Question

1. Explain the similarities and differences in how the McCarthy and Sutton papers present the nature of accounting and the accounting function within an organization.

2. Explain how the balanced scorecard could be used by a merger and acquisition team to evaluate potential target companies. Be brief and include specific measurement criteria.

3.Explain the difference between an expense and a cost. Why is it important for a company to not only understand their costs but also their cost drivers?

4. Explain why the overhead in product and service costs is frequently not correct. How are overhead variance addressed? Why? What steps can be taken to mitigate deviations in overhead variances?

Answer 1

Ans.-1.

Simmiliarities:

1  whether an article is considered AIS-related, consistent

2.AIS research does exist at the intersection of the accounting and information systems domains

Difference:

1 McCarthy Beleives Research directions and perspective While Sutton BeleivesToward an understanding of the AIS discipline. Advances in Accounting Information Systems

2.McCarthy beleives that AIS investigates issues about “transaction processing for accountability purposes of an organization While Sutton’s view is that AIS research has endpoints in accounting and management information system

3. McCarthy beleives that A framework for accounting information systems research While Sutton Use of knowledge management systems and the impact on the acquisition of explicit knowledge  

Answer-2

The Balance score card is a modern mathod of performance measurment.

The first part reviews the literature and presents a brief history of management control systems development from traditional accounting control systems to the complex Balanced Scorecard performance measurement system. The next section is dedicated to the specification of the Balanced Scorecard model.The third section discusses benefits resulting from Balanced Scorecard implementation in the Czech business environment as well as barriers and potential problems incidental to its adoption. Finally, the last section summarizes the findings and gives a proposal for future research. From Traditional Accounting Control Systems to the Balanced Scorecard

Specific Measurement Criteria:

1 Strategic Objective

2.Financial Perspective

3 Customer Perspective

4. Internal Business process Perspective

5.Potential Perspective

Answer-3

Difference Betwwen Cost and Expenses

1.Cost is Related to production cost, Manufacturing cost Administration cost ,Selling cost but expenditure is for a single event like Electricity expenses Telephone Expenses Advertisement Expenses

2.Cost is Direct cost , Indirect Cost Direct cost is Related to Production Department yet Indirect cost is related to administration.

For Determining Activity based costing a company should understand their cost and cost driver.

Answer4.

Production overheads is related to production cost and service overheads is related to service cost Production cost may be increase due to fluctuation of prices of materials and labour and overhead yet service cost is pre fixed through contract. there is negligible chances of fluctuation.

overhead variances addressed by Differences in budgeted overheads with actual overheads.

We should do Variance analysis through which we can mitigate deviation in overhead variances.