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STRATEGIC MANAGEMENT ACCOUNTING

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STRATEGIC MANAGEMENT ACCOUNTING
REPORT TO BOARD OF DIRECTORS OF JESSUP LIMITED.
As Jessup Limited is fast growing into a large company, it will face intensive competition and I, as your consultant management accountant will like to enlighten you on the importance of a strategic management accountant in an organisation such as this.
While Jessup limited is doing well, our operations have reached a stage where we need to better manage our accounting function. As you are unsure of the benefits of a strategic management accountant, I will be presenting a report to the board of directors to:
a) Explain the key roles of a strategic management accountant in an advertising and public relations organisation such as Jessup limited.
b) Enlighten you on relevant and irrelevant costs and revenues, to ascertain which costs are most relevant in strategic management accounting and how this cost affects decision making.
c) Inform you on the merits and limitations of introducing activity based costing into Jessup limited.
Jessup Limited as an Advertizing and Public Relations Company definitely incurs costs and generates revenue as with all business organizations irrespective of their specialization and industry to which they belong.
KEY ROLES OF A STRATEGIC MANGEMENT ACCOUNTANT.
Strategic management accounting goes beyond the predefined and regimented functions of recording and organizing business activities and data and producing financial information. It entails all activities of a management nature, particularly identification, retrieval (as part of planning), organization and control of costs and revenue information, manipulated, sorted and presented in proper perspective to form a basis for management decision making process to achieve an organization’s strategic objectives.

Ken Simmonds (1981) defines strategic management accounting as “a form of management accounting in which emphasis is placed on information which relates to factors external to the firm, as well as non financial information and



Bibliography: • Adam Roger. (1999). Performance Indicators for Sustainable Development. Accounting and Business Journal. p16-19 • Ansari S.J., Bell, T.Klammer and C. Lawrence. (1997).Management Accounting: A Strategic Focus.. 3rd ed. Boston: Houghton Mifflin. p38- 42. • Bromwich. M, Bimahi A. I. (1994). Management Accounting. Pathways to Progress. London • Collin Drury. (2009). Management Accounting for Business. 4th ed. Cengage Learning. London. • Geri N and Ronen B. (2005). Relevance lost: the rise and fall of activity-based costing. Emerald Management Review. 24 (1), p133-144. • K, Simmods (1981). The Fundamentals of Strategic Management Accounting. London. • Mark Lee Inman (1999). Strategic Management Accounting, ACCA workbook • University of Sunderland (2011). Strategic Management Accounting Workbook. Revised Ed. • Wilson R. M. S (1995). Strategic Management Accounting. Issues in Management Accounting. 2nd ed. PHI Englemore Cliff. New Jersey.

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