M ANAGERIALACCO UNT ING IN

T HE AREA O F CO RPO RAT E

RES PO NSIBILIT Y

INTRODUCTION OF THE TEAM

• Tereza Bieliková

• Alžbeta Buhajová

• Emile DeBlock

• Dominika Kolníková

CONTENT OF THE PRESENTATION

1. Introduction of the team

2. Introduction of the topic

3. Managerial accounting in general

4. IFRS Standards

5. Definition of GAAP

6. Tools used for CSR in Managerial Accounting

7. Summary

8. Sources

9. Vote of thanks

MANAGERIAL ACCOUNTING IN GENERAL

• Managerial accounting provides information about financial and economical situation of the

company to its managers, it is only used for internal purposes.

• Information from managerial accounting are used to determine if the company is meeting its

goals.

• Managers need this information in order to make decisions about how to improve the

company.

IFRS

• International Financial Reporting Standards

• issued by the International Accounting Standards Board (IASB)

• accounting framework in more than 120 countries

• European Union, Hong Kong, Australia, Russia and Singapore

• shareholders, management, and other monetary-related parties to non-monetary related

parties such as Non-Governmental Organizations (NGOs)

IFRS STANDARDS • First-time Adoption of International Financial Reporting Standards

• Share-based Payment

• Business Combinations

• Insurance Contracts

• Non-current Assets Held for Sale and Discontinued Operations

• Exploration for and Evaluation of Mineral Resources

• Financial Instruments: Disclosures

• Operating Segments

• Financial Instruments

• Consolidated Financial Statements

• Joint Arrangements

• Disclosure of Interests in Other Entities

• Fair Value Measurement

• Regulatory Deferral Accounts

• Revenue from Contracts with Customers

• Leases

• Insurance Contracts

IFRS FRAMEWORK

• the adoption of Framework for the Preparation and Presentation of Financial Statements (the

Framework)

• the users of financial statements are: present and potential investors, employees, lenders,

suppliers and other trade creditors, customers, governments and their agencies

• describes the objective of financial statements as ‘the provision of information about the

financial position, performance and changes in financial position of an enterprise

• The IFRS Framework serves as a guide to the Board in developing future IFRSs and as a guide

to resolving accounting issues

PRINCIPLES OF FRAMEWORK

• Relevance

• Faithful representation

• Comparability

• Verifiability

• Timeliness

• Understandability

• In the Framework, the reference is always to

the financial statements, meaning the

representation of the financial position,

financial performance and cash flows of an

entity that is useful to present and potential

investors, lenders and other creditors, who

use that information to make decisions about

buying, selling or holding equity or debt

instruments and providing or settling loans or

other forms of credit

• Corporate Social Responsibility can have a negative implication on the

accounting valuation of an organization because CSR activities are done at the

expense of the stakeholders where the cost of the CSR activities exceeds the

benefits of stakeholders (Moser, Martin, 2012)

• non-financial motives could include political incentives

GAAP INCLUDES PRINCIPLES ON:

•Recognition

•Measurement

•Presentation

•Disclosure

TOOLS USED FOR CSR IN MANAGERIAL ACCOUNTING ( A C C O R D I N G T O S O U R C E : “ C O N T R O L L I N G Z P ” )

1. Decision making management – when managers of the company decide and approve the implementation of CSR according the rules of Global Compact, the company have to declare an acceptation of GRI (Global Reporting Initiative) principles with appropriate certification and reporting – it is strategic decision. And company needs to take also strategic goals.

2. Strategy of CSR is a part of company´s global strategy. It is created according to approved strategic CSR goals. CSR strategy is usually made for 5 years. It is part of global company´s strategy, because whatever company does, it should be done economically and responsible. Strategy contains also indicators needed in GRI reporting.

3. Simulation of the CSR – before planning CSR company compares existing state and simulated required state based on the indicators of CSR.Methods of simulation: benchmarking is comparing company itself to recognized leaders of CSR and EFQM model –

4. Planning of CSR based on strategy and simulation using CSR indicators, Managerial Accounting Department creates a CSR plan for 1 year. It is part of global plan of the company.

5. Budgeting of CSR – the plan for 1 year is divided into several parts according to:organisation units – based on the place of formation the costs,shorter periods of the year – for example in the larger companies monthly.

6. Financial Accounting of CSR – everything that company does must be included in accounting, if it affects company´s economical situation.

7. Managerial Accounting of CSR – all items connected to CSR must be also in evidence based on: place of origin – organisation unit where the cost is originated, purpose – on what purpose were funds spent,more detailed evidence – inside of organisations units and according individual workers.In Managerial Accounting are registered: financial items (financial contribution for employees holiday for example),non-financial items (number of voluntarily worked hours like a part of employees volunteering).

8. Calculation of CSR – in the company with institutionalised CSR, the calculation system contains cost items of CSR. Managerial Accounting Department assemble calculations (planned, continuous, final) with the requirement for payment all costs, so it could from applicated calculationalsystem (including price policy) reach pleasurable trading income.

9. Indicators of CSR – Managerial Accounting Department (controlling department) monitors and evaluates indicators of CSR in every part of controlling CSR: primarily – directly set in concrete tool (for example in plan of energy consumption saving),secondarily – indirect set by impact that investment have on indicator (for example energetic efficiency of new lightening systems that company bought and accounted).

10. Monitoring of CSR – it monitors the state of: required item (in a calculation),partial indicator (in a budget),total aggregated indicator (in a plan).Effective monitoring of CSR parallelly signalises differences between reality and required state.

11. Reporting of CSR is a system of reports that Managerial Accounting Department uses for management of the company. According the structure of the reports Managerial Accounting Department provides reports according to binding:obligatory reports – annual statement on CSR based on GRI,optional reports – reports for management from the point of structure and time based on company´s choice. Optional reports are provided according the form of reported tool (strategy, plan, balance sheet, income statement, budget, etc.)

12. Control of CSR is important part of the whole Managerial Accounting within:planning period (control of fulfilling the budget for example),every Managerial Accounting tool (for example controlling of items in financial accounting).

GRAPH: CSR TOOLS IN MANAGERIAL ACCOUNTING

MODERN MANAGEMENT ACCOUNTING TECHNIQUES ( A C C O R D I N G T O A N I N T E R N E T S O U R C E B Y J O H N F R E E D M A N )

1. Standard Costing = method of recording accounting transactions. Afterwards you can analyze the

differences between the standard costs and actual costs.

2. Balanced Scorecards = tool based on performance that combines financial and non-financial measures.

This technique started in the 1990s and gives a comprehensive snapshot of firm or individual performance.

3. Real-time Inventory Management: In the past, companies used periodic or perpetual inventory systems.

In the last decade there was a huge change by the advent of RFID (radio-frequency identification. Due this

technique, businesses are able to track each individual inventory item throughout the company. Every time

the company scans the RFID tags, the accounting information system is updated.

4. Process Management: Nowadays management by exception can be applied much more efficiently by using

modern quality tracking techniques. For example: Now machinery can measure any unit that falls outside of

specifications and immediately remove the item from the assembly line.

SUMMARY

• Managerial accounting = The process of identifying, measuring, analyzing, interpreting and

communicating information to managers for the pursuit of an organization’s goals.

• IFRS (International Financial Reporting Standards) = set of international accounting

standards stating how particular types of transactions and other events should be reported in

financial statements.

• IFRS Framework will adopt these IFRS in many countries. The Framework serves as a

guide to the Board in developing future IFRSs and as a guide to resolving accounting issues

• GAAP (Generally Accepted Accounting Principles) = common set of accepted

accounting principles, standards and procedures that companies and their accountants must

follow when they compile their financial statements.

• Managerial accounting focuses on internal operations and gives managers the tools they

need to evaluate operations and make changes when needed.

SOURCES

• https://www.myaccountingcourse.com/accounting-dictionary/managerial-accounting

• http://vfgc.in/seminar2016proceeding/papers/SAHANA_S.pdf

• https://www.investopedia.com/articles/fundamental-analysis/12/international-financial-reporting-standards.asp

• https://www.iasplus.com/en/standards/other/framework

• https://www.accountingfoundation.org/jsp/Foundation/Page/FAFBridgePage&cid=1176164538898#section_1

• Tschopp, Daniel, and Michael Nastanski. “The Harmonization and Convergence of Corporate Social

Responsibility Reporting Standards.” Journal of Business Ethics, vol. 125, no. 1, 2014, pp. 147–162.,

www.jstor.org/stable/24033159.

• Management Dynamics in the Knowledge Economy, (online), ISSN 2392-8042 Vol.4 (2016) no.1, pp.7-30

• G. Dubcova. Controlling ZP (paper)

• Freedman, John. "Modern Management Accounting Techniques." Small Business - Chron.com,

http://smallbusiness.chron.com/modern-management-accounting-techniques-67384.html. Accessed 05

December 2018.

THANK YOU FOR YOUR ATTENTION!