DISCUSSION QUESTION

How relevant is managerial accounting to Pacific Island Countries? Use appropriate examples from your country to discuss this question.

2.Managerial accounting is an important feature of accounting to any current entity, whether it is an organization, companyorNGOs. within the pacific countries, there are so many companies that are privately owned and some are owned by the government andallthisorganization used managerial accounting information to help managers make informed operational decisions. Butyet,some of these entitiesespeciallyin the pacificisland countrieshave surely not seriously consider how important managerial accounting is until they are face withdebts to repay to creditors, shareholders and the government.

Managerial accounting helps entities to plan, estimate, control and budget at the business levels to safeguard long-term sustainability for the company. In fact, Managerial accounting refers to the process and techniques that focus on the effective and efficient use of organizational resources to support managers and owners with their task. A simple example, could be taken from Vanuatu Beverage Limited, a company owned by a well-respected French Durand Family and is managed in Port Vila by three Durand siblings. Due to knowledge and skills obtain from managerial accounting has rebuild, improve and expand Vanuatu Beverage factory during the 2010 challenge face and 2015 destructive cyclone pam.

The challenge started in 2010, during that time old machines were in use almost worn down now and cold not yield to their complete strength. Beside the lack of properly trained people, human capital and poor management skills have contributed to an internal financial crisis which amounts big financial losses in excess of 200 million vatu in debts owed to interested parties and the government. In 2015 cyclone damage the country and struck the firm old production facility and roof collapsed. That puts the business in poor condition and bad place within the business and local economics. Nevertheless, the shareholders (which are the family members of the CEO) of the company decided to rebuild, improve and expand. These is where the importance of managerial accounting comes in, the company set new strategies and ideas to follow and new form of technology were being introduced to the factory to further improve the service and quality of the product. As a result, today Vanuatu Beverage limited is the biggest manufacturer in Vanuatu with its rapidly expansion.

Thus, managerial accounting is a very important feature are company must consider very careful in order to achieve its goals and objective of the business, to make greater expansion in the long run and much better performance for the business

3.How relevant managerial accounting to Pacific Island Countries, in my opinion, is because of managerial accounting's capabilities and functions. For instance, managerial accounting aids managers in short-term and long-term decision making. This is due to its ability to provide information on costs. With the provided information, managers can make decisions on how to decrease or cut costs and achieve cost leadership. In addition, it also aids in price making. Overall, it facilitates the effective use of resources, which in the end, increases customer value and share value.

With all these in mind, one can say managerial accounting is relevant to Pacific Island Countries as they too have companies that rely on information that are provided by managerial accounting in order to increase customer value and share value. For example, Solbrew Ltd, a local brewery in the Solomon, may use information provided by managerial accounting to make decisions on whether they should increase their production of beer or not. Make decisions on whether they should increase production on a particular product and less on others. Just recently, Heritage park Hotel manager, Mr Sanjay Bhargava released a statement that an estimated SBD3.2 million business loss due to COVID-19(LILOMO, 2020). This is also where managerial accounting comes in handy, and plans and strategies to compensates the loss in revenue. For instance, whether they will have to let go of some of their employees, although this is one of the toughest decision's managers have to make.

4.Managerial accounting is the practice of identifying, measuring, analyzing, interpreting and communicating the financial information to the managers of an organization to control the daily operations and performances of the business.Most businesses in the pacific island counties are managed by the managers appointed, thus theyuse this information to make decisions where to invest and where to reduce costs in order to obtain annual targets and profits.

Example; a profit making business collects relevant data of a period of time and uses these data to prepare financial statements. These are then reviewed and analyzed by the managers and decision makers who identifies irrelevant costs incurred and make decisions on how to remove or minimize them in the next financial period for better performance and maximum profit.