CA3.5 – Advanced Management Accounting

CA3.5-Advanced Management Accounting

On completion of this module, candidates will reach a competency sufficient to be able to:

• Define the role of the management accountant
• Evaluate the setting of, controlling and managing the performance and risk management in an organisation
• Evaluate how strategic performance measures can support decision making
• Evaluate and select performance measures for an organisation
• Evaluate and select measures that support management of divisions
• Evaluate the resource implications in IT and HR to support effective performance management

Syllabus topics	Weighting (%)	LO
Organisation objectives and performance	10	1 and 2
Performance measures for strategic management	20	3
Performance measures for entity management	20	4
Performance measures for divisional management	20	5
Performance management support using IT and HR resources	20	6 and 7
Issues in modern management accounting	10	8, 9 and 10

Learning outcomes

• LO1: Define role of the strategic management accountant in the nature and context of performance management
• LO2: Explain the ethical problems faced in setting organisational measures for performance
• LO3: Evaluate appropriate performance measures to support strategic decisions
• LO4: Evaluate appropriate performance measures to support entity management decisions
• LO5: Evaluate appropriate performance measures to support divisional management decisions
• LO6: Evaluate information technology support for performance management
• LO7: Evaluate human resources to support performance management
• LO8: Explain modern budgeting methods
• LO9: Explain and apply modern costing techniques
• LO10: Describe current issues in management accounting

1. The role of management accounting in managing organisations: LO1, 2
   1. Explain the role of the modern strategic management accountant
   2. Describe the nature of organisational hierarchy, mission, goals, and objectives
   3. Describe the nature of performance management and control environment and how coordinated actions lead the organisation to achieve mission, goals, and objectives
   4. Evaluate performance control mechanisms to enable optimal performance
   5. Assess the impact of non-quantitative aspect of performance monitoring and control
   6. Explain the ethical context of modern performance management
2. Strategic performance management: LO3
   1. Evaluate a scenario for a given business given its objectives, critical success factors and strategy using techniques such as c analysis, five forces analysis, the Boston Consulting Group model, value chain analysis, Ansoff’s matrix, and other suitable strategic models including information about its strengths weaknesses opportunities and threats suitable performance measures at a strategic level
   2. Evaluate including calculations of suitable performance measures for a business given a scenario including return on capital employed, return on investment, earnings per share, earnings before interest, tax, depreciation and amortisation, residual income, net present value and internal rate of return
   3. Evaluate given a business scenario suitable measures of liquidity, gearing and cash flow for a business entity
   4. Evaluate suitable monitoring and control mechanisms on strategic performance choice
3. Entity performance management: LO4
   1. Calculate suitable financial performance measures for a given business from given data and information evaluating the results based on business objectives and advising upon management action
   2. Calculate suitable non-financial performance measures for a given business from given data and information evaluating the results based on business objectives and advising upon management action
   3. Assess the use of balanced scorecard methods including evaluation of performance from given data and information
   4. Evaluate the use of value for money (VFM) techniques in performance management
   5. Evaluate suitable monitoring and control mechanisms on entity performance choice
   6. Apply stakeholder based measures of performance that may be used to evaluate social or environmental performance of a business
4. Divisional performance management: LO5
   1. Apply suitable bases for setting transfer prices for decision-making and performance measurement based on give information for a given business evaluating the results and advising upon management action
   2. Apply suitable divisional performance measures for a given business using return on investment , residual income and economic value added approaches evaluating the results and advising upon management action
   3. Evaluate suitable monitoring and control mechanisms on divisional performance choice
5. Performance management support: LO6, 7
   1. Advise management on suitable information technology and information systems support that may enable them to operate effective operational and strategic performance management systems
   2. Advise management on suitable approaches that may be used to manage people and change when implementing performance management systems
6. Issues in Modern Management Accounting: LO8, 9, 10
   1. Explain the concepts of Beyond Budgeting and Adaptive Management Processes
   2. Explain and apply modern cost accounting techniques, paying attention to Just in time, Kaizen costing, value chain analysis, and process re-engineering
   3. Describe current developments in modern management accounting practice