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In recent times, the dynamic business environment has seen increasing emphasis on enhancing value to customers, quality time as a competitive element, service industry growth, deregulation, globalization, ethical and environmental dimensions of business, etc. All these are because of a drive to create and sustain competitive advantage where strategic management accounting plays a significant role.

Strategic decisions like investments or acquisitions require discovery of sustainable profitability drivers and growth drivers. This requires a different kind of analytical framework to discern through information revealed by enterprises. This course is designed to orient the students to learn these skills.

Very often, in functional based cost management system, it is not possible to garner the benefits because the information may not be timely, accurate and detailed. This has resulted in emergence of activity and strategic based cost system. The course starts with an overview of the functional based cost management system, then moves to activity and strategic based cost management system and brings in the paradigm of decision making in between to demonstrate that decisions might change when the quality of information changes. In the process the students learn to use the concepts for decision making under both systems and appreciate the emphasis on the two systems based on the preference.

This course attempts to take the students closer to using financial & cost information for real world decision making process.

2. Student Learning Outcomes:

· Be able to reformulate and analyse Financial Statements
· Be able to relate financial information to macro level variables
· Be able to use cost and financial information as input for strategic decisions

3. Required Text Books and Reading Material:

i) Advanced Management Accounting by Robert Kaplan

ii) Financial Statement Analysis by Stephen H Penman

iii) Handouts to be given from time to time

4. Session Plan:

Session	Topic	Issues to be Discussed	Links	Reading Material	Cases
1-7	Sustainable profitability and growth analysis	Reformulation of financial statements Profitability analysis Growth analysis Off balance sheet liabilities Relating analysis to other information		Chapter-7 to 12 of Financial Statement Analysis by Stephen H Penman	Microsoft corporation EDS Nike & Reebok IBM
8-11	Understanding cost systems, Cost driver discovery and cost estimation	MIS: Which one to choose? Variable costing or total costing? Cost segregation & estimation, use of statistical techniques Cost structure and operating leverage, market imperfections and CVP analysis, Relevant cost and decision making: when does the long run start?		Handout	Bohemia Industries Beta company Berkshire Threaded Fastners Company Amazon.com case
12 & 13	Activity based & strategic cost systems	Traditional costing vs. ABC Problems of unit-based overhead rates, ABC framework and ABM		Handout
14 & 15	Strategic cost management	Basic concepts, value chain perspective, life cycle cost management, target costing, JIT manufacturing and purchasing and impact on cost management system		Handout	Case to be announced
16	Market variance analysis and control	Sales, Profit, Market share & size analysis		Handout
No session has been allotted as thus portion has already been covered in core course	Decentralisation	Responsibility accounting, performance evaluation and transfer pricing
17	Quality cost management	Cost of quality and reporting, cost management and quality		Handout
18	Productivity measurement and control	Productive efficiency, Partial and total measurement, activity change and process efficiency		Handout
19	Pricing and profitability analysis	Basic concepts, policies, legal system and pricing, measuring profit, segmental profit, limitations of profit measurement		Handout
20	ROI & EVA Balance scorecard	Performance measurement		Reference book	Outsource Inc.

5. Evaluation

It shall be done through term examinations, project evaluation and quiz. The weightage for different components is as under:

Quiz (surprise): 30%

Project: 30%

End Term: 40% (Portion for End Term: Entire course)

All examinations will be under open book system. The students can refer to any material they like. However, they cannot use their laptops or any communication devices.

6. Academic Integrity:

Policy of the institute as detailed in students’ manual of policies shall apply.

Created By: Alora Kar on 02/03/2015 at 11:33 AM
Category: EDIP14-T-III Doctype: Document