financial planning

Topics: Internal control, Crimean War, British Army Pages: 8 (1670 words) Published: April 27, 2014

Table of Contents
Title Page1
Table of Contents2
Financial versus Managerial Accounting3
Problems in Implementing an Accounting Information System3
Developing an Accounting Information System4

Financial accounting is focused on historical data. It involves the process of recording, summarizing and reporting financial information from a specified period of time in order to determine the financial position and performance of an organization. Financial accounting information is used by investors, creditors, and shareholders. In contrast, management accounting is forward looking. Management accounting reports assist management in the decision-making process by providing information used to plan, evaluate and control company resources. The case study of the care of soldiers in the British Army during the Crimean war is an example of the importance of managerial accounting and the possible implications of mismanagement. FINANCIAL ACCOUNTING

Assists with investment decisions
Assists management to make decisions
Is governed by GAAP principles (USA)
No specific format
Used externally by investors, customers, creditors
Used internally by management
Based on historical data
Based on the present and is forward looking
Well defined reporting period
Reported as needed

Managing a health care system is no small feat. However, when the organization is littered with systemic problems, the job becomes increasing difficult. This was the case of the British Army health care system. The system, “was calamity unparalleled in the history of calamity” according to Miss Nightingale who served as a British nurse during the Crimean War. To begin, three separate departments were responsible for looking after the health of the British Army and the hospitals in which the wounded British soldiers were tended to. The departments included the Commissariat, the Purveyor’s Department and the Medical Department. And while three departments were responsible they were severely understaffed, and what staff they did have for the most part lacked experience and sufficient knowledge to carry out the task at hand. Furthermore, there was no clear division or delegation of task. “The Commissariat were the caterers, bankers, carriers and store-keepers of the army. The bread and meat used in the hospital were supplied by the Commissariat, the Commissariat did not supply food for men too ill to eat their normal rations. At this point the Purveyor stepped in. The Purveyor ‘s contracts were made by the Commissariat, though the Purveyor never dealt directly with the merchant and had no power over him”. (Case study). Though the Commissariat and the Purveyor were given executive power, it was a restricted kind of power. Not only was there confusion in carrying out daily tasks, but the organization was underfunded, lacking critical resources to purchase the supplies needed to care for the wounded soldiers. What little supplies they did have in store were being grossly mismanaged. When supplies were ordered, they were sent for delivery but would go missing and never reach the intended destination. Furthermore, shiploads of produce would be discarded as they had not been authorized by anyone. Lack of effective communication, due to the organizational structure also served as a major problem within the British Army health care system, eventually leading to its ultimate failure. Military organizations are typically considered as top-down and centralized in nature. There are several benefits to this type of organization, including clear delegation of tasks, set policy, precise control, and a sole source of authority which allows for clear communication and direction. While the British Army health care system during the...

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