John Edward Pangilinan

BS Accounting Information System

Project Charter 
A project charter is a formal, typically short document that describes your project in its entirety
— including what the objectives are, how it will be carried out, and who the stakeholders are. It
is a crucial ingredient in planning out the project because it is used throughout
the project lifecycle.
Many projects operate without a project charter, even multimillion dollar projects.  But the
formal authorization of the project by the performing organization can be important to ensure the
lines of authority are clear and identify what the organization is thinking when creating the
project.  I can think of some project issues that could have been avoided if the project manager
and/or sponsor would have created one.

The project charter is the document issued by the project initiator or sponsor that formally
authorizes the existence of a project and provides the project manager with the authority to apply
organizational resources to project activities.  It documents the business needs, assumptions,
constraints, the understanding of the customer’s needs and high-level requirements, and the new
product, service, or result that it is intended to satisfy, such as:

1. Project purpose or justification

Stating the business need that the project addresses can give everyone direction and clarity
regarding project decisions and build a foundation of strong leadership from the performing
organization.  When everyone knows why the project is being performed, they can be laser
focused on the end result.
2. Measurable project objectives and related success criteria.
A statement of the project’s goals and criteria for success creates a strong statement of what
the company is expecting from the project.  It ensures everyone is working toward the same
goal and is clear on what those goals are.
3. High level requirements
There are several components which have a place within the project charter (i.e. above the
project) as well as the project management plan (i.e. within the project).  The project
requirements as envisioned by the organization can be placed within the project charter to
make it clear what the organization is thinking by creating the project.
4. Assumptions and constraints
Many project issues arise from unclear assumptions, and many of these assumptions are
clear to the management of the organization before they create the project.  Therefore, they
should be stated within the project charter and thereby passed down to the project
management plan.
5. High-level project description and boundaries
A high level scope is generally defined, if not on paper than in executive’s minds, well
before the project becomes a project.  Writing this scope into a project charter makes it
crystal clear what the project’s creators are thinking.  It should not, however, be considered
a final project scope.
6. High-level risks
Most projects have one or two major risks that define the project.  For example a structural
failure for a bridge overpass project, or website payment software that contains security
glitches.  These are the risks that are fundamental to the project’s success and are generally
thought about before the project becomes a project.  Therefore, they should be included
within the project charter, but they should not take the place of a project risk
analysis within the project management plan.
7. Summary milestone schedule
Most projects have milestones that are defined by executives before the project becomes a
project, whether explicitly stated or implied.  For example a mine access road needs to be
completed before construction equipment can move in.  These milestones define the project
and should therefore be placed into the project charter, however they do not take the place
of a detailed project schedule during the project planning stage.
8. Summary budget
All projects are created in the context of organizational budget constraints.  This context
should be communicated within the project charter in order to pass on the budgetary
constraints into the project planning phase.
9. Stakeholder list
Most projects have one or two major stakeholders that need alot of attention.  For example,
a project for a new coal mine that requires a golf course to be moved (a real project of
mine) needs to make sure it works very closely with the golf course.  Although the project
charter is not the appropriate place for a comprehensive list of all stakeholders, the ones
that are of primary importance to the project should be identified.
10. Project approval requirements
Because most projects require approval from external authorities, those approvals which
will have a major impact on the project can be explicitly stated within the project charter. 
 For example, in the mine building project mentioned above, the government approval for
mine construction is so integral to the project that it could be mentioned in the project
charter.  The project charter is not the place for a comprehensive list of approval
requirements, however.
11. Assigned project manager
As stated in the PMBOK above, one of the primary purposes of the project charter is to
assign responsibility to the project manager.  Therefore, the project manager should be
named and their authority to use organizational resources should be made clear.
12. Project Sponsor
The project sponsor is one level above the project manager, often an organization contact
for the project.  They should be named and their responsibilities in regard to the project
made clear.

1. Project Statement of work - A statement of work is a document routinely

employed in the field of project management. It is the narrative description
of a project's work requirement. It defines project-specific activities,
deliverables and timelines for a vendor providing services to the client. 
2. Business Case - Information included in a formal business case could be the
background of the project, the expected business benefits, the options
considered (with reasons for rejecting or carrying forward each option), the
expected costs of the project, a gap analysis and the expected risks.
3. Agreements - The project management agreement is the agreement between
the project manager and the employer or owner. The project manager acts as
the agent of the owner and provides the services usually rendered by a
contractor who performs the tasks.
4. Enterprise environmental factors - Enterprise environmental factors are the
influences not under the control of the organization or the project
management team that affect the organization, the project, and its outcome.
 Every organization has to exist and work within the EEF. These influences
may have positive or negative impacts on your project constraints, though
often the impact is negative. Enterprise environment factors can be either
internal or external.
5. Organizational Process Assets - Organizational Process Assets are the plans,
processes, policies, procedures, and knowledge bases specific to and used by
the performing organization.
6. Expert Judgement - Expert Judgment is a technique in which judgment is
provided based upon a specific set of criteria and/or expertise that has been
acquired in a specific knowledge area, application area, or product area, a
particular discipline, an industry, etc. Such expertise may be provided by
any group or person with specialized education, knowledge, skill,
experience, or training.
7. Facilitation Techniques - Facilitation techniques involve getting people
together to create new knowledge. As the facilitator, the Project
Manager needs to encourage all ideas, resolve conflicts between contributors
and achieve the goal of the exercise – be it a set of requirements or
a Project Charter.

Say that you are a Project Manager of a consulting company. You are
tasked to create an AIS for Company Y. With this, determine each
stakeholders and define their (a) role, (b) influence over the progress and (c)
relevance to the project.

Good management is achieved through a relevant and timely

information to decision-makers, and other users of accounting information.
Responsibility for the development of the economic entity, the overall
economy and their performance is primarily managers and equally,
accountants and auditors. Obviously, they join the users of accounting
information, which should be responsible for the use of the information they
possess.
 Stockholders have the right to know how a company is managing its investments
and has a right to know the new changes in the system and how it will affect the
company routine. They have the power to continue or to stop the operation. They
are the one who supposed to approve the project.
 Federal and State Governments require tax returns and other documents often
prepared by accountants
 Banks or lending institutions may use accounting information to guide decisions
such as whether to lend or how much to lend a business
 Investors will also use accounting information to guide investment decisions