Vol. 38 (Nº 24) Año 2017. Pág. 21
Marina KUZMINA 1; Bibigul AKIMOVA 2; Gulnara AMANOVA 3; Saule SAPARBAYEVA 4; Abdulla ERZHANOV 5; Altynsara SADIYEVA 6; Assem KAZHMUКHAMETOVA 7
Recibido: 06/03/17 • Aprobado: 20/04/2017
RESUMO: In international practice, the regulation of management accounting is carried out similarly to the regulation of financial accounting and financial reporting: USA Institute of Management Accounting develops around 60 recommendations for management accounting. An analogue of such recommendations in Russia — is the "Methodological guidelines for organizing and conducting management accounting", developed in 2002 by management accounting questions Advisory Board under the Russian Ministry of Economic Development. In Kazakhstan, there are no official documents on the organization of management accounting, although in practice business management accounting elements are widely used. This paper conducted analysis of foreign and Russian guidelines on management accounting that showed their fundamental differences in the target settings, users and tools. Development of standards of management accounting in the future will greatly facilitate procedures for the development of methodology and techniques of management accounting in the business activity of Russian and Kazakh companies. In order to regulate the professional activities of accountants, analysts, and due to the lack of standards of management accounting in the Russian Federation and the Republic of Kazakhstan, there is a recommendation of the development of company inside standards for management accounting, the key element of which will be managerial accounting policies. |
ABSTRACT: En la práctica internacional, la regulación de la contabilidad de gestión se lleva a cabo de manera similar a la regulación de la contabilidad financiera y la información financiera: EE.UU. Institute of Management Accounting desarrolla alrededor de 60 recomendaciones para la contabilidad de gestión. Un análogo de tales recomendaciones en Rusia - es el "directrices metodológicas para la organización y la gestión de la contabilidad de gestión", desarrollado en 2002 por las cuestiones de contabilidad de gestión Consejo Consultivo bajo el Ministerio ruso de Desarrollo Económico. En Kazajstán, no hay documentos oficiales sobre la organización de la contabilidad de gestión, aunque en la práctica los elementos de contabilidad de gestión empresarial son ampliamente utilizados. En este trabajo se realizó un análisis de las directrices extranjeras y rusas sobre contabilidad de gestión que mostraron sus diferencias fundamentales en la configuración de objetivos, usuarios y herramientas. El desarrollo de normas de contabilidad de gestión en el futuro facilitará en gran medida los procedimientos para el desarrollo de metodología y técnicas de contabilidad de gestión en la actividad empresarial de las empresas rusas y kazajas. Con el fin de regular las actividades profesionales de los contadores, analistas y debido a la falta de normas de contabilidad de gestión en la Federación de Rusia y la República de Kazajstán, hay una recomendación del desarrollo de la empresa dentro de las normas para la contabilidad de gestión, De los cuales se contabilizarán políticas contables. |
In the western practice, management accounting regulation is similar to the regulation of financial accounting and financial reporting. So, appreciating the role of management accounting, in developed economies it is seen as part of the corporate standards, regulated in relation to the characteristics of the particular organization. Institute of Management Accounting of The United States of America developed management accounting standards similar to standards of financial accounting and reporting. Around 60 recommendations for management accounting are developed till present, integrated into five categories, which in contrast to IFRS are recommendations, not requirements, i.e. their use is not mandatory, but desirable, as the development of the leading specialists in management accounting can significantly improve the efficiency of business management (Table 1).
Table 1. Provision to Management Accountanting
Category |
The number of standard |
Brief description |
1 Goals |
5 |
A series of provisions that give a general idea of what is the management accounting and reporting, characterizes the degree of competence and standards of ethical behavior specialists in management accounting, content on training courses |
2 Terminology (glossary management accounting) |
1 |
Contains terms and definitions, which are regarded as most relevant for the use of experts in management accounting |
3 Concepts |
1 |
Explains the basic concepts of management accounting |
4 Practice and Technology |
42 |
Contains the identification of recommendations, measurement and optimization of costs, allocation of indirect costs; Reflects the methodology for assessing the effectiveness of the business and the development of indicators to measure; Considers the practical quality of management, risk management, benchmarking, value chain analysis, etc.; Makes recommendations on introduction of modern technologies of business, etc. |
5 Management accounting activities |
7 |
Contains recommendations on the formation of statements, advices on the establishment of information exchange about report formats, timeliness of supply, as well as consideration of the re-engineering of financial functions, its tools and techniques to enhance effective accounting operations and improve the quality of information exchange |
Developed by authors
The structure of the management standards, presented in Table 1, indicating, perhaps, their practical rather than the theoretical orientation. Most of the standards (49 of 56) are devoted to the practical recommendations on the use of innovations in the theory and methods of management. So, there are some standards 4T "The introduction of a process-based cost management (ABC costing)", 4V "Effective Bench-marking", 4Z "Tools and methods of environmental accounting for business decisions," etc. Attempts to create an analogue of such provisions are made in Russia since 2002. Advisory Board of the management accounting with the Russian Ministry of Economic Development developed "Guidelines for the organization and conduction of management accounting, which contain the most common approaches, rather than specific recommendations, so the problem remains unsolved (Advisory Board under the Russian Ministry of Economic Development, 2002).
In present Kazakhstan in the scale of the republic, there are no the official documents developed on the organization of management accounting, while in practice large and medium-sized businesses, in accounting services, management accounting elements are used actively. In the country, management accounting mostly presented by consulting services. Consulting - kind of business in which the corporate client seeks advice or help from independent experts (advisors, consultants) to address one or more pressing tasks. In practice, the consultants are ready to assist in the administrative, economic, financial and investment activities of the organization, strategic planning, optimization of company's overall functioning (Kapustin, 2000).
Management consulting is intellectually capacious business that has a very important impact, both on corporate governance and on national development (Akhtamberdiyeva, 2012). However, in Kazakhstan, consulting as a sphere of professional service has lack of development due to some problems with the specifics of the Kazakh market and the mentality of its members.
There are the following problems in the field of management accounting in Kazakhstan:
Increased competition in the domestic and global market requires constant updates and balanced organizational structures, business processes, systems and management practices. At the same time a very high risk of a wrong decision of not changing anything with consequences of delays in the adoption of the necessary changes is very flawed, and often - fatal for the development of the organization in the face of constant change, conflict and self-determination. Not just the assets, rights and brands of the organization, as a social group, creates financial flows. The old administrative approaches do not work, which resulted in a "crisis management" universally recognized by the west. In the new information conditions of business and policy, it is vital to have professional accountant-analyst, specifically studying the experience of the best companies and owning a modern means and methods of budgeting, forecasting, organizational design, and methodology to create new, creative values in cost management (Nurov, 2011).
Colin Drury (2012) notes that over the past decade, many organizations of industrial and service sectors collided to the heavy condition changes, where their business operates. Many business people have to work in a global market with a very intense competition, which led to the decline of the state regulation in parallel with the growing competition from foreign companies. The emergence of new technological innovations, the expansion of consumer demands contributed to a significant reduction in the life cycles of many types of products. Form this the company put customer satisfaction in first place in the list of priorities of its operation, which is carried out corresponding to adaptation of new management approaches, changing production systems and to actively financing new technology. Such changes have a significant impact on all management accounting system (Hongren, 2007).
Thus, all abovementioned once again confirms that the development of regulations on management accounting will greatly facilitate procedures for the development of management accounting methodology and techniques of its performances for practical implementation in the business activity of Russian and Kazakh companies.
Learning standards have revealed that in western practice in order to reflect the essence of management accounting, its objectives and tasks wide approaches are used that requires the accountant analyst to prepare financial reports for non-management groups of external users of information, such as shareholders, creditors, regulatory agencies and tax authorities (Hongren, 2007).
Thus, the SMA 1B «Objectives of Management Accounting» regulation refers to the process of identification, measurement, accumulation, analysis, preparation, interpretation and presentation of financial information used by planning, evaluation and organization management to ensure the optimal use of resources of the enterprise and the completeness of their account (Averchev, 2011).
Analysis of target systems of management accounting, allocated by the SMA 1B regulation and methodological recommendations (Methodical recommendations of the Ministry of Economic Development, 2002) shows (Table 2) that despite the first glance of having lots in common, a careful study demonstrates that there are significant differences.
One of the fundamental differences is that in the methodological guidelines unlike regulations on management accounting name only internal users as an information consumer and describes by types of information provided to managers at three levels: for management seniors; for structural management leaders; for specialists of structural units.
Table 2. A comparison of targets management accounting
Signs for comparison |
SMA 1В Regulations |
Guidelines on the organization and conducting management accounting |
Definition
|
The process of identification, measurement, accumulation, analysis, preparation, interpretation and presentation of financial information used by management in planning, evaluation and management of the organization to ensure optimal use of enterprise accounting and the completeness of their resources. |
The process of identification, measurement, accumulation, analysis, preparation, interpretation, and the provision of financial, production, marketing and other information, based on which the company's management can make operational and strategic decisions. |
The purpose of accounting
|
Ensuring representation in all levels of management information required for the planning, evaluation and operations management; safeguarding of assets; interaction with stakeholders outside the organization; Participation in the management - the adoption of strategic, tactical and operational decision-making and assistance in the coordination of efforts across the enterprise to ensure the coordinated work to comply with the essential interests |
Providing a full range of information to organization executives on the actual, planned and projected performance of the enterprise functioning as an economic and production units (including the data representation for the enterprise as a whole, as well as by structural and industrial divisions, responsibility centers), as well as the necessary information about the external environment in order to be able to make informed cost management decisions |
Duties
|
Planning Evaluation Controlling Ensuring reliability of financial statements Preparation of the external reporting |
Ensuring the implementation of management accounting systems; Coordination and adjustment of management accounting system functioning; Providing continuous interaction and dialogue between the involved departments and experts; Ensuring vertical coherence |
Types of Activities
|
Reporting: An Interpretation Resource management Development of information systems Technology implementation Reconciliation;administration |
Accounting organization resources Monitoring and analysis of financial and economic activity Planning Prediction and forecast of evaluation |
Processes
|
Identification Measurement Accumulation Analysis Preparation and interpretation Interaction |
Identification, measurement and data acquisition Analysis, preparation and interpretation of information Development and implementation of information technology systems MA System Administration |
Developed by authors
SMA 1B regulation does not excrete internal users categories, but only states that the management needs information for planning, evaluation and management of the organization to ensure optimal use of enterprise resources and completeness of their accounting and external users - information that is formed in the form of financial statements. Then the full text of the provisions and instructions of this distinction is highlighted.
Authors believe that the expansion of the functional authority of experts on management accounting in the Russian Federation and in the Republic of Kazakhstan shall be carried out in this direction. Accountants-analysts should be involved in the process of developing the principles and methods of accounting on the basis of which external reporting is formed. Moreover, one of the main responsibilities of Management Accountants must be the preparation of external reporting in accordance to the generally accepted accounting practices, or other appropriate means for a group of users who do not participate in the management, such as shareholders, creditors.
The basis of the activities of Management Accountants should be the implementation of preparatory activities related to the formation of statements in order to meet both internal and external needs of information on past and future events and circumstances. Accountants need to provide reports to managers on time, including information and forecasts necessary for the adoption of solutions that meet enterprise goals. These reports can include information on financial, physical and human resources, as well as the markets and the regulatory environment in which businesses operate. In addition to the internal reporting, accountants should ensure the provision of appropriate information in the form of external management reporting to shareholders.
Of course, from the total of the activities and responsibilities of management accountant external users should be given no maximum attention in aspects of the preparation of information for non-management groups, but the presence of this type of work as a separate component of the activity should be the principle setting.
In order to regulate the professional activities of Management Accountants and in the absence of standards of management accounting in the Russian Federation and in the Republic of Kazakhstan, the development of so-called internal standards for management accounting is recommended. Especially in recent years as the holding structures use such standards extensively for the control of financial and economic activity of the enterprises of the holding.
It is well known that in this case, the accounting policies and other standards of management accounting should have corporate status and should establish the procedure and principles of accounting for all segments and types of activities of the holding, taking into account their specificity, to be approved by the leadership of the holding company and to be mandatory for all enterprises, belonging to the holding structure. Only through such approach a system of management accounting standards can be build, providing the necessary and adequate management information to holding management and directors of the enterprises of the holding.
Managerial accounting policy will include such aspects as organizational, technical and methodological. The organizational part will reflect the ways of organizing the process of functioning the accounting-analytical services, in the methodological part - ways of generating information in order to draw up management balance sheet and the management report on profits and losses, as well as the preparation of information for groups of administrative decisions, whereas technical part will give answer to the question which technical means necessary for the functioning of the management accounting system. On some issues, managerial accounting policy will coincide with the accounting policies in the field of financial accounting, according to some - vary, but the accountant analyst task is the task of minimizing the differences in the approaches to the optimal integration of accounting systems.
Thus, the current management accounting system should include:
- The reasonable structure of the in-house control on the centers of financial reporting, business processes, business segments;
- The estimates and budgets for the entire management structure with the instructions executing on their formulation and implementation;
- The chart of accounts of management accounting, adapted to the structure of the in-house management;
- The methodological guidelines for the conduction of managerial accounting in accordance with the harmonized chart of accounts;
- The forms of internal statements and guidelines for their preparation, reporting and analysis;
- The methods of valuation costs, accounting and analysis of deviations from the norms of the performers with the necessary instructions;
- The methods of calculation based on direct and total costs to the distribution of expenditures by function, executing instructions;
- The methods of transfer pricing, executing instructions, flow of documentation.
In other words, all of the abovementioned elements should be reflected in management accounting policy. In authors’ opinion, the organizational accounting policy section should include:
- The financial structure of the organization and its projection on the organizational structure, power and structure of the service, which will be engaged in management accounting and control, standards of flows of documentation;
- The technical section – the ways of use of accounting automation (single automated system for financial and management accounting, but with a different chart of accounts or different software products);
- The methodologically – the ways of use of chart of accounts (standalone or integrated system), methods of evaluation of assets and liabilities, the method of calculation of production costs and pricing, formats, budgets and internal (management) reporting system of accounting and analytical indicators for strategic, tactical and operational management procedures of management control (Akimova, 2015).
In Table 3, authors consider the set of elements of management accounting policy specifying the procedural documents, in which the carried procedures and the results will be described.
Table 3. Elements of managerial accounting policies
Elements of accounting policies |
Regulatory documents |
Result |
1. Organizational section of accounting policies |
||
The organizational structure of organization
|
The position on the organizational structure Job descriptions, reflecting the redistribution of functional responsibilities of employees |
Defining the organizational structure of the enterprise, the main constituent units, their functions and activities. Matching bases of structural solutions for building basic architecture of all the subsystems of management accounting, including budgeting subsystem |
The financial structure of the organization |
Regulations on financial structure
|
Selecting responsibility centers as part of the enterprise. Classification of centers (costs, revenues, profits, marginal income, investment) |
Budget-financial structure
|
Regulations on budgeting; Regulations on Remuneration |
The projection of the financial structure on different budgets Qualifier budgeting (MDD, CFB, natural-cost budgets) |
The powers and structure of the service management accounting and control |
Regulations on the Management Accounting and Control Management staff instructions |
Responsible for maintaining management accounting
|
2. Technical Section of accounting policies |
||
Internal flow of documentation standards
|
Regulations of interaction of divisions in the system of production and management |
Schedule of flow of documentation
|
Description of data structures for complex automation of management accounting |
Technical task |
Regulations prepared for approval |
Formation of a management of chart of accounts |
Work plan of accounts of management accounting
|
Codifier levels of analytical accounts The relationship of accounts of financial and management accounting |
Description of interaction with the accounting (financial) statements |
The position of the interaction of chart of accounts of management accounting and accounting |
Correlation of management accounting and financial reporting |
3. Methodical section of accounting policies |
||
Methods of assessment of assets and liabilities
|
Regulations on Management Accounting Policy |
Selection of the method of valuation of assets and liabilities; choice depreciation methods of fixed assets; selection of current assets flow valuation methods |
Method of calculation of the cost of production and pricing
|
Regulations on Management Accounting Policy The position of rationing costs Regulations on pricing |
Classifier costs and reference costs Classifier (reference) carrier costs Structure and composition of the articles of estimates and calculations Basis for allocating indirect costs |
Formats of budgets and farm reporting |
Regulations on budgeting Albums of forms of primary documents and on-farm reporting |
Structure and composition of budgets Classifications of documents by type and species Register of management reports The order of formation and reporting |
The system of accounting-analytical indicators for strategic, tactical and operational management |
Regulation on the management analysis |
A set of key performance indicators Range of financial and non-financial indicators for each responsibility center Monitoring procedures of accounting-analytical indicators |
Procedures of organisation of management control |
Regulation (instructions) on how to conduct an inventory of inventory in the warehouse, store shops, workplaces Regulation (instruction) on the liability of individuals associated with the hunting, storing, moving and using an internal inventory |
A set of benchmarks used to measure the performance of each responsibility center; Order of formation of the normal values of benchmarks; The procedure for determining the actual values of the benchmarks; order of evaluation based on the data analysis activities of the responsibility centers |
Developed by authors
The main regulatory documents defining management accounting standards for the organization may have different names. For example, by analogy with the financial accounting, it will be called the "Regulations on Management Accounting Policies", which will structurally include the following topics:
1. General Provisions. It contains the order of development and changes in the Regulations, indicating the responsible persons.
2. Basic principles and concepts. Reflect theoretical approaches to the organization of in-house accounting - its essence, purpose, basic functions, principles and procedures for making changes in accounting policies.
3. The organizational foundations. It contains a description of the organizational principles of management accounting.
4. Methodological aspects. It contains instructions and a brief description of management accounting methods for each of the accounting items.
5. Technical aspects. It contains a description of the basic rules of management accounting in the enterprise.
In practical activities of Russian companies and holdings, there are various options for terminology: management accounting regulations, the rules of management accounting and budgeting, management accounting standards, internal standards, corporate standards, etc.
Regardless of the form, standards of management accounting by the content is the final stage of formulation of management accounting system and directly determined by the parameters and accounting procedures, as well as its ultimate goal - reporting to the user with the presentation of indicators in the right angles and formats for making management decisions.
The scope and content of internal standards depend primarily on the problems that are to be solved with the use of management accounting system. All standards and regulations can be divided into several groups (Table 4).
Table 4. Classification of internal standards of management accounting
Documentation type |
Composition |
Function |
Instructive-methodical documentation
|
Detailed guides that reveal the accounting policies and have the guiding and training nature |
Describes business transactions with maximum concrete actions: chart accounts, selectable subkonto, and the procedure of calculation of sum and quantity variables. |
Regulatory-manual documents |
Various reference books and classifiers, structure and composition of cost and revenue items, budgetary and accounting structure and so on. |
Establish rules for groups of similar pieces of information |
Regulating documents nature
|
Procedure document for the purpose of management accounting, album of unified forms of accounting and reporting documents. |
Determines the regulations, procedures, establish business processes that describe the accounting process chain |
The development of standards and regulations of management accounting is based on the following stages: preparation of unified classifications and reference (manual) books; development of a management chart of accounts; creation of management reporting system.
Practical development of the authors, embedded in a number of enterprises, comprise the following stages of forming internal standards of management accounting:
1) Development of common classifications and manual books
Classifications of management accounting are required for systemizing and characterising different objects of accounting for the purpose of their unique interpretation of all participants in the planning, organization, promotion and control of the enterprise. The mains are: fixed assets classifier, classifier of materials, the manuals of range (goods/ works/ services), manuals of income/ revenue, responsibility centers directory, a directory of contractors, reference prices, etc.
In developing the manuals of the budget of income and expenses (income, expenses) and cash flow budget (receipts, payments), it should not be only competently structured, but also a comparison should be presented: the income and expenses that accrued and used to generate the profit and loss statement must comply with the receipts and payments, used to form the cash flow statement.
To assess the effectiveness of the structural units of the organization the reference centers of financial responsibilities (CFR) should be developed. Every educated responsibility center will be the primary element of the financial system of the organization management, so the allocation of responsibility center should be carried out using the methodology of allocation responsibility centers and the specifics of their operation.
For each manual there should be the set of uniformed rules of registration of its elements and attributes and should be defined by their categories. All internal and external documentation should clearly be classified in accordance with the established directories before accounting.
2) Development of management chart of accounts (MCA)
Management Chart of Accounts performs the function of coordination of budgetary and accounting procedures, so in the majority of enterprises during the development of management accounting standards, the most attention is given to the structure and format of the chart of accounts. Development of management chart of accounts makes it possible to make maximum use of information resources of management accounting in order to prepare additional information, that disclose the main indicators of reports on specific needs of external users.
3) Creation of management reporting system
The composition, form and content of management reports in each case affect not only the organizational domain, but also questions of managers. In addition to the top-level reports (management balance, management report of profit and loss account and cash flow statement), management accounts package of company can include multiple reports, classified by destination, addressee, frequency form, and so on. Reports can be either regulated or not regulated, i.e. formed to the specific user query. Management reports summarize all operations and cover all major economic activities.
For a well-functioning system of management accounting in the formation of accounting policies it is necessary to provide relationship between charts of management accounting and reports of indicators of accounts, so that the consumer of information - the head of any hierarchy level - in real-time had the opportunity to create any report that includes indicators for which he is responsible. The problem at this stage is the reconciliation of performance of chart of accounts and generated reports, formed for example for company owners. Unlike the managers, this category of users do not have access to the data of the administrative account, but they are in need of information, that would in-depth characterize obtained results. In authors’ opinion, the solution to provide information to shareholders and certain other categories of users (investors or lenders) will identify their needs for a variety of business situations and the development of the internal reporting format simulation methods.
In conclusion, it should be noted that the standards of management accounting developed for a specific business entity, should be as close as possible to the specific needs of the enterprise and are aimed to improve the efficiency of the management accounting system. As a further research direction it is planned to closely study the impact of industrial and organizational specifics on the size and structure of the management accounting standards.
Advisory Board under the Russian Ministry of Economic Development (2002). Guidelines on the organization and conduction of management accounting questions approved by Advisory Board under the Russian Ministry of Economic Development. Protocol of the meeting of 22 April 2002, № 4.
Ahtamberdieva, G. (2012). What is SMS-Certification. Business. Life - Magazine for owners and corporate executives, 3, 4-5.
Akimova, B.Zh., Kuzmina, M.S. (2015). Management Company (organization) costs: a tutorial Moscow: KNORUS.
Averchev, I. (2011). IV Management accounting and reporting. Saint Petersburg: Rid Group.
Drury, C. (2012). Management and Cost Accounting. Moscow: UNITY-DANA.
Hongren, C. (2007). Managerial Accounting. Saint Petersburg: "Business Class" Series.
Kapustin, P.A. (2000). Management consulting for executives. Saint Petersburg: The publishing house "Business press ".
Nurov, K. (2011). Management consulting services in the Republic of Kazakhstan: problems and prospects. Securities market of Kazakhstan, 6, 18-19.
1. Plekhanov Russian University of Economics, Voronezh Branch. E-mail: Kuzminamarina09@mail.ru
4. Eurasian National University named after L.N. Gumilyov
7. Kazakh University of Economics, Finance and International Trade