the topic every semester minimise, if not eliminate students from copying the intellectual property of others.

Recommended text(s)

Langfield-Smith, K., Thorne, H., and Hilton, R. W., (2003), Management Accounting – An Australian Perspective, McGraw-Hill.

Kaplan, R. S. and Atkinson, A. A., (1998), Advanced Management Accounting, Upper Saddle River, N. J., Prentice-Hall International.

Indicative references

Ashton, D., Hopper, T., and Scapens, R., (1995), Issues in Management Accounting, (2nd Edition) London: Prentice-Hall. (685.1511ASHT)

Kaplan, R.S. and Norton, D.P, (1996), The Balanced Scorecard, Harvard Business Press (658.4012KAPL).

Macintosh, N.B., (1994), Management Accounting and Control Systems: An Organizational and Behavioural Approach, Wiley. (658.1511MACI)

Merchant, K (1997), Modern Management Control Systems, Prentice-Hall.

Simons, R., (1995), Levers of Control: How Managers Use Innovative Control Systems to Drive Strategic Renewal, Harvard School Press. (658.4120SIMO)