Based on the results of diagnostics of management accounting and reporting systems of three domestic enterprises, the most characteristic shortcomings of existing management accounting systems were identified, limiting the ability to make balanced management decisions by managers at various levels. Below are also recommendations for improving the management reporting system and optimizing the information base that provides it.
The following areas for improving the management accounting and reporting system were selected as priorities:
1. Improving the structure, hierarchy, content and presentation of management reports;
2. Development of a financial planning and budgeting system;
3. Development of a company development strategy with subsequent linking of short-, medium- and long-term planning horizons;
4. Improvement of the cost accounting system.
Based on the results of an analysis of a wide range of educational and methodological literature, publications and research, some shortcomings of management accounting and reporting systems characteristic of Russian enterprises were identified.
The current system of reports, certificates and reports currently operating at Russian enterprises is, as a rule, extremely fragmentary and does not meet the requirements for information support for production management in current conditions (completeness of information, its comparability, efficiency, accuracy, brevity, expediency, etc. .);
There are a number of specific forms of analytical reports missing;
There is no hierarchy of report forms for different management levels. There are no detailed regulations on the frequency of compiling analytical reports for various users.
Designing an optimal hierarchy of reports and adapting them to the needs of managers at various levels. IN table 2 An approximate reporting model for a management accounting system at an enterprise is presented.
Development of a long-term (5 - 10 years) and medium-term (3 - 5 years) planning system based on an assessment of the competitiveness of the enterprise in the domestic and global markets. Linking long-term, medium-term and current planning;
Optimization of the budgeting system;
Improving the cost accounting system and the regulatory framework for calculating their planned level.
Within the first direction - improving the management reporting system, defining the hierarchy of reports and adapting them to the needs of managers at various levels - the following activities seem to be the most significant:
Analysis of the current management reporting system, its composition, structure and functions, as well as organizational and technical aspects of its functioning;
Assessing the level of automation of information flows and decision-making processes and, if necessary, bringing them into compliance with the requirements of the management accounting reporting system.
Table 2. Approximate reporting model of a management accounting system.
|
Material flows / activities |
“Purchasing” and distribution of material resources |
"Production" (expenses) |
"Sales" (implementation) |
|
Operating activities |
Assessment of the need for material resources |
Sales and Marketing Cost Report |
|
|
Report on the consumption of material resources |
Product release report |
||
|
Inventory report resources |
Finished goods inventory report |
Sales report |
|
|
Report on the purchase of material resources |
Manufacturing Cost Reports |
Shipping report |
|
|
Investment activities |
Report on the purchase and movement of fixed assets |
Investment Performance Report |
Report on work with securities |
|
Financial activities |
Control and regulation of financial results |
Reports on the results of core activities |
|
|
Control and regulation of accounts receivable |
Accounts payable reports |
||
|
Control of receipt and use of funds |
Accounts receivable report |
||
|
Monitoring the implementation of the profit distribution plan |
Cash flow statement |
||
|
Summary reports for management |
|||
Organizational structure of the enterprise and management accounting reporting system
The management accounting system is superimposed on the existing organizational structure of the enterprise. Therefore, the effectiveness of this system largely depends on the efficiency of the enterprise organization. Quite often, the improvement of the management accounting system (especially involving the introduction of expensive hardware and software) must be accompanied, and possibly follow, changes in the organizational structure of the enterprise, since it is impractical and ineffective to impose modern management accounting methods, much less computerize them in conditions of ineffective organizational enterprise structure.
As practice shows, the organizational structures of the vast majority of enterprises are linear-functional.
Linear-functional stage of the evolution of the organizational structure ( figure 3) is characterized by a deepening of the process of specialization, expansion and creation of new divisions and services. This organizational model assumes that functional managers manage only their departments. Personnel management is carried out through their superiors, through the issuance of orders and other internal regulations. At the same time, managers of line departments have the right to approve and protest functional change projects. This leads to improved interaction between functional and line services.
With the further growth of the enterprise, the activity of functional departments increases, as does the pressure on employees to comply with many new requirements objectively put forward by specialized subsystems. Departments develop internal regulatory documents that introduce additional conditions and restrictions related to the quality of labor, products, etc. At the same time, the problem of clearer coordination of many conditions and parameters formulated by functional units comes to the fore.
The linear-functional structure provides advantages for working in stable conditions, which involve the gradual establishment of connections between functional and main departments. If the situation changes quickly and requires a permanent revision of controlled indicators and restrictions, it is difficult to achieve coordinated work of all services, especially when this happens in conditions of growth of the organization. The deeper the specialization and the more functional subsystems, the higher requirements for consistency in their work to achieve an integrated result.
Figure 3. Linear-functional organizational structure
The organizational structures of a wide range of Russian enterprises are characterized by the following features and disadvantages ( table 3).
Table 3. Advantages and disadvantages of the main types of organizational structures.
|
Characteristics/types of organizational structures |
A team of like-minded people |
Linear |
Functional |
Linear-functional |
Centralized linear-functional |
Matrix |
|
Advantages |
(1) Creative collaboration; (2) Consistency; (3) Like-mindedness. |
(1) Responsibility for the final result; (2) Unity of command. |
(1) Uniform distribution of load between managers; (2) specialization; (3) increased attention to quality. |
(1) Greater coordination between functional and line managers; (2) Greater development of functional specialization; (3) Increased influence on the quality of work and products. |
(1) Separation of administrative, functional and operational management; (2) Possibilities for coordinating activities in terms of time and other resources; (3) Increased orderliness and organization. |
(1) A combination of administrative, functional, operational management with the positive qualities of a team of like-minded people in breakthrough design work. |
|
Flaws |
(1) Applicable to enthusiasts and decent people; (2) Team of no more than 10 people. |
(1) Long information channels; (2) Weak specialization and low focus on quality. |
(1) Many superiors for the final performer; (2) poor coordination of control “centers”. |
(1) A large number of controlled parameters and conditions; (2) Difficulties in coordinating activities in terms of time and content. |
(1) Strong regulation; (2) Insufficient use of creative potential. |
(1) High costs of maintaining the system in equilibrium; (2) Requires extensive management team experience. |
Based on the signs of subordination and functional specialization, as a rule, the following levels of the organizational structure of company management are present:
First level. General Director, Deputy General Director for Financial Affairs, Deputy General Director for Strategic Development and Shareholding, Deputy General Director for Commercial Activities, Deputy General Director for Production, Deputy General Director for Capital Construction, Deputy General Director for Foreign Economic Relations, Chief Engineer, Chief Accountant.
Second level. Heads of departments - Head of the Materials and Technical Supply Department (UMTS), Head of the Personnel Department, Head of the Work Supply Department (WRS), Chief Power Engineer, Chief Mechanic, Quality Director, Head of the Department of Communal and Social Facilities, Chief Metrologist, Deputy. chief engineer for reconstruction and technical re-equipment.
Third level. Heads of departments.
Fourth level. Deputy heads of departments, services and line specialists.
This number of levels indicates a fairly normal hierarchical structure. In the most flexible organizational structures, the number of management levels ranges from three to five. The effective functioning of such structures depends on the availability of proven management procedures, the completeness of the internal regulatory framework, and the comprehensive use of management functions.
At the same time, at a number of enterprises the regulatory framework, primarily the regulations on departments and services, is often characterized by incompleteness. There are no regulations on the activities of some structures; in some cases, there is a certain discrepancy between the regulations and the tasks and management mechanisms of today. In addition, at present, Russian enterprises are undergoing changes in the structure and mechanisms of management, including: the emergence of strategic planning, the creation of a corresponding new block for managing strategic development and shareholder ownership, reforming planning based on its reorientation to sales planning, and optimizing the budgeting system. The new planning system at most enterprises is at the stage of formation, so the functions of the departments, especially the Economic Department as central in the management accounting system, have not yet been precisely defined.
In the organizational structure of most Russian enterprises there is excessive concentration of management functions at the senior level— General Director and his staff. Very often, 10 or more deputies (including the chief accountant and assistant to the general director) report to the General Director. At one of the largest domestic metallurgical enterprises, about 100 divisions and services were formally assigned directly to the General Director, which he, naturally, could not fully control, concentrating his attention on key services. Imposing a management accounting and reporting system on such a structure makes no sense.
Therefore, the introduction of modern management reporting systems at most enterprises should be preceded by a structural reorganization, the most rational direction of which, in our opinion, is the transition to a divisional management structure. At the same time, with the much greater efficiency of such structures, the transition to them may be accompanied by objective difficulties caused not only by purely technical reasons, but also by the existing balance of interests in the enterprise as a whole and its top management.
Overload of management functions is often observed at the level of Deputy General Directors. In particular, at one of the large enterprises, the deputy general director for commercial activities had 6 blocks consisting of 9 departments.
The lack of consolidated management reporting also attracts attention, which, in our opinion, is partly explained by both the shortcomings of the management accounting system itself and the imperfections of the organizational structures of enterprises. It's possible that this is one of them significant reasons for which most management decisions are made at the highest level of enterprise management - the level of the General Director and, in some cases, the commercial director.
The development of a management accounting system, accompanied by an improvement in the organizational structure, could provide the necessary information support for making responsible management decisions at a lower management level and facilitate the delegation of corresponding responsibility from the top to the middle level of management.
Another characteristic shortcoming of the organizational structures of Russian enterprises is partial duplication of functions by several departments.
For example, at one of the enterprises such duplication was observed in terms of accounting and control of expenses and revenues, operational assessment and control of the production of finished products, inventories of raw materials and materials, work in progress. Due to the significant share of offsets in the structure of payments of this enterprise and the shortage of funds, the functions of the Contracts and Sales Department and the Materials and Technical Supply Department are duplicated (for example, in terms of monitoring the shipment of products under offsets).
In addition, the information transmission channels used at a number of enterprises do not always ensure its reliability and efficiency. This leads to duplication of channels and sources of information. When analyzing the information received, managers do not always use a standard data presentation format and regulated analytical procedures; the methods used to analyze information do not always meet the needs of its users.
Thus, to the typical shortcomings of existing organizational management structures Russian enterprises include:
High level of concentration of management decision-making at the level of the general director and some of his deputies, often the commercial director;
Weak delegation of responsibility from senior managers to the middle level of management;
Unreasonable dispersion of a number of management functions for planning and control across services, departments and individual structural units;
Duplication of functions by several departments.
A properly conducted internal audit of the management accounting system will allow timely detection and identification of various types of risks, including in the field of management (for example, systematic errors and abuse of personnel), as well as the development of measures to prevent their occurrence.
The implementation of procedures within the framework of the internal audit of the management accounting system contributes to and is aimed at creating additional prerequisites for increasing the efficiency of the enterprise management system at all levels in particular and the enterprise as a whole.
Internal audit of the management accounting system at the enterprise
As you know, there are a large number of types of audits. Thus, when using the classification “for its intended purpose,” management audit is also distinguished (Table 4).
Table 4. Main types of audit.
To clarify the essence of the terms used and their content, I would like to emphasize that when using the concept of “production audit”, we rather narrow the scope of the audit of the management system. This is due to the fact that with this approach to assessing the effectiveness of the management audit, we narrow down only to the cost part, which, of course, has priority over other components of the management audit, but is by no means the only important one. So, when we use the term “management audit of management systems” the following components are added to the “production audit”: (1) the organizational system of the company, (2) personnel and staffing, (3) analysis and assessment of individual business processes of the enterprise, identified according to which -criterion, (4) issues of automation of economic and business processes in the company, (5) system of regulatory and reference information, (6) document flow diagram, (7) management accounting reporting.
Figure 4. Correlation of different types of audit from the point of view of internal audit of the effectiveness of the management system.
Thus, the term “management audit of the management system” is broader than the “production audit of the management system”, at least by the seven elements of the management system listed above.
The main stages of organizing control activities of the internal audit of the management accounting system at the enterprise are presented in Figure 5.
Conducting an internal audit of the management accounting system has informational and consulting significance for the management and (or) owners of an economic entity, since it is intended to help optimize the activities of the economic entity and fulfill the responsibilities of its management.
Figure 5. The main stages of organizing control activities of the internal audit of the management accounting system at the enterprise.
Internal audit provides information on these activities and confirms the accuracy of managers' reports. An internal audit of the management accounting system is necessary mainly to prevent the loss of resources and implement the necessary changes within the enterprise. In light of the above, it should be noted that the internal audit of the management accounting system and, in particular, the assessment of the effectiveness of the management accounting system is an important internal audit tool.
The main objects of internal audit of the management accounting system are the solution of individual functional management problems, development and testing of enterprise information systems. The objects of internal audit may be different depending on the characteristics of the economic entity and the requirements of its management and (or) owners. Internal audit— an integral part of the enterprise’s internal control.
When conducting an internal audit of a management accounting system, its content changes depending on the stage of management subject to control. Thus, at the planning stage, the volume of available resources is assessed, the degree of its compliance with the volume of set goals and tasks to be solved, and it is determined to what extent the set goals and tasks correspond to the overall strategy established in each specific area of enterprise management.
In the process of budget execution, ongoing monitoring is carried out in all areas of the management system, the reliability and objectivity of the data is determined, and intermediate results are assessed. The main task at this stage is to ensure the necessary and timely adjustment of the management process, while simultaneously ensuring control over the progress of these actions.
In addition, issues related to the organization of the accounting and internal control system, the creation of the necessary organizational structures and the development of appropriate procedures are subject to control. And finally, the subsequent internal audit of the management accounting system assesses the degree of implementation of the set goals and the possibility of more effectively achieving them in the future.
As a rule, to internal audit functions relate:
Checking the activities of various management levels;
Assessing the effectiveness of the internal control mechanism;
Development and provision of proposals to eliminate identified deficiencies and recommendations to improve management efficiency.
An internal audit of a management accounting system can be considered effective if, firstly, it effectively warns about the occurrence of unreliable management accounting information, and secondly, it effectively identifies unreliability within a limited time after the unreliable information has arisen.
The report obtained as a result of the audit is a final document that should contain not only the identified deficiencies and violations, but also , which in the future may become the basis for the formation of general recommendations in the field of management accounting. This is due to the fact that it is the reports on control activities that are subject to the most careful study by management and management at various levels.
Figure 6. The procedure for drawing up the conclusion of the internal audit of the management accounting system at the enterprise.
After approval of the report and, accordingly, all the recommendations contained in it, the internal audit service must ensure that checks are carried out on their implementation and, based on all the work done over a certain period, evaluate the volume of work performed and their effectiveness.
The subject of internal audit of the management accounting system are issues of assessing the effectiveness of the management accounting system at the enterprise; certain issues of making management decisions and managing funds, namely:
Areas of activity and functions of “responsibility centers”;
Budget funds allocated to solve assigned tasks by the management of the enterprise;
Selected critical issues of financial resource management;
Organization of budget execution.
Using the results of an internal audit of the management accounting system to develop management decisions throughout the enterprise is effective only on the condition that control measures cover all of the above management issues. However, the extent of their coverage should be determined by the specific objectives set by management. Speaking about the audit methodology of the internal audit of the management accounting system, it is important to clearly define what in this case plays the role of audit objects.
Objects of audit of the effectiveness of the management accounting system are:
Management accounting system at the enterprise;
Management system and organizational structure;
Document flow diagram;
The procedure and principles for the formation of management reporting;
Management activities;
Departments of the enterprise that are the main managers of budgets;
Departments of an enterprise that use borrowed funds or manage the property of the enterprise.
In this case, the subject of inspection is understood as the activity of the specified economic entities, which is divided into functional (functions and tasks) and production activities, respectively, in the first case it is assumed that a certain result will be achieved, and in the second - an economic result, expressed in the production of specific goods, services, etc. . Evaluation of these results involves comparing them with established performance assessment criteria, which are determined taking into account the goals of the control measure. This ultimately makes it possible to determine the effectiveness of management decision-making and funds management.
An internal audit of a management accounting system involves conducting various types of audits, which differ depending on the subject and objects of the audit, the set goals and objectives. The entire range of checks within the framework of the internal audit of the management accounting system can be divided into two main blocks:
— First block includes control measures to assess the effectiveness of the management accounting system related to the performance of functions.
— Second block— this is monitoring the efficiency of enterprise management.
The internal auditor carries out procedures ( table 5 - pp. 1.2, 1.3, 2.1, 2.1.2 and 2.2.) for evaluating and completing audit documents.
In some cases, the assessment can be carried out by direct users of management accounting information (Table 5, clause 1.1). If there are several users, then it makes sense to resort to measurement information user satisfaction index.
Table 5. System for assessing the effectiveness of the management accounting system at the enterprise.
|
Components of the evaluation system |
Result |
||
|
Monitoring |
Creation of an information field on the functioning of the management system as a source for analysis on necessary issues. |
Determining the strengths and weaknesses of the existing management system, drawing up recommendations for correcting shortcomings and errors, and optimizing the management system. |
|
|
Components of Monitoring |
|||
|
Quality of information |
Determining whether the information provided by the management system meets the required quality parameters. |
Forming an opinion and concluding whether the information provided by the management system meets the required quality characteristics. |
|
|
Test for the composition of control system elements and their interaction. |
Determination of the presence of the main elements of the management system and the quality of their interaction and consistency. |
Forming an opinion and making a conclusion about whether the existing elements of the management system meet the needs of the enterprise and assessing the quality of their interaction. |
|
|
Optimality of the organizational structure and the selected management system. |
Determining the optimality of the organizational system and the feasibility of the selected management system option. |
Forming an opinion and making a conclusion about whether the existing organizational system of the enterprise is optimal and assessing the feasibility of the chosen management system option. |
|
|
Autonomy of the management system from financial accounting. |
Determine whether the management system is monistic or autonomous. |
Forming an opinion on the nature of the independence of the management system from financial accounting. Determining the positive and negative aspects. |
|
|
Whether or not the management system satisfies the requirements of the modern level of production development and increasing competition. |
Determining the degree of compatibility of the current management system with modern requirements of the level of production development and competition. |
Forming an opinion on the degree of compatibility of the control system and the requirements imposed by modern requirements of the level of production development and competition. |
|
|
Does the management system pay due attention to the surrounding business environment in which the enterprise operates? |
Implementation of Benchmarking activities. |
Forming an opinion on whether the adopted management system pays the necessary attention to the surrounding business environment in which the enterprise operates. |
|
|
Determination of effectiveness |
|||
|
Regulatory efficiency |
Determination of the degree of implementation and compliance assigned to the management accounting system in the “Accounting Policy”, tasks and functions of management accounting at the enterprise. | ||
|
Strategic plan for the development of the management system |
Determining the degree of development and implementation of the strategic development plan for the management system. |
Determining the percentage of efficiency by comparing the set (planned) and achieved actual results. |
|
|
Relative efficiency |
Determination of the ratio of benefits and costs for the functioning of the management system. |
Determining the percentage of participation of the management system in the generated profit of the enterprise. |
|
Methods of internal audit of the effectiveness of the management accounting system
In practice, conducting an internal audit of the effectiveness of a management system involves the use of certain methods, which, due to the analytical audit of efficiency, differ significantly from the methods used in financial audits and significantly overlap with the methods used in conducting comprehensive economic analysis.
Internal performance audit method- this is a certain set of techniques that allows you to assess the state of the objects under study from the point of view of the effectiveness of the management carried out. It should be noted that the specifics of the audit presuppose the use of a combination of different methods during the audit, which relative to each other can act as multi-level methods. For example, the examination method may require the use of a graphical method, an analogy method, etc. In turn, the analogy method is an independent method of performance audit.
All methods used in auditing the effectiveness of a management system can be divided into two main blocks: examination methods And analytical methods (Figure 7).
Figure 7. Classification of methods used in internal audit of the effectiveness of the management accounting system
(Click on the picture to enlarge it)
The analytical nature of the audit of the effectiveness of the management system predetermined the key place of analytical techniques in the system of methods used in the audit of the effectiveness of the management system management system.
For example, to the number analytical methods of internal performance audit This includes, among other things, the method of analogy.
The application of the analogy method can be carried out by constructing certain analytical tables. An example of these tables would be Table 6(subject to ensuring the same quality of relevant products, works, services):
Table 6. Application of the analogy method
An important point when developing a performance audit methodology is to determine systems of criteria and performance assessment indicators. It would be rational to begin implementing an audit of the effectiveness of management systems primarily in those areas of management where it is already possible to determine target performance indicators (for example, investment activities), or where generally accepted procedures already exist.
Criteria and indicators for assessing the effectiveness of the management accounting system are the basis for the formation of conclusions and conclusions based on the results of the control event. At their core, these criteria represent established and justified management quality standards that allow for comparative analysis and assessment of the effectiveness of program implementation, activities, economic transactions or the performance of functions by the objects of inspection, that is, the results achieved.
In practice, conducting an internal performance audit involves the development of certain analytical tables (Table 7), which should reflect the standard level of individual indicators, the actual level, the size of the deviation, and the reason for the deviation.
Instead of a standard indicator, data on other similar objects of control, or the level of the specified indicator for a given object for previous periods, etc. can also be used.
Table 7. Analytical table for conducting an internal audit of the effectiveness of the management system
Criteria and performance indicators act as a “normative model”, that is, they reflect what result in the area being inspected or the activity of the object being inspected is evidence sufficient efficiency enterprise management accounting systems. If the actual indicators of the audited area of management accounting correspond to the established criteria and indicators, the management system corresponds to the established level of efficiency. The definition of these indicators should not be established at a specific level, it should be a certain range.
In order to systematize the accumulated experience, it is advisable to propose that all indicators used when conducting an internal audit of the management accounting system be classified according to a number of characteristics (Table 8).
Table 8. Classification of indicators used when conducting an internal audit of the management accounting system.
|
Classification sign |
Types of indicators |
|
By time |
Perspective / Annual / Current |
|
By nature of distribution |
General economic / Industry / Regional |
|
By degree of detail |
Specified / Summary |
|
By scale of application |
Group / Private |
|
By development methods |
Calculation and analytical / Experienced / Reporting and statistical |
|
By the nature of the tasks being solved |
Economic / Industrial / Functional |
|
By calculation method |
Absolute / Relative |
|
According to the obtained characteristics |
Qualitative/quantitative |
|
According to the used meters |
Labor / Cost Conditional-natural / Full-value |
|
By time period |
Statistical / Dynamic |
When choosing performance evaluation criteria In our opinion, it is necessary to proceed from the fact that the selected criteria must correspond to the specifics of the area being inspected or the activity of the object of inspection and serve as the basis for obtaining the results of the inspection. Moreover, for each purpose of this inspection, its own criteria are used to assess the effectiveness of the performance results of the objects being inspected, which must be reliable, understandable and sufficient.
Unlike an audit, the priority goal of which is only to identify facts of abuse and violations, as well as to identify those responsible, the main result of an internal audit of the effectiveness of the management system is the preparation and communication to management of a list of recommendations to improve the efficiency of the company.
The purpose of preparing recommendations is the need to eliminate identified violations. At the same time, they must be clearly justified by previously formed findings and conclusions in order to exclude the possibility of their contestation or ambiguous interpretation by the party being inspected, which may negatively affect the effectiveness of the control itself. The recommendations generated must be precisely focused on the adoption of specific measures and be targeted, that is, sent to officials directly responsible for making specific management decisions.
Another important condition when developing recommendations is that the possible results from their implementation must exceed the amount of resources required for this, otherwise they lose their meaning, reducing the efficiency of management activities. When forming recommendations, it is necessary to determine indicators for assessing their implementation, which would make it possible to objectively monitor this process. At the same time, they themselves must be aimed at achieving specific measurable results.
After drawing up the conclusions and results of the inspection, the inspection team carrying out the control activity must inform the management of the inspected facility about its results, finding out their opinion and listening to any suggestions that have arisen.
The report is a final document that should contain not only the identified shortcomings and violations, but also positive results of the activity of the control object, which in the future may become the basis for the formation of general recommendations in the field of management accounting. This is due to the fact that it is the reports on control activities that are subject to the most careful study by management and management at various levels. At the same time, we also focus on internal control bodies.
After approval of the report and, accordingly, all the recommendations contained in it, the control body must ensure that checks are carried out on their implementation and, based on all the work done over a certain period, assess the volume of work performed and their effectiveness.
Improving the internal audit of the company’s management accounting system
Studying methodological audit, some scientists project it onto business planning in organizations, in particular, V.V. Burtsev defined the range of tasks of management audit in relation to business planning by segment (enterprise, product, sales market, marketing plan, production plan, organizational and legal plan).
At the same time, it is necessary to expand the scope of application of management audit, extending it to the accounting and analytical subsystem, personnel management (managerial audit of personnel) and other elements of the organization. This approach is associated with the need to fully cover all elements of the organization with management audit methods, since the omission of one of their elements will not allow the formation of a holistic picture of the financial situation of the organization and will make it difficult to make effective decisions. Currently, original methods have been developed for some of the listed objects of management audit, including the methodology for management audit of personnel.
While recognizing the novelty and effectiveness of these techniques, it is worth pointing out the fragmented nature of the research. This indicates the formation of management audit and the search for optimal ways of its development.
The effective functioning of an organization is predetermined by the optimization of its structure and the activities of segments, which in turn requires the improvement of the accounting and analytical subsystem, the system of internal control, etc.
In this context, improving management auditing occupies a special place. Specifics of management audit as a relatively new branch of economic knowledge in Russia and its versatility require the use of non-traditional tools. These include diagnostics and system decomposition.
The implementation of the goals and objectives of management audit, its improvement through the use of diagnostics allows for a system-problem approach and a logical-critical analysis of management subsystems (sales, supply, pricing, etc.). Identification of the features and development trends of each subsystem determines the identification of global problems in the development of the organization as a whole and the construction of a clear “financial picture” of the economic entity. Diagnostics can be used in the context of checking the effectiveness of the functioning of sections of the accounting and analytical subsystem and the internal control system.
It is advisable to use system decomposition in parallel with its diagnostics, which will provide an integrated approach to solving management audit problems.
Summarizing the above, we can characterize the diagnosis and decomposition of the management system within the framework of a management audit as powerful and effective tools for studying the economic and other problems of an organization.
Naturally, auditors in practice can use many other methods and methods for studying the management system, in particular methods of econometrics, economic statistics, etc. However, these methods are largely labor-intensive and difficult to understand for specialists who are superficially familiar with financial mathematics and mathematical disciplines.
Therefore, when developing programs to improve the performance audit of management systems management systems a compromise between general scientific, special methods, methods of mathematics and its derivative disciplines will be reasonable.
Summarizing the above, it can be noted that in order to ensure at the present stage the possibility for the control bodies of an enterprise to carry out inspections as part of the internal audit of the management accounting system, it is necessary to concentrate the main efforts on solving the most important tasks of forming an appropriate methodological base that establishes the basic procedures and algorithms for carrying out control measures for internal audit of the management accounting system.
Bibliography
1) Bereznoy A. Practical experience of Russian organizations in maintaining and organizing a management accounting system. Role in strategic and current management of enterprises. — KPMG company research, Report, Moscow, Balchug, 2001.
2) Vilensky P.L., Livshits V.N. and Smolyak S.A. Evaluating the effectiveness of investment projects. — Delo, 2001.
3) Volkov I.M., Gracheva M.V. Project analysis: financial aspect. 2nd ed., revised. and additional - Faculty of Economics, TEIS, 2000.
4) Drury K. Introduction to management and production accounting. - UNITY, 1998.
5) Nikolaeva O.E., Alekseeva O.V. Strategic management accounting. — Editorial URSS, 2003.
6) Nikolaeva O.E., Shishkova T.V. Management Accounting. - URSS, 4th edition, 2003.
7) Khan D. Planning and control: the concept of controlling. Ed. and with a foreword: Turchak A.L., Golovako A.G., Lukashevich M.L. - Finance and Statistics, 1997.
8) Horngren C.T., Foster J. Accounting: management aspect - Finance and Statistics, 2000.
9) Chernov V. A. Management accounting and analysis of commercial activities - Finance and Statistics, 2001.
10) Sheremet A.D. (ed.) Management accounting. Tutorial. - FBK-Press, 2002.
11) Collection of abstracts of the 4th annual conference “The role of the analyst in company management”, Moscow, June 2003.
12) Management accounting: official CIMA terminology - FBK-Press, 2004.
13) Drury C. Management and Cost Accounting // International Thomson Business Press, 5th Edition. 2000.
14) Scarlett R. C., Wilks C. Management Accounting - Performance Management // CIMA, London 2001.
15) Thomson A. and Strickland A. J. Strategic management: Concept and Cases // Plano, Business Publication, 1987.
16) Ward Keith Strategic management accounting // Butterworth - Heinemann, CIMA, 1999.
Regulated costs are also known as discretionary costs or managed or policy costs. The amount of discretionary spending can be changed relatively easily. The following are usually considered as regulated costs: costs of marketing, research, training, etc.
Committed costs are costs that arise as a result of decisions made in the past. These decisions cannot be reversed in the short term.
A control system organized at an economic entity in the interests of its owners and regulated by its internal documents. It is one of the ways to monitor the efficiency of the links in the structure of an economic entity.
The Tacis project PRRUS 9701 was carried out in 2003.
It is the fourth stage in the development of organizational structures for enterprise management: (1) A team of like-minded people; (2) Linear structure; (3) Functional structure; (4) Linear-functional structure; (5) Centralized linear-functional structure; (6) Matrix structure.
The effectiveness of the management accounting system can be considered, firstly, as an assessment of effectiveness (typical for the public sector) - the degree to which a certain result is achieved. This, in turn, requires studying, as part of performance assessment, not only relative indicators of management effectiveness, but also the effect of certain management decisions. Secondly, as a ratio of costs and benefits - the profitability of the project for direct participants (financial efficiency).
Internal audit (Internal audit - English, Betriebsinterne revision - German) is a control system organized at an economic entity in the interests of its owners and regulated by its internal documents. It is one of the ways to monitor the efficiency of the links in the structure of an economic entity.
Finance of an economic entity is an objective economic category that reflects the process of managing limited financial resources arising in the process of its production, investment and financial activities during a certain period.
The functional objectives of financial management are:
maximizing the market value of the company;
survival of the company in a competitive environment;
avoiding bankruptcy and major financial failures;
leadership in the fight against competitors;
sustainable and sufficient growth rates of the company’s economic potential;
growth in sales volumes;
cost minimization;
ensuring profitable activities.
All of these tasks are closely related to each other, although in some cases they are of a different nature. Their solution is possible as a result of the analysis of alternative solutions that take into account the compromise between the requirements of profitability, financial stability and liquidity of the enterprise.
The leading principles of financial management are:
integration into the overall enterprise system. This means that in whatever field of activity a management decision is made, it directly or indirectly influences the formation of cash flows as a result of financial activities;
the complex nature of the formation of management decisions - all decisions in the field of financial management are directly or indirectly interrelated; however, their impact on financial results may be contradictory;
high control dynamism;
multivariate approaches to the development of individual management decisions;
focus on the strategic goals of enterprise development.
Financial management decisions are always made under conditions of uncertainty, with varying degrees of risk and represent a trade-off between risk and return.
The object of management is the financial resources of the company, which represent the totality of all sources of funds accumulated by the organization in order to carry out all types of activities, as well as ensure the economic growth of the organization.
A market economy potentially offers a company a wide range of opportunities to mobilize financial resources to form assets and ensure growth from different sources and in different forms, which allows the choice of priority, accessible and cheapest ones when forming an optimal capital structure.
The subject of financial management is the top management personnel of the company, who determine the financial strategy and control operational financial decisions, specialized departments and services for financial management of the company, specialists - professional financial managers. In some cases, small and medium-sized companies, in order to save management costs, entrust financial management (or part thereof) to specialized companies for which financial management is a type of business activity.
Financial management is aimed at implementing strategic and tactical financial decisions.
Strategy is understood as the general direction and method of using financial resources to achieve a goal. The strategy allows you to concentrate efforts on alternative solutions that do not contradict the accepted goal.
The most important tasks in developing a corporation’s financial strategy include:
analysis and assessment of the financial and economic condition in order to achieve transparency of the latter for owners, investors, creditors;
maximizing the organization's profit;
optimization of the capital structure, ensuring the financial stability of the organization;
ensuring the investment attractiveness of the company;
use of market mechanisms to attract financial resources;
creation of an effective financial management mechanism for an economic entity.
Financial methods represent the way financial relations influence the economic process and include financial and management accounting, economic and financial analysis, financial planning, financial regulation and control.
Financial instruments provide the implementation of financial methods. They are based on the methodological tools of financial management, which are based on the basic concepts of the theory of finance, the time value of money, taking into account the inflation factor, taking into account the risk factor and taking into account the liquidity factor.
The adoption of any strategic and tactical decisions in financial management begins, is mediated and ends with financial and economic analysis - the process of studying the financial condition and main results of the financial activities of an economic entity. Financial analysis is aimed at assessing the financial capabilities of a company to determine strategic goals, the effectiveness of financial and investment decisions made through indicators of financial stability, solvency, profitability of business and market activity of the corporation within the country and abroad.
Analysis is an integral part of management: it is based on accounting information in the form of financial statements and management accounting data; allows you to compare reporting data with plans and standards, conduct internal audits, and provide interpretation of results. The subject of financial management is the top management personnel of the company, who determine the financial strategy and control operational financial decisions, specialized departments and services for financial management of the company, specialists - professional financial managers.
The organization's economic activities are carried out under market conditions. Market is the process of interaction between sellers and buyers to sell and buy goods based on determining their prices and quantities in accordance with supply and demand.
The basic principles of a market economy are:
variety of forms of ownership;
the presence of labor markets, capital, goods;
independence of enterprises, freedom of entrepreneurship;
market pricing and competition;
regulation of government intervention in the activities of the organization;
legal support for the rules of economic behavior of business entities;
There is a system of interconnected markets: labor, capital goods, consumer goods, financial resources, services and technologies. In all cases, the market plays the role of an economic instrument for the distribution of production and financial resources between various areas of their application.
The management system of any organization includes a variety of interrelated components, among which the following blocks related to economic analysis can be distinguished (Figure 3).
Figure 3. Relationships between economic analysis
Planning determines the directions and content of the organization’s activities; accounting ensures the collection, systematization and synthesis of data necessary for management; During the analysis process, primary processing of economic data is carried out, which allows the necessary decisions to be made. This determines the place of economic analysis in the management process.
Economic analysis is a way of understanding the economic processes of an economic entity, based on the decomposition of the whole into its component elements in order to study the latter in their interrelation and interdependence through synthesis, i.e. combining previously selected parts of an object.
Economic analysis is a set of analytical tools and methods applied to indicators in various economic and financial documents to identify significant relationships and characteristics and transform data into information.
As a result of economic analysis, the validity of drawing up business plans and standards is increased, the economic efficiency of using material, labor and financial resources is determined, internal reserves are identified and measured, implementation is monitored and business decisions are optimized.
Operational analysis plays a leading role in verifying the implementation of decisions made. The introduction of management accounting, effective commercial calculation, and compliance with the economy regime require daily analysis of costs by items and elements, unproductive expenses and losses. Making tactical management decisions makes it necessary to constantly analyze various options for economic parameters.
The analysis is used as a preliminary forecast tool when assessing investment projects. The choice of the best option for economic development is inextricably linked with current and forecast economic analysis and is based on economic and mathematical modeling and system efficiency analysis.
Without analyzing the impact on the enterprise's economy of the external and internal environment, market conditions, buyers and consumers of products, competitive conditions, market prices, and final financial results, it is impossible to develop marketing programs and monitor their implementation.
Economic analysis is an important element in the financial management system for predicting financial conditions and results, assessing the financial condition of an enterprise, and the effectiveness of the functioning of its financial system, which is the totality of the financial relations of an organization.
In the process of business activities of a company, cash flow occurs. The result of this movement is financial relations at the organizational level. They are very diverse:
- - with other organizations for the supply of raw materials and sales of products;
- - within the organization with employees of the organization for the payment of wages, shareholders - for the payment of dividends, separate structural divisions;
- - within a group of interrelated organizations (holding structure), the relationship between the main and subsidiary companies, between subsidiaries;
- - with the tax service, extra-budgetary funds, financial authorities of the state;
- - with the financial and credit system (banks) for settlements, receipt and repayment of loans, purchase and sale of currency;
- - with insurance organizations, stock and commodity exchanges, investment companies.
To evaluate financial relationships, all users of financial statements use financial analysis methods to make decisions to optimize their interests. For the purpose of financial management, three interrelated blocks are considered:
analysis of the financial results of the organization;
analysis of the financial condition of the organization;
analysis of the effectiveness of the financial and economic activities of the organization.
This assessment is basic in the system and sequence of analytical procedures:
consideration of each indicator obtained as a result of the analysis from the point of view of compliance of its level with parameters normal for a given enterprise;
identification of factors that influenced the value of the indicator and calculations of possible changes in the indicator when modifying one or another factor;
forecasting the required value of the indicator for the future and establishing ways to achieve this value;
identifying the interdependence of financial condition indicators and ensuring targeted impact on improving the efficiency of the organization;
substantiation of hypotheses for the development of financial condition when the conditions of the enterprise’s activities change.
Solving interrelated analytical problems provides the basic functions of financial management. Recently, one of the necessary elements of managing the activities of an enterprise has become an audit, which is based on the mandatory use of economic analysis methods to determine the client’s business activity by the auditor; evaluates the financial and economic prospects of operation; identifies areas of possible intentional and unintentional errors in the client’s external reporting.
The auditor’s analytical procedures during preliminary familiarization with the client’s business boil down to the following actions:
comparison of current data with data from previous periods;
comparison of current data with plan and forecast data;
comparison of current data with standard indicators;
comparison of current enterprise data with industry average data;
calculation of financial ratios over time;
Thus, economic analysis is one of the important components of planning, regulation and management of an organization.
In accordance with the legislation of the Russian Federation, all enterprises must maintain accounting records of property, liabilities and business transactions. Accounting – one of the most important functions of an enterprise. Correct accounting helps ensure control over the safety and rational use of the enterprise’s property; identifying factors that contribute to saving labor, material and financial resources; growth of savings.
Main accounting tasks are:
1. Formation of complete and reliable information about business processes and financial results necessary for operational management and management, as well as for use by investors, suppliers, buyers, tax and financial authorities, bankers, etc.
2. Ensuring control over the availability and movement of property, the use of material, labor and financial resources in accordance with standards, norms and estimates.
3. Timely prevention of negative phenomena in financial and economic activities, identification and mobilization of on-farm reserves.
The company keeps records in a way double entry in accordance with the chart of accounts. The structure of the accounts is a two-sided table: the left side is debit, the right side is credit. The account balance at the end of the period (month, quarter, year) is called “ balance" The amount of business transactions for a period is called turnover. The basis for entries in accounting registers are primary accounting documents that record the fact of a business transaction.
Accounting Rules:
Complete documentation of all business transactions;
Reflection of business transactions using a cost meter;
Using a system of accounts for registering enterprise funds and sources of their formation;
Double entry rule (debit of one account and credit of another);
Generalization of accounting information in accounting registers and balance sheets.
Accounting accounts are intended for grouping and current accounting of homogeneous business transactions; a separate account is opened for each type of economic funds and their sources. There are three type of accounts :
- active intended for accounting for economic assets by their composition and placement, the balance of such accounts is formed only by debit (for example, account 01 “Fixed Assets”);
- passive designed to account for sources of economic assets for their intended purpose, the balance is formed only on the loan (for example, account 02 “Depreciation of fixed assets”);
- active-passive intended for accounting for financial results and debts, the balance can be formed by both debit and credit (for example, account 71 “Settlements with accountable persons”).
The relationship between accounts as a result of recording transactions using the double entry method is called correspondence of accounts, and the accounts themselves are called correspondent. Recording an entry using two offsetting accounts is called accounting entry.
Example. An accountable amount of 5,000 rubles was issued from the cash register. A posting is made: debit to account 71 “Settlements with accountable persons” and credit to account 50 “Cash” in the amount of 5,000 rubles. Depreciation of fixed assets was accrued in the amount of 12,000 rubles. A posting is made: debit to account 20 “Production costs” and credit to account 02 “Depreciation of fixed assets” in the amount of 12,000 rubles.
To summarize all accounting records, order journals are used, the turnover of which is summarized in the general ledger and the turnover sheet (balance sheet), characterized by the presence of three pairs of equal totals:
Balance at the beginning of the period by debit and credit;
Turnovers for the period by debit and credit;
Balance at the end of the period for debit and credit.
Balances at the end of the period are transferred to the enterprise's balance sheet.
Accounting ensures the constant collection, systematization and synthesis of data necessary for production management and monitoring the progress of the production process. Comprehension, understanding of information, identification of changes and trends occurring in the enterprise’s economy are achieved with the help of economic analysis . During the analysis process, the primary information undergoes analytical processing: the achieved results are compared with data for previous periods of time, with the indicators of other enterprises and the industry average; the influence of various factors on the value of performance indicators is determined, shortcomings, errors, unused opportunities, prospects, etc. are identified.
Functions of economic analysis are the following:
Study of patterns and trends of economic phenomena and processes in specific conditions of the enterprise;
Scientific substantiation of current and future plans;
Monitoring the implementation of plans and management decisions;
Search for reserves for increasing production efficiency based on the study of advanced experience and achievements of science and technology;
Assessing the results of the enterprise’s activities in terms of fulfilling plans, the achieved level of economic development, and the use of existing opportunities;
Development of measures for the use of identified reserves.
In the analysis of economic activity are used ways :
1. Traditional methods:
Comparison (comparing actual data with planned data);
Relative and average values (for example, indicators of dynamics, average number of employees, etc.);
Graphic;
Groupings (dividing the mass of the studied set of objects into qualitatively homogeneous groups according to relevant characteristics);
Balance.
2. Methods of deterministic factor analysis, based on the functional dependence of indicators, building models:
Chain substitutions (quantitative influence of factors);
Index method (aggregate indexes);
Absolute differences (elimination option);
Relative differences (relative increases in indicators);
Integral (use of special formulas);
Proportional division (for multiple-additive models);
Logarithm (for multiplicative models).
3. Methods of stochastic factor analysis, based on an incomplete, probabilistic relationship between indicators:
Correlation analysis (the correlation coefficient determines the closeness of the relationship between indicators);
Regression analysis;
Analysis of variance;
Component analysis;
Modern multivariate factor analysis.
4. Ways to optimize indicators, based on determining the maximum or minimum value of the indicator under certain restrictions:
Economic and mathematical methods;
Programming;
Queuing theory;
Game theory;
Operations research.
Based on the results of the analysis, management decisions are developed and justified.
Control questions
1. Give a definition of the credit and financial system of the Russian Federation.
2. Name the main functions of the credit and financial system of the Russian Federation.
3. What is enterprise finance?
4. What are the main sources of financial resources of the enterprise?
5. What are the main types of cash flows?
6. Define the balance sheet of an enterprise.
7. What is the balance sheet currency?
8. What does solvency, liquidity of an enterprise, and its financial stability mean?
9. Name the main tasks and rules of accounting.
10. What are the goals and main methods of analyzing the production and economic activities of an enterprise?
One of the most important functions of implementing flexible regulation and forecasting of business processes is analysis in management accounting, the main goal of which is to constantly provide information support for monitoring the rational functioning of the entire economic system to fulfill obligations of production and sales of products, identify and mobilize current internal production reserves to increase costs production, growth of its profitability.
Cost analysis, which is an element of the control function, helps to assess the efficiency of using all enterprise resources, identify reserves for reducing production costs, collect information for preparing plans and making rational management decisions in the field of costs.
It should be noted that historically the role of accounting and analysis in the management system has been wrongfully downplayed. Often, in the classification groupings of management functions, functions such as planning, organization, regulation, coordination, stimulation, control were highlighted, and accounting and analysis were included in the control function. However, having understood the importance and true meaning of analytical information in the process of making management decisions, individual specialists tried to correct the current situation.
Correctly noting the imperfection of classification groups of management functions, A.S. Borodkin proposed to include economic analysis as independent functions in management, emphasizing their importance and noting a wider range of content and functioning of economic analysis compared to the control function.
Currently, in the conditions of the formation of market relations, the role of analysis in the management of economic activities is objectively increasing, since analytical information provides a system for managing the necessary data and allows making effective management decisions in the field of costs.
A large role is given to analysis in identifying and using reserves for increasing production efficiency. It promotes the economic use of resources, the identification and implementation of best practices, scientific organization of labor, new equipment, production technology, etc. As a result, production efficiency increases.
The role of analysis as a means of production management has recently been increasing, which is due to various circumstances. First of all, the need to increase production efficiency in connection with the growing shortage and cost of raw materials, increasing the science and capital intensity of production; transition to market relations; creation of new forms of management. In these conditions, management decisions must be based on accurate calculations, deep and comprehensive economic analysis.
Analysis in management accounting is aimed at identifying the internal resources and capabilities of the enterprise, assessing the current state of the business, and identifying strategic problems. The need for management analysis is determined by several factors:
firstly, it is necessary when developing an enterprise development strategy and, in general, for the implementation of effective management, since it is an important stage of the management cycle;
secondly, it is necessary to assess the attractiveness of the enterprise, from the point of view of an external investor, to determine the position of the enterprise in national and other ratings;
thirdly, management analysis allows us to identify the reserves and capabilities of the enterprise, determine the directions for adapting the internal capabilities of the enterprise to changes in environmental conditions. As a result of conducting an internal analysis of the enterprise, a number of points can be identified:
The enterprise overestimates or underestimates itself;
Does it overestimate or underestimate its competitors;
Which market requirements does it attach too much or, conversely, too little importance to?
A difficult methodological problem in management analysis is determining the range of indicators to be analyzed. There are two areas of economic analysis at the enterprise and, accordingly, two groups of indicators:
Indicators characterizing the economic potential of the enterprise;
Indicators characterizing the economic activities of the company.
The management analysis of an enterprise’s activities should be based on the following principles:
A systems approach, according to which an enterprise is viewed as a complex system operating in an open systems environment and consisting, in turn, of a number of subsystems;
The principle of a comprehensive analysis of all components of subsystems and elements of the enterprise;
Dynamic principle and principle of comparative analysis;
The principle of taking into account the specifics of the enterprise (industry and regional).
Important importance in the economic analysis of production and economic activities is given to cost analysis, which is an integral element of the control function, helps to assess the efficiency of using all enterprise resources, collect information for preparing plans and making rational management decisions in the field of costs. In a cost management system, analysis ends the functional cycle and at the same time is its beginning.
Effective cost management at different levels is ensured by the use of methodological unity, which presupposes uniform requirements for information support, planning, accounting, and cost analysis in the enterprise. This is provided by a management accounting system that connects all these elements in a single methodological and methodological space and acts as a comprehensive, systematic study of production costs.
Analysis in management accounting is necessary to resolve issues of cost formation, efficient use of resources, as well as production and sales of products. The management level reflects the internal problems of the enterprise: size, cost and efficiency of use of production resources, cost measurement, formation of production centers, its quality, competitiveness, price, scope of sales, i.e. all those moments on which financial results depend. Control objects are shown in Fig. 1 .
Analysis in management accounting, like management accounting, is designed to provide the management apparatus of an organization or enterprise with the information necessary for managing and monitoring the activities of the organization and helping the management apparatus in performing its functions. Most of the analytical information associated with the analysis of production resources represents intermediate information, which is ultimately reflected in certain performance indicators.
Production resources go through the stages of supply and production, turning into the main final results - products, revenue and costs.
Rice. 1.
In Fig. 1 shows that management accounting and analysis are associated with the study of primary information about resources and first-order performance indicators: products and costs. However, only by managing them can one influence the formation of second-order results - financial results. The objects of management accounting and analysis are much broader than just cost accounting and analysis. This allows us to formulate a system of goals for management analysis:
Assess the place of the enterprise in the market for a given product;
Determine the organizational and technical capabilities of the enterprise;
Identify the competitiveness of products, market capacity;
Analyze resource opportunities for increasing production and sales through better use of labor tools, objects of labor, and labor resources;
Assess the possible results of production and sales of products and ways to speed up production and sales processes;
Make decisions on the range and quality of products, launching new product samples into production;
Develop a strategy for managing production costs by deviations, cost centers, and responsibilities;
Determine pricing policy;
Analyze the relationship between sales volume, costs and profits in order to manage production break-even.
The main result - profit, which then becomes the object of financial analysis - depends on the correctness and effectiveness of internal management accounting and analysis. This is the unity of goals, but the difference in the objects of management and financial accounting and analysis. Each of them solves its own problem of a unified strategy for accounting and analysis of the enterprise.
The main goal of the management system is to provide the conditions necessary for the implementation of the set goals, and among them, a decisive place is given to economic methods of targeted influence on the control object.
Developing a management decision is one of the main tasks of the enterprise management process. Economic analysis in the management process acts as an element of feedback between the control and managed systems, which is a process of informing interested managers about the correspondence of actual performance results to the expected or desired ones.
Feedback information typically passes through the internal management reporting system, which is an integral part of the organization's broader internal control system.
Internal management reporting is compiled primarily for the manager responsible for achieving goals, and secondarily for his boss. The disadvantages of internal reporting, typical of traditional approaches to internal control, are that the emphasis is on errors rather than providing managers with targeted information that allows them to take effective action. The feedback hierarchy in management accounting is built in such a way that operational management decisions are made at lower levels based on the maximum amount of data provided (Fig. 2).
Rice. 2.
To the highest levels of management, the volume of information is reduced, and the responsibility (significance) of decisions made increases, as shown in the figure.
Internal management reporting is, along with the chart of accounts of management accounting, a system-forming element, the main backbone on which the entire management structure rests.
In the process of management accounting, many different methods, approaches and techniques are used to streamline, target and effectively organize the implementation of functions, stages, procedures and operations necessary for decision-making. Taken together, they act as management methods, which are understood as methods of carrying out management activities used to set and achieve its goals.
Rice. 10.2. Stages and procedures for organizing management accounting systems Rice. 10.3. The sequence of accounting for transactions using the order-based costing method Rice. 10.4. Relationships between costing systems and production costing methods Rice. 10.5. Graphic display of break-even point Rice. 10.6. A complete system of budgets for an industrial organization Rice. 10.7. Structure of the management accounting service
After studying this chapter, you will be able to:
know:
Accounting systems of an organization as an economic entity, their main characteristics;
Basic systems and methods of management accounting;
Principles of forming responsibility centers;
be able to:
Calculate and analyze product costs and make informed decisions based on accounting and management accounting data;
Assess the effectiveness of using various accounting systems;
have skills (gain experience):
Application of methods and methods for organizing cost accounting, cost calculation for the purpose of managing business processes and performance results;
Using modern methods of grouping costs by type, place of formation and centers of responsibility, methods for calculating production and sales costs, taking into account the characteristics of various types of activities;
Organization of management accounting at the enterprise, monitoring the results of the activities of its responsibility centers.
After studying this chapter, you will have:
The ability to take into account the consequences of management decisions and actions from a position of social responsibility (OK-20);
Powers and responsibilities based on their delegation (PC-2);
Willingness to develop control procedures and methods (PC-3);
The ability to assess the conditions and consequences of organizational and management decisions (PC-8);
Ability to have an economic way of thinking (in terms of perceiving the economy of an organization through its accounting system) (PC-26);
The ability to evaluate the effectiveness of using various cost accounting and distribution systems;
Have skills in calculating and analyzing product costs and the ability to make informed management decisions based on management accounting data (PC-41).
In modern market conditions, the competitiveness and efficiency of each economic entity largely depends on the timely adoption of management decisions on changes in output volumes, assortment and quality of products, and its pricing policy. The most important tasks of modern management practice are the development and implementation of decisions aimed at achieving financial and economic sustainability and the efficiency of the organization. The independence of economic entities implies high responsibility for management decisions made. The uncertainty of the external environment, its dynamism and instability entail many risks for the organization, which increases the role of economic information in management decision-making and justifies the stringency of the requirements for the organization's information system.
In modern conditions, in the information field of an organization, there are, as a rule, four accounting systems, the purpose of which is to satisfy the information needs of users of economic information at different levels (Fig. 10.1 
).
As can be seen from the figure, in Western countries, including the United States, the accounting system includes four types of accounting. In our country, the economic accounting system also includes four types of accounting, each of which performs its own specific functions and forms a corresponding block of information. Information generated in the accounting system that has developed in our country can be divided into four main categories:
- information necessary for the operational management of the organization;
- information reflecting the current financial condition of the organization;
- information necessary for generalization within a region, industry or country as a whole;
- information generated for tax purposes.
All types of accounting that make up the organization's accounting system are suppliers of a variety of information necessary for decision-making. At the center of information flows in Russian organizations is the accounting system, since it allows one to generate information about the real state of affairs of an economic entity. In modern conditions of economic development, the role of reporting data as a source of reliable and objective information about the results of financial and economic activities is significantly increasing.
The information necessary for the operational management of an organization is used by managers at various levels to ensure current and operational resource management (microeconomics). The most significant data in this system are data on the amount of costs for production and sales of products, the cost per unit of production, the ratio of the volume of products sold, its cost and profit, the amount of expected income and expenses as a result of the implementation of planned contracts, transactions, investments, and forecasting. level of profitability of new types of products. This information flow is formed within the framework of so-called management accounting. Internal economic information contains trade secrets, its volume for managers at various levels is limited by the scope of their direct competence, and access to various types of accounting information is regulated by the performance of functional duties by managers.
Let's consider the features of each type of accounting included in the Western accounting system.
Financial accounting performs the functions of system accounting, built in accordance with the principles and norms of international standards. The objective of financial accounting is to prepare financial statements that can be used by both external and internal users. At the same time, external users of accounting information can be share owners and creditors (both real and potential), suppliers, buyers, representatives of tax services, etc.
Tax accounting provides the organization with information on the correct and full use of tax benefits and determines the choice of accounting policies. Depending on the accounting and asset valuation methods chosen in it, different balance sheet and reporting indicators are formed. To improve performance indicators, the organization strives to minimize the total amount of tax payments within the framework of the law.
Each organization in the conditions of market relations obviously needs analytical operational information that characterizes the rational use of production resources, the feasibility of investing in them, and the profitability of the organization’s economic and financial activities. These problems can be solved using management accounting, as evidenced by current practice in economically developed countries.
The management accounting system uses all types of information that is collected, measured, processed and transmitted for internal use to management and those managers who can develop and make informed management decisions.
Management Accounting is a system for generating information intended for making management decisions aimed at achieving the goals of the entire organization. The development of management accounting is associated with the complication of the structure of organizations, diversification of products, and the need to maintain trade secrets about costs and profits in a competitive environment.
According to Western and some Russian experts, management accounting is a logical continuation of the development of accounting (financial) accounting and its evolution. However, this statement is not indisputable, since these two accounting systems face different tasks in many respects, which determines the differences between accounting (financial) and management accounting, the main of which are presented in the form of comparative characteristics of accounting (financial) and management accounting in Appendix 11.
From an accounting point of view, management and other types of accounting are based on almost the same array of primary data, but they represent their different interpretation and embodiment in different final information. However, management accounting must be future-oriented, i.e. provide the ability to predict the future state based on previously identified information.
Taking into account the above, consider the organization’s accounting system as multi-level structure.
At the first, basic level there are: accounting, operational, financial accounting.
At the second level - tax and statistical accounting.
At the third level - management accounting.
The primary flow of information falls into accounting, operational and financial accounting. At the tax and statistical levels, summary information is processed according to rules defined by law (accounting regulations, tax code of the Russian Federation, international accounting rules, etc.) and transmitted external users(shareholders, creditors, government and tax regulatory authorities, etc.). Information from the first and second levels, determined by internal regulations (orders, methods, etc.), is transferred to the next level of management accounting. At this level, information is analyzed and transmitted in a certain form internal users(managers at different levels, founders, participants and owners of the organization’s property). Information at the stage of management accounting must have the property of relevance, i.e. information, passing through the management accounting system, is processed in a certain way, transformed and takes on the necessary and predetermined form.
In the modern economy, it is obvious that modern economic relations and the mechanism of market relations are becoming more complex, the emergence of new market instruments, methods and means of managing economic and financial activities, which together created the need for additional information to ensure the successful functioning of the organization in these conditions. Significant changes have occurred in technology, technology and production organization. More varieties of the product, methods of its manufacture, and options for combining them have appeared. Costs and, in many respects, the results of activities now depend not so much on the individual efforts and skills of a person, but on the technical level of production, the productivity of the machines and equipment used. The number of options for solving emerging problems has increased, and the cost of an incorrect management decision has increased.
It is obvious that internal (in-house) management requires a new system for generating information for analysis, selection and justification of such decisions. There was a need to reorient the main goal of economic accounting to meet internal needs. The expansion of the range of activities has created a need for additional information.
Management accounting is sometimes called internal accounting, which includes a system production accounting. Production accounting involves a system of collecting, registering, summarizing and processing information on production costs, systematized according to certain criteria, monitoring their condition and calculating the cost of production. The formation of indicators of the production and economic activity of an organization in the management accounting system is a trade secret of the organization, a secret of the company.
If accounting is considered as a whole, from a functional perspective, then accounting is a production management function, consisting in receiving, registering, accumulating, processing information about the real facts of economic activity, their results, resources used, etc. Such information is necessary for government bodies at all levels to make informed decisions. The result of organizing management accounting should be the ability to obtain information about the state of each business process at any time in real time. In this case, the managerial accounting operator acts as the subject of management accounting, and accounting information acts as the object.
Thus, management accounting is a system for generating certain information and using it within an enterprise to make management decisions.
At the same time, it is important to understand that it is in this sense, that is, in the sense of a certain system for collecting and processing information, that the word “accounting” should be used in relation to this activity. The information collected by the management accounting system cannot be delivered by accounting (financial) accounting, since it has completely different goals and objectives.
Management accounting is the link between the accounting process and enterprise management.
Within the framework of management accounting, standardization, planning, control of the organization’s production activities, evaluation of achieved results and development of recommendations for the future are carried out.
Management accounting is an independent direction of economic accounting of an organization, which provides its management apparatus with information used for planning, control, and evaluation of the organization as a whole and its structural divisions.
Inventory is one of the important factors affecting production efficiency. The stock norm is the minimum amount of material resources that must be in enterprises or organizations for a normal supply process. And for the purpose of scientifically based organization of supplying production with the necessary material resources, production reserves at enterprises are created in a planned manner, and their standardized quantity is determined by calculation within the limits of need to ensure the rhythmic functioning of the enterprise.
Accordingly, planning - the professional activity of drawing up cost estimates, monitoring their implementation, and measuring performance results - is necessary for any organization, no matter in what area it exists. Any organization, regardless of its legal form, form of ownership and type of activity, requires qualified management of human, material and financial resources. The creation of an effective mechanism for such management is greatly facilitated by the organization of management accounting.
Another important point when determining the essence of management accounting is analyticality of information. In the management accounting system, information is collected, grouped, identified, studied, i.e. analyzed in order to develop the most appropriate management decision for the organization at the moment. For example, the efficiency of production activities can be determined using management (in particular, production) accounting data by comparing actual and standard costs and results from expenses incurred.
Establishing the essence of management accounting is facilitated by considering a set of features that characterize it as an integral information and control system of an enterprise: continuity, purposefulness, completeness of information support, the use of objective economic laws, the impact on management objects under changing external and internal conditions.
Thus, management accounting is an integral part of the enterprise management system. It is designed to provide the process of generating information for:
- monitoring the efficiency of the organization’s current activities as a whole and in the context of its individual divisions, types of activities, and market sectors;
- planning future strategy and tactics for carrying out economic and financial activities in general and individual business operations, optimizing the use of material, labor and financial resources of the organization;
- measuring and assessing business efficiency in general and by division of the organization, calculating the level of profitability of individual types of products, works, services, sectors and market segments;
- adjusting management decisions made during the process of production and sales of products, goods and services, reducing subjectivity in the decision-making process at all levels of management.
Main principles of management accounting:
1) orientation towards achieving the task,
2) the need to provide alternative solutions to it,
3) participation in the calculation of regulatory parameters of the optimal option and in monitoring its implementation,
4) focus on identifying deviations from specified performance parameters,
5) interpretation of identified deviations and their analysis.
It is also necessary to observe the general principles of generating information for management:
The principle of advancing data for making management decisions,
The principle of responsibility for its consequences.
At the same time, a correct assessment of upcoming expenses and income is much more important than a statement of missed opportunities. At the same time, if there is no responsibility for business results at all levels of management, maintaining management accounting does not make much sense.
One of the requirements of international management accounting standards is its integrity and clarity. Management accounting must be systematic even when it is maintained without the use of primary documents, a system of accounts and double entry. Consistency in this case means the unity of principles for reflecting accounting information, the interrelation of accounting registers and internal reporting, ensuring, if necessary, the coordination of its data with accounting and reporting indicators.
The clarity of management accounting information is ensured by reflecting the results of analysis of the obtained indicators in accounting registers, presenting data in the form of analytical tables, graphs, etc. Data from well-organized management accounting make it possible to identify areas of greatest risk, bottlenecks in the organization’s activities, ineffective or unprofitable types of products and services, and methods for their implementation. They are used to determine the most profitable range of products and works for given conditions, prices and tariffs for their sale, discount limits under different sales and payment conditions to assess the effectiveness of additional costs and the rationality of capital investments. Only according to management accounting data can you choose the best option for solving various production and management problems.
Information is information about persons, objects, facts, events, phenomena and processes that expand the understanding of the object of study. Management accounting information in practice, it often comes down to identifying deviations of actual indicators from calculated ones, not only in relation to the amount of production costs, but also to deviations in stock standards, prices, payment terms, etc. Based on information about deviations, measures are taken to eliminate the causes that cause actual production costs to exceed standard costs, loss of profit and property.
The following are used in management accounting: types of information:
Quantitative and non-quantitative;
Accounting and non-accounting;
Complete and incomplete.
The following requirements apply to management accounting information:
Targeting (to specific recipients in accordance with their level of preparedness and hierarchy);
Efficiency (within a time frame that allows you to get your bearings and make management decisions);
Sufficiency (to the extent necessary for a management decision);
Analyticity (must contain express analysis data);
Flexibility and initiative (ensuring completeness of information in changing management situations);
Usefulness (draw attention to areas of potential risk);
Sufficient efficiency (the costs of collecting and processing information should not exceed the economic effect of its use).
Management accounting information is confidential and requires protection, which includes:
- a clear division of personnel with assigned powers depending on the tasks being solved (the problem of premises);
- restricting access of employees and unauthorized persons;
- strict restriction of access to information;
- increased requirements for employees to ensure the safety of information.
Production information used in a number of management accounting procedures only as an information base for calculating indicators, standards and financial estimates. Accounting data should not be detrimental to management activities, but should be useful to them. Managers use accounting information as an information base when solving problems of managing an organization.
From the point of view of setting up management accounting in an organization, it is necessary to emphasize its universality. Management accounting can be introduced at all enterprises and organizations that have costs and inventories in warehouses, and during their movement through the stages of the production cycle to the finished product warehouse. They include raw materials, as a product of extractive industries, agriculture; materials that have undergone pre-processing both at the enterprise itself and at others (semi-finished products - blanks, forgings, castings, parts, assemblies, etc.); labor resources - the mass of living labor that the enterprise currently has, the use of labor resources in the process of purposeful activities and the result of labor.
Management accounting data is primarily intended for the administration of the organization - management personnel, managers, executives. For each of them, the composition of information is determined depending on the functions it performs and the position it occupies. For managers, for example, the most important information is the amount and rate of profit, adequacy of funds, cost and profitability of individual products.
The subject of management accounting is the production activities of the organization and its individual structural divisions (segments), called responsibility centers.
In management accounting, as a rule, there are four types of responsibility centers:
Cost centers;
Revenue Centers;
Profit centers;
Investment centers.
This classification is based on the criterion of financial responsibility of managers, the breadth of their powers and the completeness of the responsibility assigned to them.
A cost center is a structural unit of an organization in which it is possible to organize standardization, planning and accounting of production costs in order to monitor, control and manage the costs of production resources, as well as evaluate their use. The manager has the least amount of managerial authority. He is only responsible for the costs incurred. The management accounting system measures and records input costs to the responsibility center. The work of the cost center is carried out in two directions:
- obtaining the maximum result at a certain specified level of investment.
- the investments required to achieve a given result are brought to a minimum level.
A revenue center is a structural unit of an organization whose manager is responsible for generating revenue, but is not responsible for costs. The activities of the head of this center are assessed on the basis of earned income, therefore, the management task in this area is to record the results of the center’s activities at the output. The goals of the revenue center are to remain competitive and generate profits.
A profit center is a structural unit of an organization, the head and managers of which are simultaneously responsible for both income and costs. He makes decisions both on the amount of resources consumed and the amount of expected revenue.
The goal of a profit center is to obtain maximum profit through the optimal combination of parameters of invested resources, volume of products, their quality and price. The efficiency of the center is assessed by the economic indicator - profit. Profit growth is stimulated by the correct selection of indicators characterizing the business activity of the division.
Investment Center- a structural unit of an organization, whose managers not only control the costs and income of their divisions, but also monitor the effectiveness of the use of funds invested in them. They have the right to make investment decisions regarding individual projects. The head of the center has the greatest authority in management and bears the highest responsibility for decisions made.
Objects of management accounting:
Costs of the organization (current and capital) and its divisions (financial responsibility centers);
Results of the activity of the enterprise as a whole and centers of financial responsibility;
Internal pricing, which involves the use of transfer prices;
Budgeting;
Internal reporting.
Methods used in management accounting:
Elements of the accounting (financial) accounting method (accounts and double entry, inventory and documentation, balance sheet summary, reporting) - are presented in Chapter 1 of the textbook;
Index method (statistics);
Techniques of economic analysis (factor analysis);
Mathematical methods (correlation, linear programming, least squares method).
Economic isolation and independence of organizations objectively contributes to the complication of their orientation in the system of economic relations and increasing importance control functions organization. The implementation of this function is ensured by management accounting, the task of which is to compile internal reports. As already noted, the information presented in them is intended both for the owners of the organization and its managers, i.e. for internal users. These reports contain information not only and not so much about the general financial position of the enterprise, but also about the state of affairs directly in the production area. The content of reports varies depending on their purpose and the level of the manager requesting a particular report.
Management Accounting Concepts:
1) fundamental concept - a reliable and conscientious reflection of the facts of economic life, compliance of information with the actual state of affairs in the organization;
2) the basic concept of management accounting is the priority of content over form, which proclaims the priority of economic content over legal form when including various types of information in the accounting system.
In accordance with these concepts, accounting principles(Table 10.1).
Name of the principle
|
Name of the principle |
Disclosure of the content of the principle |
|
1 |
2 |
|
1. Responsibility |
The collection and processing of internal and external information necessary to achieve the organization's goals requires regularly defining the responsibilities and key individual performance of managers |
|
2. Controllability |
Identifying the activities that managers can and cannot influence by analyzing, comparing and explaining information to control, evaluate and regulate production activities |
|
3. Credibility |
Must have credibility, completeness, accessibility, which depend on the source of information |
|
4. Interdependence |
Using both internal and external sources, namely: obtaining information from interacting departments related to sales, supply, production, personnel, finance, etc. |
|
5. Relevance |
Delivery in a timely manner, in a clear, understandable manner, using as many alternatives as necessary to make informed decisions |
|
6. Isolation |
Consideration of both individual divisions (responsibility centers) of the organization and individual management problems |
|
7. Continuity |
Constant formation of the information field of credentials |
|
8. Completeness |
The most complete information regarding any accounting and management problem to select the most effective management decisions |
|
9. Reliability |
Validity and reliability of the information used |
|
10. Timeliness |
Providing information upon request |
|
11. Comparability |
The same indicators for different periods of time or when developing options for action should be formed in accordance with the same principles |
|
12. Clarity |
Information on content and form should be clear, relevant and not overloaded with unnecessary details |
|
13. Frequency |
Internal circulation of information requires determining the timing of drawing up internal reports for users |
|
14. Cost-effective |
The costs of maintaining a management accounting system should be significantly less than the benefits from its operation |