CPA Section 5 – Advanced Management Accounting (KASNEB)

About Course

This unit is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her to apply advanced management accounting techniques in business decision making.

Course Content

Nature of Management Accounting
Nature of management accounting

Introduction to advanced management accounting

00:00
Scope of management accounting

00:00
Limitations of management accounting

00:00
Ethical standards of management accountants

00:00

Decision Theory
Decision theory

Cost Estimation and Forecasting
Cost estimation and forecasting

Inventory Control Decisions
Inventory control decisions

Pricing Decisions
Pricing decisions

Short-term Planning and Decision-Making
Short-term planning and decision-making

Budgetary control and advanced variance analysis
Budgetary control and advanced variance analysis

Performance Measurement and Evaluation
Performance measurement and evaluation

Linkage between performance measurement and organisational vision
Responsibility accounting and responsibility centres, segmented reporting
Distinction between financial performance measures and non-financial performance measures
Cost of information
Methods of evaluating responsibility centre performance such as return on investment (ROI), residual income (RI) and economic value added (EVA) (mportance and limitations of the methods)
Other financial/non-financial performance measures: balanced scorecard, performance pyramid, Fitzgerald and Moon’s building block model, performance prism
Managerial incentive schemes
Performance contracting
Performance measures in the service industry

Environmental Management Accounting
Environmental management accounting

Emerging Issues and Trends
Emerging issues and trends

CPA Section 5 – Advanced Management Accounting (KASNEB)

About Course

Course Content

Nature of Management Accounting Nature of management accounting

Introduction to advanced management accounting

Scope of management accounting

Limitations of management accounting

Ethical standards of management accountants

Decision Theory Decision theory

Decision process

Decision making environment – certainty, risk, uncertainty and competition – Decision making under uncertainty – maximin, maximax, minimax regret, Hurwicz decision rule, Laplace decision rule

Decision making under uncertainty – maximin, maximax, minimax regret, Hurwicz decision rule, Laplace decision rule

Decision making under risk – expected monetary value, expected opportunity loss, minimising risk using coefficient of variation, expected value of perfect information

Decision trees – sequential decision, expected value of sample information

Limitations of expected monetary value criteria

Cost Estimation and Forecasting Cost estimation and forecasting

An overview of the methods of cost estimation and prediction; engineering, simulation and statistical methods, simple and multiple regressions, the statistical properties of regression

Interpretation of ANOVA tables

Learning curve and its application

Inventory Control Decisions Inventory control decisions

Cost of holding and ordering inventory

Stochastic inventory models

Inventory models for perishable items

Application of simulation models in inventory control

Pricing Decisions Pricing decisions

External pricing methods

Internal pricing methods (transfer pricing)

Target costing

Life cycle costing

Short-term Planning and Decision-Making Short-term planning and decision-making

Overview of single product and multiple product cost-volume-profit analysis under conditions of certainty

Single product and multiple product cost-volume-profit analysis under conditions of uncertainty

Risk assessment

Application of marginal costing: product mix decisions, special orders, make or buy decision, pricing decisions and other similar short-run decisions, relevant information in decision making

Budgetary control and advanced variance analysis Budgetary control and advanced variance analysis

Flexible and static budget, purpose of budgetary control; operation of a budgetary control system, organisation and coordination of the budgeting function

Human aspects (motivational aspects) of budgeting, emerging trends in budgetary control; ERPS, ABB, ZBB, program budgeting

Advanced variance analysis and performance evaluation; expost variances and opportunity costs in variances

Variance investigation models

Performance Measurement and Evaluation Performance measurement and evaluation

Linkage between performance measurement and organisational vision

Responsibility accounting and responsibility centres, segmented reporting

Distinction between financial performance measures and non-financial performance measures

Cost of information

Methods of evaluating responsibility centre performance such as return on investment (ROI), residual income (RI) and economic value added (EVA) (mportance and limitations of the methods)

Other financial/non-financial performance measures: balanced scorecard, performance pyramid, Fitzgerald and Moon’s building block model, performance prism

Managerial incentive schemes

Performance contracting

Performance measures in the service industry

Environmental Management Accounting Environmental management accounting

Role of accountants in environmental management accounting

Using environmental management accounting to manage costs

Opportunities for environmental awareness in management accounting

Emerging Issues and Trends Emerging issues and trends

Emerging Issues and Trends Emerging issues and trends

Nature of Management Accounting
Nature of management accounting

Decision Theory
Decision theory

Cost Estimation and Forecasting
Cost estimation and forecasting

Inventory Control Decisions
Inventory control decisions

Pricing Decisions
Pricing decisions

Short-term Planning and Decision-Making
Short-term planning and decision-making

Budgetary control and advanced variance analysis
Budgetary control and advanced variance analysis

Performance Measurement and Evaluation
Performance measurement and evaluation

Environmental Management Accounting
Environmental management accounting

Emerging Issues and Trends
Emerging issues and trends

Emerging Issues and Trends
Emerging issues and trends