SMBA FINANCIAL AND MANAGEMENT ACCOUNTING

The module aims to provide course participants with an understanding of the theory and
practical application of accounting in (a) the preparation of external financial accounts and
(b) internally generated management accounting information for decision-making and control
within organizations. The course attempts to develop skills in the analysis of accounting
data, as well as a good understanding of the underlying assumption on which the figures are
based.

To this end, lectures are interspersed with exercises and case study sessions. Reading and
practical exercises are provided to consolidate the topics covered during the day.

DETAILED BREAKDOWN OF THE COURSE

PART ONE FINANCIAL REPORTING

1 Accounting Framework.
 Purpose of the framework
 Qualitative characteristics of financial statements
 Measurement of the elements of financial statements
 Concepts of capital maintenance
 Summary of the Accounting Framework
2 Components of Financial Statements
 Statement of Comprehensive Income
 Statement of Changes in Equity
 Statement of Financial Position
 Notes to the Financial Statements

3 Preparation of Financial Statements

 Purpose of Financial Statements
 Responsibility for the preparation of financial statements

4 Statement of Cash Flows (IAS 7)

 Objectives of the Statement of Cash Flows
 Sections of the Statement of Cash Flows
 Cash and Cash Equivalents
 Cash flows from operating activities
 The Indirect method
 The Direct method

5 Ratio Analysis and Interpretation

 Categories of Ratios

PART TWO MANAGEMENT ACCOUNTING

ACCOUNTING FUNDAMENTALS

6 Accountingas an InformationSystem

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  Branches of accounting
 Financial Accounting
 Management Accounting, Cost Accounting
 Standards of Ethical Conduct

7 Classification of Costs
 Types of classifications
 Cost terminology

TOOLS FOR SHORT-TERM DECISION MAKING

8 C-V-P Analysis
 Assumptions
 The Traditional Breakeven chart

9 Marginal Costing and Decision making

 Pricing Decisions
 Special Order Decisions
 Make or Buy Decisions
 Limiting Factor Decisions
 Dropping a Product Line
 Shut Down Decisions

PLANNING AND FINANCIAL CONTROL

10 Budgeting and Budgetary Control
 Advantages and Problems of budgeting
 Pre-requisites of an effective Budgetary Control system
 The Master Budget
 Fixed and Flexible Budgets
 Behavioural aspects of budgeting

MANAGEMENT PERFORMANCE EVALUATION

11 Performance Measurement
 Objectives of Divisionalisation
 Advantages and Disadvantages of Divisionalisation
 The Return on Investment (ROI)
 The Residual Income (RI)

Reading List:
Collins Drury (2013) Management Accounting for Business 5thEdition
Horngren, Foster and Datar (2009) Cost Accounting – A Managerial Emphasis
13th Edition
T. Lucey (2008) Cost Accounting 7th Edition
Collins Drury (2015) Management and Cost Accounting 9rd Edition
Financial Accounting by F Wood (Volumes 1 & 2) 12th Edition

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