Management accounting has been the basic toolbox in business administration for decades. Today it is an integral part of all curricula in business education and no student can afford not to be familiar with its basic concepts and instruments. At the same time, business in general, and management accounting in particular, is becoming more and more international. English clearly has evolved as the "lingua franca" of international business. Academics, students as well as practitioners exchange their views and ideas, discuss concepts and communicate with each other in English. This is certainly also true for management accounting and control.
Management Accounting is becoming more and more international. ?Management Accounting and Control? is a new textbook in English covering concepts and instruments of management accounting at an introductory level (primarily at the Bachelor level, but also suited for general management and MBA courses due to a strong focus on practical relevance). This textbook covers all topics that are relevant in management accounting in business organizations that are typically covered in German and Central European Bachelor courses on management accounting and control.
After a general introduction to the field of management accounting and control the book discusses cost management as an extension of cost accounting. Typical cost management instruments such as target costing, life cycle costing and process-based costing approaches are explained in detail. Differences between Anglo-American activity-based costing (ABC) and German process-based costing are highlighted. The book then turns to an extensive discussion of planning and budgeting tasks in management accounting with a strong focus on the practical application of the topic such as developing a budget in practice. Another chapter is dedicated to a comparison of traditional budgeting with modern /alternative budgeting approaches.
A major part of the book is dedicated to the broad area of performance management. The relevance of financial statement information for performance management purposes is discussed in detail. In addition, the most widely spread financial performance indicators are illustrated using real-world examples. The book also includes detailed content on value-based management control concepts. In a consecutive chapter, performance measurement is linked with strategy while extensively discussing the Balanced Scorecard as a key tool in strategic performance management.
The remaining parts of the book deal with management reporting as one of the main operative tasks in management accounting practice. The book closes with insight into new fields and developments that currently influence management accounting practices and research and promise to play an increasingly important role in the future.
Autorentext
Both authors hold chairs and teach at the ESB Business School, Reutlingen University. They have been researching and teaching in the field of management accounting for many years.
Michel Charifzadeh holds a diploma in business administration from the Ludwig-Maximilians University Munich and received his doctoral degree from the EBS Universität für Wirtschaft und Recht, Oestrich-Winkel. He has worked as a project manager in mergers & acquisitions at Siemens AG for several years. As a professor of finance and accounting he was employed at the International University of Bad Honnef-Bonn before he was appointed to the ESB Business School at Reutlingen University in 2011. His teaching and research interests include value based management, performance measurement, company valuation and International Financial Reporting Standards (IFRS).
Andreas Taschner holds a diploma and a doctoral degree from the Wirtschaftsuniversität Wien (Vienna University of Economics and Business). He has more than 10 years of industry experience. He was appointed professor of management accounting at the ESB Business School at Reutlingen University in 2011. His teaching and research interests include comparative management accounting, management reporting, investment appraisal techniques, and supply chain accounting.
Inhalt
Preface xiii
Chapter 1 Introduction to Management Accounting and Control 1
The Concepts of Management, Accounting, and Control 2
A Definition of Management 2
A Definition of Accounting 3
A Definition of Control 4
Bringing it Together: Management Accounting and Management Control 5
Management Accounting 5
Management Control 6
The Role of a Controller in an Organization 9
Skill Set of a Controller 10
The Management Control Function in a Corporation 12
Management Accounting vs. Financial Accounting 14
Financial Accounting 14
Contrasting Management Accounting and Financial Accounting 15
Performance Measurement and Performance Reporting 17
An Example of Performance Reporting 17
Performance Measurement beyond Financials 19
Trends in Management Accounting and Control 20
Ethical Aspects of Management Accounting and Control 23
Chapter 2 Management Reporting 29
Information Needs in Business 30
What is Information? 31
Information Supply vs. Information Demand 32
Management Reporting as a Key Information Tool 34
Scope and Definition of Management Reporting 35
The Management Reporting Process 36
Management Reporting Dimensions 38
What For? Management Reporting Purposes 40
What? Content of Management Reports 42
Inductive Methods 42
Deductive Methods 43
Information Sources 44
How? Preparing and Communicating Management Reports 46
Amount of Information 46
Order and Structure 47
Relationships between Pieces of Information 49
Presentation and Visualization 50
When? Timing Issues in Management Reporting 50
Reporting Cycles 50
Duration of Report Preparation 51
Timeliness and Punctuality 52
Who? Parties Involved in the Management Reporting Process 53
Emerging Trends in Management Reporting 54
Reporting Factories 54
Self-Reporting 55
Cooperative Reporting 56
Chapter 3 Managing Cost 61
Cost Management 62
Cost Accounting vs Cost Management 62
The Focus of Cost Management 63
Cost Management Tools 65
An Overview 65
Problems of Volume-Based Cost Allocation 65
Activity-Based Costing and Process-Based Costing 67
How Activity-Based Costing Works 67
How Process-Based Costing Works 70
Activity-Based Costing and Process-Based Costing a Comparison 71
Process- and Activity-Based Management Control 73
Cost Reduction and Process Efficiency Improvements 74
Pricing and Product Mix 74
Product and Service Design 74
Planning and Budgeting 75
Target Costing 75
Determining the Cost Gap in Target Costing 76
The Target Costing Process 77
Splitting Target Cost into its Sub-Values 79
Target Cost Index and Target Cost Diagram 81
A Critical Reflection: When is Target Costing Appropriate? 82
Life Cycle Costing 83
Cost and Revenue Elements Across the Product Life Cycle 85
Contribution Margin Method of Life Cycle Costing 86
Discounting Method of Life Cycle Costing 88
A Critical Reflection: What Life Cycle Costing Can and Cannot Do 91
Chapter 4 Budgeting 97
Planning in Management Control 98
The Budgeting Cycle 100
Uses of Budgets 101
The Master Budget 102
Preparing an Operating Budget 104
The Revenue Budget 105
The Production Budget 106
The Direct Materials Budget 107
The Direct Labor Budget 108
The Manufacturing Overhead Budget 108