Question 1
Financial reporting is a centerpiece of a company's current financial condition. The financial community then relies on the financial statements to be accurate in order to make financial decisions. The premise of responsibility for accurate reporting is then that of management's. How then do you see management's accomplishing this role and by what methods? Refer to examples, especially from your reading and study this module.
Respond to this...The Management of a company is ultimatelyresponsible for the financial statements of a company. So if the management and leaders of a company are weak and don't have good management it can be a problem. I'm not saying that they need to know how to prepare the Financial statements, BUT they need to know how to hire the right people to do the job. In addition to hiring the right people for the job they also need to have systems in place to make sure the financials are correct. These systems need to have checks and balances and divide responsibility so that not one person has to much control or power over adjusting the financial statements. This can be more easily done in a large company that have accounting departments that have 20 to 100's of employees. The problem is that there are millions of smaller businesses who only have 1 or 2 people in the accounting department. In these situations the owners/management need to learn more and really be a part of the accounting process otherwise there could be errors, fraud or even theft. So again Management is ultimately responsible, but to make their jobs as managers possible they need to surround themselves with the right people and make sure they have systems in place with checks and balances.
Respond to this...Financial reporting is the core centerpiece of a company's current financial condition. It is management's responsibility for accurate reporting. A company needs to have a strong management team. I do feel that it start with good ethics, if a person is easily tempted it can cause chaos for the company, but that is not nearly enough. The company need to have strong procedures in place and proper control and dual control. There needs to be a constant check. I feel that no one person should have all of the power/control. The management team also needs to be checking reports and verifying balances.
Question 2
Variances represent the difference between actual results and the expected results of an activity or measure. Expected results are often referred to as budgets. One of the key methods that cost accountants use to measure performance is the variance of actual performance against that of the budget for the period.
Describe an example of an activity that you would use variance analysis as a means to measure its performance over time. Include in your description which risks the use of variance analysis would pose to ensuring the example stays on track.
Respond to this...Machine maintenance is an activity that could be measured through a variance analysis. In order to evaluate performance manager needs to determine benchmarks through independent standards, competitors, or past period data. From this information a budget for machine maintenance costs is determined. The budget will include expected number of preventative maintenance scheduled, anticipated repairs based on usage, hours per repair and wage per hour. This information is then compared to actual maintenance costs and variances are identified and analyzed. The more detailed the budget, the more information managers can use to improve performance and costs.
However, it is important that managers have extensive knowledge on cost drivers and which costs are controllable and which are unavoidable. For instance, suppose a significant variance is found between budgeted cost per labor hour and actual cost per labor hour. It may be assumed that employees are working inefficiently or do not possess necessary skills for the job. But managers which thoroughly investigate all components of the cost variance may find that these variances are strictly due to contractual wage increases which directly impact cost per labor hour. Therefore, the risk of variances analysis is that an unfavorable variance is where mangers should focus. However, it is important to remember that a favorable variance in one area may be offset by an unfavorable variance in another and further research and analysis may be necessary to make smart decisions.
Question 3
Imagine you work for a small manufacturing company that makes designer faucets for kitchen and bathroom remodeling. They have a small design team, a sales group, and a manufacturing facility. Most sales are conducted directly with remodeling contractors. Senior management has started reading about knowledge management and has asked you to explore opportunities for improving knowledge.
What do you think are the most important knowledge assets for this company? How could each of the following employee groups benefit from knowledge management? Designers and engineers, Sales department staff, Executive Management.
Respond to this...This company may be small but how it manages knowledge has the potential to help it stay strong and flourish. Each team member has essential knowledge which helps them proceed through their daily tasks and get the job done.
There are a number of reasons why a small company such as this would want to create a policy and begin practices knowledge management going forward. The way this company shares its knowledge will make or break it. The sales group will work directly with contractors to find out what type of design is needed for the project. I think tactic knowledge is very important to this company as there is a lot of creativity involved in the selling and creation of designer products. A knowledge management system could keep previous projects and notes for all team members to use together and create a system that will transition smoother as they can easily be referenced. This could then begin the process of changing knowledge from being in a mind to documented explicit knowledge. These should also be accessible on mobile devices to show off and discuss to customers and once again get a better idea of what to expect.
I think every group would benefit from knowledge management as shareable knowledge is useful throughout the firm. Processes would be streamlined, more accurate budgets could be created, and communication will become habit. These habits will help employees identify how experience thinking and explicit knowledge drive decisions and keep the flow of design and work being done moving forward.
Executive management always has a challenge when dealing with knowledge. In a sense, with custom design work they gotta pay to play and be able to understand investing into creativity costs time and money. In the end they will happy to invest in a program for the company which reduces the amount of their most valuable resource (the laborers) who are trying to design, sell, and manufacture the products which make this company unique and drive business.
For this company I would recommend looking into using Atlassian as it supports goals such as content share between departments with ease. Users with little experience will be able to easily contribute and the transition should be relatively painless with the products and support offered. https://www.atlassian.com/knowledge-management-software