According to the description of the work, the main responsibility of the post is financial planning. This assessment is based on the fact that the company emphasize financial planning as the core role of the accountant. In particular, the company first indicates that one of the undertakings will be preparation and the consolidation of reports describing financial plans. The second role is the creation of a financial planning process for the company. The last responsibility is assisting in the process of financial planning integration. From a personal understanding, management accountant deals with other financial undertaking such as budgeting and assets management.
The management accountant must have a range of personal and professional skills to ensure proficiency and effectiveness at work. Essentially, a management accountant must have strong ethics and integrity. Bearing in mind that s/he is meant to handle financial planning for the company, integrity and ethics are crucial personal skills that ensure confidentiality (Drury 37). They should also have proficient management skills that help to minimize time wastage and maximize the output per unit of time. As such, the company will meet deadlines when it comes to implementation of projects. Further, time management will prevent derailing other offices which might need to use the financial planning systems. Apart from that, the accountant should be highly organized to provide well-structured work that is easy to understand and implement (Epstein 78). This should be reinforced by creativity and innovativeness. In this case, the management accountant should have the ability to plan the financial system differently (Groot & Frank 39). Innovativeness ensures that the company uses highly efficient system which keeps it above competition. Otherwise, incompetent management accountant may incapacitate the company’s ability to compete. In principle, creativity is the key aspect to every growing business especially in a competitive environment.
Notes for Director’s Meeting
Difference between Financial and Management Accounting
There are various differences between financial and management accounting.
- Financial accounting provides information which is publicized and used by shareholders, regulators and investors among others (Kieso & Jerry 87). On the other hand, management accounting provides information that is kept confidential for the use of organizational managers.
- Financial accounting is highly interested with the historical operations and use of funds in the company (Horngren 67). On the other hand, management accounting is interested with the future possibilities and strategies. This is one of the reasons why they are involved in financial planning of the company.
- Financial accounting is most based on cases which have happened in order to provide the basis of decision making. On the contrary, management accounting relies on models that have a significant level of abstraction. The abstraction enables the managers to generic decisions within the organization.
- Further, financial accounting evaluates information using the standards of financial accounting. These standards are usually the conventionally agreed standards and best practices. Management accounting, on the other hand, evaluates information based on the requirements and the needs of the managers (Needles & Marian 63). In most cases, the information is analyzed using management information systems.
- Lastly, financial accounting is more precise as compared to management accounting. This difference is evoked by the fact that financial accounting seeks to use accurate calculations in decision making while management accounting utilize general information to provide a nearly appropriate basis of decision making.
Roles and Qualifications of the Assistant Management Accountant
The assistant management accountant will have several roles that will be drawn from the general roles of management. These roles will be as shown in the following list of responsibilities.
- The assistant management accountant will be charged with the responsibility to keep accurate records of all financial planning procedures, assets benefits, and taxes as required by the accountant. These roles have been one source of bulkiness and the assistance will enhance increased output of the department.
- Prepares the documentation of any information as directed by the accountant in relation to the designing of the financial management plans. This will include the delivery of such documents to managerial offices that use the information in decision making.
- Countercheck data and enter it in the company’s system to enable the management account to analyze it easily. The countercheck will ensure that accuracy is ensured at the point of data entry and collection.
- In cases where the management accountant is working with a team. The assistant will be responsible for coordinating the logistical and operational aspects of the team. These logistical and operational aspects include resolving minor and insensitive issues regarding the roles of the team members and conflicts that may occur in the process of the undertaking.
- Lastly, the assistant will be responsible of performing general office roles that include writing memos and letters, circulating them, answering phones, and filing important documentation. This includes ensuring that the senior accountant gets all required documentations on time in order to be organized and structured.
The qualifications of the assistant management accountant for the company will include the following standards shown on the list.
- Degree in Bachelors of Commerce (Accounting option) at minimum
- One year experience in accountancy
- Basic computer skills such as typing
- Team oriented personality
- Time conscious
Value of Management Accounting
Management accounting helps the company to have a well-structured financial planning system. This enables the organization to plan for the future rather than overemphasize on the past performance.
Let x represent profit
- Probabilities for both Pricing for profits greater than 1,500,000
Units = (Fixed Expenses + Target Profit) / (Unit Contribution Margin)
For Price 170
(22,000,000+1,500,000) / (170-35)=174,074 units
P (x>1,500,000) = 0.3
For Price 190
(27,000,000+1,500,000) / (190-35) = 183,871 units
P (x>1,500,000) = 0.1
- Probabilities for Pricing for breakeven at 0
Break Even Point= Fixed Cost/Unit Contribution
Break Even Point = 27, 000,000/155=174,195 unites
Z Scale= (174,194-180,000)/18,547=-0.31
P (Z<0.31) = 0.62
This implies that there is a probability of 0.62 of getting breakeven at the profit 0 Euros.
- Probabilities for both pricing to achieve the 4,000,000 profit
For price at 170
Number of units bought to attain target profit=(Fixed expenses + Target Profit) / (Unit contribution)
(22,000,000+4,000,000) / (170-35)=192,592
P(X>4,000,000) = 0.1 since the company has to sell more than two hundred units.
For price at 190
(22,000,000+4,000,000) / (190-35) = 200,000
P (X>4,000,000) = 0.1
Whether the above Answer is Helpful
The above answer will not be helpful because the probability of getting a profit greater that 4,000,000 is 0.1 for both 170 and 190 Euros.
Application of the Techniques to Large Multinationals
These techniques can be applied in determining the fixed cost since it increases as demand rises. The multinationals can use the technique to make sure that the cost of advertisement does not surpass the fixed cost since that would contravene the use of the above technique.
Drury, Colin. Management and Cost Accounting. 8th ed. Andover: Cengage Learning, 2012. Print.
Epstein, Marc. Advances in Management Accounting. Bingley, U.K.: Emerald, 2014. Print.
Groot, Tom, and Frank Selto. Advanced Management Accounting. Harlow, England: Pearson, 2013. Print.
Horngren, Charles. Management Accounting. 6th Canadian ed. Toronto: Pearson Canada, 2012. Print.
Kieso, Donald, and Jerry Weygandt. Intermediate Accounting. Hoboken, NJ: Wiley, 2012. Print.
Needles, Belverd, and Marian Powers. Financial Accounting. Mason, OH: South-Western Cengage Learning, 2012. Print.