Internal Controls, Management Accounting, And Decision Making: A Study

Internal controls – Bank reconciliations and cash

1.The following are the relevant workings:

2.Part i:

There is an absence of any sort of internal control in the given case. This is mainly due to the reason that the accounting for all of the transactions which pertains to cash should be dealt in with utmost seriousness. If cash is not available, then the company may not be able to meet its day to day expenses. For the purposes of avoiding in too much idle cash, cash must also be utilised in a way so that it helps in the generation of income such as the interest. This helps in the prevention of cash due to theft or fraud (Lumen learning,2018).

For the purposes of having a control over the cash, the person who issues the tickets and the person that collects cash for that ticket must be different. This means that the cashier and the person who issues the tickets must be different. There could be online payments for the tickets.

Part ii:

If they wanted to misappropriate cash, then they could easily state that few of the tickets though were issued but were refunded.

3.To: M A
From: Z

Date: October 10, 2018

Re: Importance and role of management accountants

Context Line: the purposes and the role of management accountants and that of financial accountants

I do understand the fact that your goodself have bene looking for way to cut down the expenses but there is a huge difference between the work that is performed by the financial accountant and the work that is performed in by the management accountant. The financial accountant deals with the tracking in of the financial information about the company but the management accountant deals with the financial and the nonfinancial information which relates in with the company. The work of the financial accounting is used in by the internal management but the work of the management accountant is used in by the other users of the management. The financial accountant reports in his work publicly whereas the management accountant reports his work to the company and is therefore, confidential. The financial accountant deals with the monetary information but the management accounting deals with both the monetary and the non-monetary information. The financial accountant deals in the providing in of the information about the day to day functioning of the company but the management accounting deals in with the providing in of the information which helps in the evaluation of the performance of the company (Wall street mojo, 2018).

It is mainly due to these reasons, it is important for the company to have both the financial as well as the management accountants.

4.The cloud based management accounting technique is the technique which deals with the saving in of all of the work on cloud which is based on internet.

The following are the advantages of the technique:

One of the greatest advantages of the cloud based accounting is its accessibility which means that one would just need in a device and an internet connection through which one would be able to access in the records, reports and the receipts. The best thing is that one would not require in to download and install in any software, one just needs an internet connection. One just would no require to download in any software and install the same into the system. It’s easy to work in to collaborate in into the business with the partners and the employees.

iii) Prepare the journal entries to correct any errors made by Bargain Buys Ltd, and to record transactions that have not yet been entered into the company’s accounting records.

Cost: there is another use wherein the cloud accounting is very much perfect for the start-ups, entrepreneurs who are just starting in their businesses and the small businesses. All one just requires in the setting up of a personal account wherein he could upload in the financial data and learn the way the same could be used. There is just a payment of a monthly subscription. And one is good to go. There are also easy tutorials which could be studies that would help in understanding these functions of the technique. The technique though consumes a fee but there is a saving of electricity, fewer employees for information technology and this also does not require in the investment or the resources for the purposes of setting up of the officer servers. The cloud proves to be a better option.

Security serves as the most important thing for any company. This way all of the sensitive information and the most vital information which pertains with the strategic decision making for the upper most management could be saved all in one place and without any human interference which would save in its integrity and confidentiality. The cloud based system also addresses in many of the safety concerns that have the higher and a uniform security standards. This helps in the reduction of the redundancies too for all of the data. There are many of the seamless security upgrades that entails no cost for the users.

Scalability: the cloud grows in with the business, hence, this is able to cater to the needs of a small business and also that of a big business. This allows in the businesses to grow and collaborate with the businesses. Hence, the accounting of cloud is very much accessible and also cost effective and has a secure solution which is able to integrate into the current structure of the business (Digit books, 2018).

It is capable of being used anywhere and anytime. It can be hosted anywhere and so, there is no need to worry in about downloads which could prove to be time consuming and the updates. The invoices could be accessed in from anywhere even by using in the latest mobile phone. This helps in giving an additional amount of flexibility and also gives in a peace of mind.

• All of the business information gets saved in on to the cloud which ensures that the person viewing the financial statements are all up to date and inform about the current financial situation about the company. The use of the traditional methods would mean scrolling down on the pages and looking at the out of date management reports.
• The cloud based technique helps in building in the better relationship technique with the accountant. As the owner of the business, business being your baby, one would still need to collaborate in with his accountant to make sure that all of the financials are very much up to date. This is especially when it comes to the filing in of the tax returns of the revenues of the company.
• The cloud based management accounting would mean no paper work for the company. All of the expenses, receipts, invoices are straight online and there is no need to keep these invoices. One could use the technique to import in all of his previous documents into the software. This helps in the minimisation of the risk of the manual error and this would result in a much faster and a more carefree method of keeping up of the finances.
• The cloud based technique helps in the creation of an ecosystem that fits into each and every business. This helps in the delivering in of all of the business needs. There are many software’s that could be used and would serve the business. The choice of the software would depend upon the needs of the business but the software would help in the improving in of the efficiency of the business.

The core advantage of this lies in the fact that there is a huge volume of data that could be used for the purposes of storing in the data as compared with the traditional servers. And also all of the historical information is saved on to them which recoverable. Suppose, there is an emergency which takes place, the back-ups are readily available. This could make or break the business. But the information stores in on to the cloud would still retain in all of the information pertaining with the business. This technology gives a greater amount of accessibility when compared in with the other traditional methods. The business owners could work their way even when they are not in office.

2. Internal controls – cash

These packages are cheap and allows in the businesses to have the reduced amounts of the overheads. These could also be updated in some real time so that the system does not have to wait for long and the waiting time for nay new version introduced is actually nil. This technology is constantly revolving and changing for the better with each passing day (Absolute accounting, 2018).

In the nutshell, cloud accounting is something towards which each and every company is moving. Since it leads to a greater efficiency, safety and accessibility.

Cloud accounting is the way the accounting industry is heading. This is no surprise due to the benefits offered though user accessibility, efficiency and safety. To make the best decision for your business, ensure you evaluate all the options available and ensure your data is sufficiently protected before heading straight to the cloud (The profit books, 2018).

5.Part i:

Part ii:

Part iii:

6.Part A:

Any prudent person would go in for a change in the option since he would want to choose the door which has car behind itself. And so, I also changed my option.

The following is the relevant chart:

Part ii:

I got the answer right by chance.

60% of the friends got the answer correct and the rest got incorrect.

Part B:

It would not be a prudent and a wise decision since there is still a 2% chance that he does not have that disease.

Part C:

The answer would be red since there are maximum number of red coloured marbles in the urn. Even if 5 red marbles are taken out from urn, even then the majority of the marbles are red.

But if the Gamblers fallacy is applied, then it is quiet probable that the next guess would be black marble. Even when 5 red marbles are taken out, still the Gambler’s fallacy would hold good (Valentine, 2016).

Part d:

After working on the above stated scenarios, it has become apparent that the humans think differently. There are few humans that would think that the previous results would hold good for the near future too but then there are few of the managers that may think that the opposite of the previous derived results would hold good for the near future.

7.

Conclusion: the above table shows the total amount of the profit that the company would earn under each one of the alternatives. Since the option wherein division 3 is eliminated entails maximum amount of the profit for the company, it must be chosen.

Hence, the first option in the above table must be chosen.

8.Cash budget:

References

Advantages and disadvantages of cloud accounting – Absolute Accounting Solutions Ltd. (2018). Retrieved from https://absoluteaccounting.co.nz/advantages-disadvantages-cloud-accounting/

Cash and Internal Control | Financial Accounting. (2018). Retrieved from https://courses.lumenlearning.com/sac-finaccounting/chapter/cash-receipts-and-disbursements/

Erkins, A. (2018). The Benefits of Accounting in the Cloud. Retrieved from https://www.digitbooks.com.au/the-benefits-of-accounting-in-the-cloud/

How Cloud Accounting Can Benefit Your Small Business. (2018). Retrieved from https://www.profitbooks.net/cloud-accounting-benefits-for-small-business/

Padhy, B. (2018). Financial Accounting vs Management Accounting (Top 11 Differences). Retrieved from https://www.wallstreetmojo.com/financial-accounting-vs-management-accounting/

Valentine, N. (2016). The gambler’s fallacy – explained. Retrieved from https://www.thecalculatorsite.com/articles/finance/the-gamblers-fallacy.php

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