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BIBM703 Appropriate Understanding of Management Accounting System Assessment Answer


BIBM703 Semester 2 2020


Length:Maximum 3000 words (excluding abstract & references)


  1. The assignment must be typed and in double line spacing.
  2. Appropriate APA referencing must be used for ideas and direct quotes.
  3. You must submit a paper (hard) copy of the full assignment into assignment boxes and an electronic word document copy uploaded to turnitin  via Moodle. Only the paper copy will be marked.
  4. Keep a copy of the assignment and regularly save your work in case of unforeseen events such as computer failure or sickness.
  5. Problems of group dysfunction and low participation by a group member must be brought to the attention of the examiner as soon as they become apparent. Failure to complete the assignment in a group is a failure to complete the assessment and incurs a ‘Did Not Complete’ for this assessment.


This assignment aims to provide students with the opportunity to develop writing and research skills. In particular, you will engage in discussing practices to develop into a report to assess the case study organisation. You are required to form a group of people and discuss practices in the case with relevant literature. The expected learning outcomes of this assignment are:

  • Critique the role of management accounting in the contemporary business,
  • Discuss strategic cost and profit management across the business,
  • Discuss contemporary issues of performance measures,
  • Discuss and evaluate issues in assisting strategic decision making,
  • Evaluate management accounting research.



  1. Form groups of three to four people. Ensure one group member is nominated as a contact person. This contact person should submit by email a list of group members with contact phone numbers and email addresses by the end of week 6 to your tutor.
  2. Read the attached case study.
  3. Search and read appropriate literature on performance measures, management accounting control, responsibility accounting, budgeting, and allocation.
  4. Analyse and assess the case study and write a report of your findings. The report needs to include a discussion of the case, theory, findings, and recommendations.
  5. Your report needs to show an assessment including integration of theory and literature. A minimum of ten research journal papers are to be included. The report needs to include an introduction of the organisation, MaInTec and report concepts identified in the case study, and supporting literature, before concluding.
  6. Make sure ID numbers of all students participating in your group are recorded on the assignment.


Management Accounting Institute of Technology (MaInTec) is a tertiary provider of education specialised in organisation management of businesses. MaInTec receives funding to provide courses for students. Students also pay fees to enrol, and as other tertiary providers, MaInTec has chosen to participate in PBRF, an initiative by the Tertiary Education Commission (TEC) to assess tertiary institutions research and provide the institution with funds based on the assessment of research output from individual researchers from each institution.

MaInTec allocates funds for research to the Research Department that then allocates research funds to each teaching department from the overall research funds received. Some of the funds are provided for specific directions as stated by the Research Department that individual lecturers apply for, and the remaining funds are allocated to teaching departments based on performance metrics.

One measure of performance is the research output weight (ROW) for departments. For the next academic year the Research Department have set the following targets for departments:

  • An increase of 0.15 in ROW for all departments that achieved a ROW of less than 0.5 in the previous year
  • An increase of at least 0.1 in ROW for all departments that achieved a ROW between

0.5 and 1.0 in the previous year

  • No decrease in ROW for departments that achieved a ROW of more than 1.0 in the previous year

MaInTec intends to grow research performance and increase the research outputs of staff. More autonomy is going to be provided to departments so in the future heads of departments submit a broad plan of what research funds are to be spent on in the department for that academic year, and then the Research Department approve the budget. Every lecturer that gets 0.2 full time equivalent hours for research will submit regular portfolios to the Research Department. Lecturers with less than 0.2 full time equivalent hours for research will not be allocated any research funds by the Research Department, and these lecturers are also not entitled to submit portfolios to the Tertiary Education Commission.

The ROW is a measure of research value given the amount of time used to provide a research output. Research outputs include reports, conference presentations, and journal articles of the highest value. Given the type of output, a weight is then provided to each output. The weights range from 0 to 10 for a highly rated international journal article. Only outputs from lecturers with more than 0.2 full time equivalent research time are used to calculate ROW. The Head of the Research Department states “The ROW is the main measure to improve research quality 



In the present business scenario, it has been seen that organizations are using management accounting as a key concept to organize their financial transactions accordingly. It happens to be a well-organized technique that is based on a strategy to enable their contribution to the firm successful navigation of short to long-term challenges. However, it can assist the financial managers within a firm to make decisions to improve the productivity and earning capability of the organization. By using these correct accounting techniques one can easily identify, analyze, interpret, and communicate the data to managers to assist them to attain business goals. Similarly, MainTec wants to increase the research output as well as grow research performance of its staffs. Thus, they are going to provide a sufficient amount of capital or resources for the academic year. It has provided relevant information regarding the different streams that are going to be followed by each lecture to get a desirable ROW for the period. Further, the reports have covered with certain suggestions that are profitable for the research departments for the period.


In the modern financial situation, the organization is using an effective accounting system to record, summaries, and analyse the gather financial and non-financial transactions of the company. In an earlier time, it was quite challenging for the firms to manage their day to day operation by using the help of traditional system because it is mostly recorded manually. The chance of mistakes is high as well as does not have any transparency in the reporting process (Kaplan, and Atkinson, A2015). Thus, the overall focus of this project is to develop an appropriate understanding of management accounting system from the given case scenario. The aim is on critiquing financial techniques and use of literature to analyze the MainTec is looking to increase the performance of its staffs and offer a reliable capital budget for the research departments. On the successful accomplishment of the project, it would be beneficial for the MainTec to take creative value by effective decision-making. The issues that are related to generating high ROW for the research departments have been identified with respect to the company.  The literature and theory related to the appropriate management accounting issues found in Maintec is been discussed accordingly. 


Overview of the organization 

Maintech is a tertiary provider of education specialized in organization management of the firm. It tends to receive capital to offers courses for skilled students. They also used to pay a fee to enrol, and other tertiary providers. It happens to be a Tertiary education commission which is liable to assess tertiary institutions research and also provide the firm with capital-based support on the evaluation of research findings from the individual research. The primary role of the firm is to allocate funds for the analysing the research departments to each teaching departments from the entire research capital sources. However, MainTec tends to grow its research performance as well as wants to enhance the research outputs of its staffs. Therefore, more autonomy is been going to be offered to departments so that in the future head of departments could not get affected. The topic management of accounting is applied to utilize the financial resource of an organization. It means the finance budgeting is somehow based on the chosen subjects of research. It is all about decision-making, organizational control in financial as well as financial planning for a profit-seeking firm. Apart from this, MainTec tends to identify process, accumulate, dimension evaluation, and understand the use of management techniques to develop strong accountability of the organization resources.

Role of management accounting in the contemporary business

In the modern business scenario, the role of management accounting involved providing financial data to managers within the firm. It can also enable these managers to manage, take a decision, and perform control operation accurately. However, managerial accounting consists of the presentation of financial data for internal purposes that are to be used by an organization in making a key business decision in the future. For example, MainTec is planning to increase the ROW from the previous is a major decision that is made to increase the performance of the research departments wisely. Generally, an accountant used to work for customers, private businesses, and other legal bodies. Their primary responsibility is to record, summaries, and assist the selected investments, budgeting, and planning goals accurately. It can help them to remain in competition with the wide number of future opportunities in the firms (Micheli and Mari, (2014). 

In categorising the cost accounting that aims to record the cost which is incurred in a firm as well as financial accounting that is related to preparing financial statements for the decision-makers. There are equally useful for the internal and external stakeholders those are active partners in the company day to day operations (Lavia López and Hiebl, 2015). Here are the certain major role of management accounting in the modern era also consists of providing data that can support below-mentioned factors: 

Strategic management: The manager of MainTec is based on developing a strategic partner in the firm so that future goals and short-term obligations can be controlled wisely. Apart from this, the business owners used this accounting to reviews the cost related to these activities to make sure that the company could not lose its relative cost stability in the market. 

Profit management: The accountant is a key partner in developing a strong ethical financial practice of business decision-making as well as generating high profit margin for the firm. It ensures that a business must earn a net operating profit for the given period. Usually, profit management deals with the earning capacity of the organization (Burkert, Mehta and Oyon, (2014). 

Theory and Literature 

Appropriate management accounting issues

In the viewpoint of, Fullerton, Kennedy and Widener, (2014), it has been seen that certain challenges are associated with the management accounting that can lead to impact the overall performance of a MainTec. One of the biggest problems for management accountant currently is the preparation to deal with the globalization in the local and international market. The intense pressure of allocating sufficient capital arrangements for successful management of research departments is always been challenging for MainTec. Some of the other issues are related to the adaptability that is based on certain guidelines which exist for management accounting procedure. The techniques which are applied to a particular process is used accurately so that outcome can be profitable enough for the MainTec. This could be a beneficial option for the organization to deal with the problems. The adaptability of these tools could make comparison difficult for the managers. 

Similarly, Nixon and Burns, (2012), state that reliability is another issue that is usually emphasis on the timeliness of data to allow business owners to make an appropriate decision in the future with the MainTec. However, in case an organization needs this data for a decision that is planned already by the MainTec, then capital budget management is a key for the growth of the MainTec. GAAP/IFRS compliance also impacts the outcome of the financial reports that are prepared by the firm. It can provide more reliable costing information to decide by an alternative way of allocating cost to particular product costs. 

Performance measures 

According to the Beams, Bettinghaus and Smith, (2016), it is a numeric result of an evaluation that shows how well a firm is attaining its goals for the future. It comprises of different metrics and application of accounting facts that could be used as a benchmark in business sectors for either internal or external purposes. For a MainTec, it is expressed, whether research department targets are reached as well as a way of generating high profit and return for its investors to the next academic year. A wide range of ROW performance measure is taken into account to almost every research value that are given the amount of time used to provide a research outputs. However, the focus of this research is to determine different issues that are related to the low capital margin for the concern subjects are analyzed effectively. The outcome of the study allows that research output report, conference presentation, and journal article of the highest values is taken into account for MainTec. Especially, ROW and earnings are reliable to market value, whereas the superiority of ROW stills remains a challenging concept of the MainTec.. On the other hands, head of research department states that the ROW is the primary measure to improve the research quality at MainTec (Melnyk, Tobias and Andersen, 2014). Any specific measure lies below a trend lines or not be able to meet a pre-determined standard would be subject to increase management attention in Maintec performance. 

Management accounting control 

In the words of Schaltegger and Csutora, (2012), it can be determined as appropriate torture by a MainTec to compare the performance to pre-determined standards, plans, and goals in respect to determine, whether performance is in line with these previous capital margin for the research department. It has been seen that a MainTec used to adopt the management control system to keep a vigilant eye on the performance level of each research departments. However, the system used to communicate the goal of a business to lectures that everyone works towards achieving them as quickly as possible. It happens to be determined as an integral part of the global research department by which the data is been collected, processed, analyzed, and shared for the future planning process to the MainTec. On the other hand, it tends to provide a clear purpose of a weights range from 0-10 for a highly rated international article. Only outputs from lectures with the high 0.2 equivalent research is taken into account to control the flow of research activity in the Maintec.  

Responsibility accounting 

According to Modell, (2015), it an appropriate system of control, where responsibility is been assign for the control and management of costs. The MainTec are made liable for the effective use of capital information during the research process. It has been seen that responsibility accounting consists of internal accounting and budgeting for each liable person within a MainTec. The main purpose is to assist in effective planning and control of MainTec research department’s responsibility centres. In the case of MainTec set targets for the specific departments there is no decrease in ROW for departments that attain a ROW of over 1.0 in the last years. Charles, (2019) tends to recognize different responsibility centres through the Maintec planning process. It tends to reflect the action of each of this research issues identified by allocating a specific revenue and cost to the one that is having the potential responsibility in the session. 

Budgeting and allocation in accounting 

In the MainTec case examples, a budget is said to be a financial plan that is consists of both financial and non-financial data. It is more obvious nature that is estimated total revenue and expenses incurred for the period by the Maintec is around $284000. However, it identified the presently available capital; provide a reliable estimation for different departments along with the equivalent full time lectures hours for the past two years. Concerning Bhimani and Willcocks, (2014), budget businesses could be used to measure performance against the investment as well as make sure that funds are available for taking initiatives that can support by research departments to teaching department for the coming academic year. It happens to a plan that intends to figure out estimated operation earning, and expenses made by a MainTec for a definite period. In the other words, for a MainTec budgeting process is an essential step for preparing a detailed statement of financial results that are estimated for an academic period. The total Maintec equivalent full time lectures compared to a total with the Row for the departments. It lies between the categories of the departments as provided by Tertiary education communication for the present period. 

Case study issues 

According to the given case example, it has been seen that MainTec Company intend to measure the performance research output weight (ROW) for the concern departments. For the next period, the R&D has set the various targets for departments such as to increase of 0.15 in ROW for all departments that tend to receive a ROW for less than 0.5 in the last years. Apart from this, an increase of 0.1 in ROW for all departments that tends to attain a ROW 0.5 to 1.0 has been planned accordingly. MainTec tends to grow research performance as well as enhance the research results of staffs accordingly. The Research department is responsible for allocating 0.2 full-time equivalent hours for research by lecturers that would not be assigned for any research capital by the concern departments. The organization is planning to improve the research quality at MainTec by making changes to the ROW data. The measure would be used to assess overall performance across researchers as well as the other key departments. The other important issues which are identified from the case study is the low amount allocation for the subjects to teach full-time hours as compared to the total funds at MainTec. 

Issues in assisting strategic decision-making

In the given case example, it has been seen that strategic decision is said to be an action plan that is concerned with the entire environment of MainTec in which the entire firm operates. It happens to be an important process of evaluating a course that is based on long-term goals and vision. With the clarifying the MainTec big image goals, the management has the opportunity to align their short-term plan with an economical consistency. For an individual manager, the capability to make a correct ethical choice that relies on individual and MainTec characteristics. It includes various criteria for a decision such as ease of implementation, cost, risk level, increase in sales, and ROI (Tessier and Otley, (2012). On the other hand, rationality in decision-making is an important process for making the right choice between the alternatives available to the MainTec. The process of rational decision-making intends to make favour logic and objectivity over the subjectivity research. It tends to bring a complete structure thought process to the act of deciding the right facts that are liable to generate a more suitable outcome to the MainTec in measuring the performance of the research departments.

Some of the issues related to creativity in information tend to influence the performance of the departments. It allows the decision-maker to more fully appraise and understand the actual problem of ROW in the given situation. However, lateral thinking intends to move away from the linear methods that intend to admit in ration decision-making.  A financial manager could be creative in strategic option if they are conceptually aware of the issues and its relevance to the environmental factors. Similarly, they might have knowledge of key problems areas as well as the ability to take potential action to deal with these issues. 

Evaluation of management accounting research 

From the given case example, it has been evaluated that the ROW is a measure of research value provide the amount of time taken into account to deliver a research output for the departments in MainTec. The weight range lies between 0-10 for a high rated international journal. Only the facts gain from lecturers is having more time equivalent to the actual research time with 0.2. However, management accounting task needed the accountant to decide to collect data to use in future planning of an organization. The common goal of the analysis is to understand the concepts of MainTec accounting system that are used in calculating the ROW of the research departments. These techniques could be effectively used to control and make an appropriate decision in selecting the correct measure that can provide a high amount of positive results to the departments. According to the amount of capital allocated by the research departments to teaching departments for the next academic period is $284000. This fund is assigned based on two years of performance. Apart from this, management accounting for the full-time lecturer previously is ranked as 3.4 with a ROW of 0.17. The department has kept a low budget for the research of management accounting by 10000. On the other hand, an operation and supply chain management department have low full-time lecturer hr in the earlier two years period with 0.6 to 0.9 respectively along with the same budget allocation. Thus, it can be said that the entire department’s allocation of funds is being marked based on its previous year’s performance. 

Structure of Argument

Brigham and Ehrhardt, (2013), argue that an effective budgeting plan formulated by the MainTec to organize the operation of research departments tends to provide a positive result in the academic year. However, certain key compliances can lead to creating a negative influence on the success of the teaching departments for the next year. Similarly, the use of performance measurement control in the research departments for the two consecutive periods tends to affect the ROW of the Maintec. 

From the entire project reports, it has been reviews that the Maintec need to take certain major steps that can be crucial enough to increase the accountability of the research departments. Some of the important facts related to the growth of the departments are being taken into account effectively. The management accounting departments need to be funded high because so that the students can lead to maximum techniques to manage its financial transaction. The ROW for these departments is relatively balanced as compared to other departments. The issues related to the Maintec performance must be measure based on the historical data that can lead to control the future complication in the research. 

The evidence gathered from the MainTec case example has shows performance of lecturers with 0.2 full-time equivalent research hours that can help a top-rated international article to gain weight of 10 achieves a ROW of 0.5. Therefore, it has been articulated that departments with less than 0.2 hours for research tends to affect the research capital by the research departments and its lectures are also not been entitled to submit the portfolios to the Tertiary education commission. It happens to be a major source to improve the quality at MainTec.


Throughout the entire project report, it has been articulated that management accounting is a wide concept that tends to be used by an organization to manage its financial transactions accurately. It can help the investors to make a well-organized investments plan that can increase the performance as well as productivity in the global market. However, the given case examples have determined a wide range of issues that are related to the budget allocation to research departments. It can be controlled by generating the ROW more than 0.2 hours for lectures to the next academic year. The performance of research departments tends to be improved once they get a desirable amount of funds for each department so that they can offer quality learning in to the future. Therefore, it has been suggested to use appropriate management accounting techniques to cope with the issues that are faced by Maintec for the given period. 

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