Global Management Accounting Principles Quiz Managerial Accounting #2410 (2 points) [Fill in the blank) Management accounting is the heart of quality because it brings to the fore the most relevant information and analysis to generate and preserve value. (8points] List the 4 principlesand outcomes included in the Global Management Accounting Frinaples (1 point each] Frinaples Outcome Frindplet Outcome Frindplet Outcome Prinaplet Outcome Bonus: (1 point) The Global Management Accounting Principles were prepared by the a. [CIMA] Chartered Institute of Management Accountants b. [AICPA) American Institute of CPAS . Both the CIMA and AI CPA d. Neither the CIMA nor the AICPAINTRODUCING THE GLOBAL MANAGEMENT ACCOUNTING PRINCIPLES" Quality decision-making has never been more important - or more difficult. Competition is relentless as new innovations daily disrupt the status quo. Torrents of information increase complexity and impulse takes over insight as organisations struggle to keep pace The Global Management Accounting The Principles are intended to be universally Principles were created for this era of business, applicable to help organisations large and Management accounting is at the heart of quality small public and private, extract value from decision making, because it brings to the fors the increasing volume of available information. the most relevant information and analysis to They are aimed at chief executives, chief finance generate and preserve value. The Principles officers and members of boards of directors guide best practice. They were prepared by the who have oversight of their organisations' Chartered Institute of Management Accountants performance. Investors and otherstake holders (CIMA) and American Institute of CPAS will also find them useful. (AICPA) - which together represent more than 600,000 members and students in 177 countries. They can be used to support the development, The Principles were developed in conjunction execution and refinement of strategy through the with CEOs, CFOs, academics, regulators, performance management system, as well as to government bodies and other professionals from support the core activities of the management 20 countries across five continents, accounting function. The full document provides guidance on the application of each Principle to 14 different practice areas, ranging from financial strategy to risk management. Definition: Management accounting is the sourcing, analysis, communication and use of decision-relevant financial and non-financial information to generate and preserve value for organisation s. A survey commissioned by CIMA and the AICPA of 1,100 senior executives from 35 countries found that 89% believe a stranger partnership with finance in the decision process will help them better manage their organisation s over the coming years.THE FOUR PRINCIPLES AND OUTCOMES: Principle: Communication provides insight Principle: Impact on value is analysed that is influential Outcome: Value Outcome: Influence Management accounting connects the Management accounting begins and ends organisation's strategy to its business model. with conversations. The Principles have been This Principle helps organisations to simulate designed to help organisations out through silos different scenarios to understand their impact on and encourage integrated thinking leading to generating and preserving value. better decision-making Principle: Stewardship builds trust Principle: Information is relevant Outcome: Trust Outcome: Relevant Accountability and scrutiny make the Management accounting makes relevant decision- making process more objective. information available to decision makers when Balancing shortterm commercial interests they need it. The Principlesprovide guidance on against long run value for stake holders identifying past present and future information, enhances credibility and trust. including financial and non-financial data from internal and external sources. This includes social environmental and economic data. The Global Management Accounting Principles COMMUNICATION INFORMATION IS PROVIDES INSIGHT RELEVANT THAT IS INFLUENTIAL Help organisations plan for Drive belter decisions and source the inomation about strategy and its needed for creating execution at all levels shalegy and toches "or execution GLOBAL MANAGEMENT ACCOUNTING PRINCIPLES STEWARDSHIP IMPACT ON BUILDS TRUST VALUE IS Ac lively manage ANALYSED relationships and resources Simulate different scenarios so that the financial and that demons hate the couse-and non-financial assets, reputation and effect relationships between inputs value of the organisation are proced and ou go mes