Management Accounting and Control
Designing and using management control systems in decentralized organizations: control frameworks and levers of control, responsibility centres and the controllability principle, budgeting for control and its behavioural effects, ROI, residual income and EVA with the effects of asset measurement, transfer pricing methods, the general rule, capacity constraints, negotiation and dual pricing, multinational transfer pricing under the arm's length principle and section 247 of the Income Tax Act, the balanced scorecard and strategy maps, non-financial and sustainability measures including greenhouse gas emissions and internal carbon prices, incentives, bonus plans and agency theory, and a capstone control system design, with ethics under the CPA Canada codes, following one invented Canadian manufacturer throughout.
ACCT-321 Year 3 3 credits 12 lessons · 5 h 37 min
Offered by HSM University · Accounting
This is the Canadian version of this course. See the American version.
What you'll learn
- Explain the purposes of management control systems and apply the main frameworks, including objects of control and levers of control, to an organization.
- Assign responsibility for results through cost, revenue, profit and investment centres, applying the controllability principle and segment reporting.
- Evaluate the use of budgets for control, including target difficulty, participation, slack and alternatives such as rolling forecasts and Beyond Budgeting.
- Calculate and interpret return on investment and residual income, and explain how each affects divisional managers' investment decisions.
- Calculate economic value added, explain the main accounting adjustments, and analyse how asset measurement affects investment centre measures.
- Apply the general rule to determine minimum and maximum transfer prices, and compare market-based, cost-based and negotiated methods.
- Analyse transfer pricing under capacity constraints and evaluate negotiation, dual pricing and two-part tariffs.
- Explain the arm's length principle and Canadian transfer pricing rules under section 247, including documentation, penalties and their conflict with management objectives.
- Design a balanced scorecard and strategy map, and test the cause-and-effect links between measures.
- Select non-financial and sustainability measures, including greenhouse gas emissions and internal carbon prices, and assess their use in control.
- Apply agency theory to the design of bonus plans, bonus banks, long-term incentives and clawbacks, anticipating managers' responses.
- Design an integrated management control system for a new strategy, testing it with numbers and evaluating its fit and side effects.
Course content
12 lessons · 5 h 37 min total · final exam
- 1 Management control systems: purpose and frameworks 33 min · quiz
- 2 Organizational structure, decentralization and responsibility centres 30 min · quiz
- 3 Budgeting for control and its behavioural effects 27 min · quiz
- 4 Measuring investment centre performance I: return on investment and residual income 30 min · quiz
- 5 Measuring investment centre performance II: economic value added and asset measurement 29 min · quiz
- 6 Transfer pricing I: methods and the general rule 29 min · quiz
- 7 Transfer pricing II: capacity, negotiation and dual pricing 27 min · quiz
- 8 Multinational transfer pricing: arm's length and section 247 27 min · quiz
- 9 The balanced scorecard and strategy maps 26 min · quiz
- 10 Non-financial and sustainability performance measures 26 min · quiz
- 11 Incentives, compensation and agency 26 min · quiz
- 12 Capstone: designing a management control system 27 min · quiz
- E Final exam 20 questions
Requirements
Recommended background. You can start any course at any time.
Description
Designing and using management control systems in decentralized organizations: control frameworks and levers of control, responsibility centres and the controllability principle, budgeting for control and its behavioural effects, ROI, residual income and EVA with the effects of asset measurement, transfer pricing methods, the general rule, capacity constraints, negotiation and dual pricing, multinational transfer pricing under the arm's length principle and section 247 of the Income Tax Act, the balanced scorecard and strategy maps, non-financial and sustainability measures including greenhouse gas emissions and internal carbon prices, incentives, bonus plans and agency theory, and a capstone control system design, with ethics under the CPA Canada codes, following one invented Canadian manufacturer throughout.
Part of the Business stream, typically taken in year 3.