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QUESTIONS ON TOPIC 1QUESTION 1 (Jun 2018) The rapid spread and acceptance of globalization and the enormous developments in information technology, has led to dramatic changes in the business environment. These changes have brought new challenges not only to business but also to business education. ...

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QUESTIONS ON TOPIC 1 QUESTION 1 (Jun 2018) The rapid spread and acceptance of globalization and the enormous developments in information technology, has led to dramatic changes in the business environment. These changes have brought new challenges not only to business but also to business education. Business schools that prepare future managers in different disciplines are responsible for closing the gap between the skills acquired by its graduates and the required skills by the global markets. (Ehab and Sherif, 2003) Required: Explain three (3) ways on how management accountants can respond effectively to the changes in business environment, as mentioned above. (10 marks)

QUESTION2(Jan2018) In order for the Malaysia economy to remain competitive and to have sustainable future growth, Malaysia must be ready to evolve with the new capabilities and new sources of competitiveness, which is by relying and understanding the knowledge for value creation. (Mahfar and Omar, 2004)

Required: Briefly explain the stages of evolution of management accounting that have occurred since 1960s until the new millennium by referring to the International Federation of Accountants (IFAC) model. (10 marks) 1965 = The MA focus to profitability. During this stage, the main purpose was to distinguish management accounting information for planning management processes and controlling them. With the information, managers can induce a better decision for the company. Decision analysis and responsibility accounting method are formed to help managers in choosing the better course of action or create strategic business units. √ 1985 = The MA focus is waste reduction. Global competition that increased due to Japan’s economic progress, caused changes in international trade. Aspiration to accommodate new business environment, became main priority for companies. Companies started seeking better quality and costs reduction, at the same time. The aim was basically to reduce waste from production because essentially it would reduce the expenses incurred, thus increase in profit. √ 1995 = The MA focus is resource management and value creation. During this stage, companies faced major business uncertainty due to technological innovations. Therefore, companies started implementing management accounting methods, which assess economic value and try to identify the factors of drives that could increase shareholder value. √ 2000 = The MA focus is accountable strategic resource management. The managers will embrace uncertainty and challenges and cooperate with others to seek creative and innovative solutions while ensuring integrity. By effectively manage the risk, the managers can effectively allocate the resources and benefits to the stakeholder which will increase the stakeholders’ value and sustainability of a company. √ every stage above, u should mention any MA techniques developed during respective decade

QUESTION 3 (Jun 17) Johnson and Kaplan (1987) in their controversial book have pointed out the issue of inappropriateness of conventional management accounting techniques which offered little capacity for providing useful and timely information for better decision and control in the contemporary environment of rapid technological change and vigorous competition. (Sulaiman, 2016) Required: Briefly discuss four (4) responses to the changing in business environment in management accounting during the 21st century. (10 marks Increased global competitiveness.  Increase reliance on strategic alliances.  Rising global mobility of labour.  Rapid advances in technology resulting in new business models and an increase emphasis on innovation as a source of competitive advantage.  Domestic competitive pressure resulting from regulation and privatization of service provider

Question 4 (Jan 19) Management accounting can be categorised into traditional and contemporary management accounting practices. Traditional management accounting practices are financially and internally oriented, shortterm focused and involved arbitrary cost allocation. In contrast, contemporary management accounting practices were developed to emphasise more on quality, speed, cost effectiveness, competitiveness and customer satisfaction. (Nuhu, Baird &Appuhamilage, 2017) Required: Explain briefly the main reason for the changes in management accounting over the last decades (4 marks) The main reason for management accounting to change over the decade is due to changes that occured in business environment that implies uncertainty and risk. Both external factors (environmental) and internal factors (relating to the organisation concerned) have influenced the recent development of new management accounting systems and techniques. (2 marks) ( Other acceptable answers: increased global competitiveness, increased reliance on strategic alliances, rising global mobility of labour, rapid advances in technology, etc. according to exhibit 1.5 of LangfieldSmith)

QUESTION 5 (Jun 2019) A well-managed organisation focus their objectives and strategies on building and maintaining sources of competitive advantage. To be an effective contributor to strategy, the management accounting information should be shaped around the organisation’s sources of competitive advantage. (Langfield Smith, 2012) Required: Explain four (4) main roles of management accounting in formulating and implementing strategies in order to remain competitive and relevant in the modern business environment. (10 marks) Providing information to help managers to formulate strategies and to implement these strategies. In the design of the management accounting (MA) system, it is important to tailor the information it provides to support business or competitive strategy. If the strategy is a cost leadership the focus should be on accurate product costs and cost control.  Planning and controlling the MA information is needed for setting the direction of the organisation and ensuring that operations are according to plan. These systems provide the framework for effective resource management to generate customer and shareholder value and should focus directly on the aspects of business strategy and techniques for improving the organisation's competitive advantage through modern process improvement and cost management, with an emphasis on reducing costs while also enhancing customer value.  Assessing and evaluating the performance measurement system - the management accounting is responsible to improving the organisation performance to satisfy both customer and shareholder value assessing the performance measuring system currently adopted by the businesses. Should encourage the adoption of both financial and non-financial performance measures in assessing performance.  Involving in critical decision-making process - Many decisions made by managers occur frequently so information to support these decisions, such as budgets, performance reports and product costs, is prepared on a regular basis.  Motivating managers and other employees towards organization's goals - Employee needs to be motivated by promoting them with better rewards and incentives if they able to achieve the goal congruence. (4 points with brief explanation x 212 marks = 10 marks...