Page 211 - DCOM206_COST_ACCOUNTING_II

Cost Accounting – II

Notes Recent financial scandals have resulted in enormous pressure on finance divisions to
provide trustful and reliable financial information, namely for external users. After
restoring confidence in your company’s ability to produce reliable financial information
by implementing control mechanisms such as Sarbanes-Oxley, reporting for internal
management purposes becomes the focus of finance managers.
However, internal requirements vary significantly. Not only is a higher level of detail
required, but the demand on speeding up the entire reporting process while maintaining
its reliability and trustworthiness is also growing. This exposes finance managers to new
challenges such as the need to provide consistent top quality reports designed for external
users as well as detailed operating reports. Moreover, finance managers are also expected
to act as strategic partners in making decisions on company projects and strategic initiatives.
External financial reporting controls are typically made in the same period when accounting
books are closed and reports and analyses are prepared. The pressure on limited resources
of finance department is further strengthened by increasing demands on internal support
in managing company performance. Without having adequately designed process and
sufficient technological support it is nearly impossible to survive in this pressure.

How to Drive More Value

A set of principles has been developed to guide our clients through successful processes of
management reporting. Here are the most important of them.
Establish One Version of the Truth

Establish version and representation of the truth across the enterprise create consistent
standards for report styles, content, quality timing and frequency, and design reports to
focus on problem solving and decision making.
Meet Business User Needs

Ensure business user needs are met by design of management reports by providing support
for the requirements of business users of the project solution.
Provide Easy to Use Reporting Capabilities

Provide reporting capabilities that are simple to use, easy to learn and contain standard
tool for performing in – depth ad hoc analysis.

Distinguish between Accountability and Insight Reporting
Accountability reporting is primary intended to help management better measure
performance against target, whereas, insight reporting is focused on providing information
to help management better understand the business and react tactically and strategically.
Contd...

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