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HA.E46 - Management Accounting and Control Systems*

Faculty
Jytte Larsen, Associate professor, Johnny Aastrup Roiy, External lecturer
Course Coordinator
Jytte Larsen
Prerequisite/progression of the course
The students should have knowledge of basic concepts of Financial Accounting
Course content, structure and teaching
The aim of the course is to provide the student with both theoretical understanding and practical skills of management control systems and management accounting practices.
Management control systems are perceived as a mechanism to increase the likelihood for an organization to 1) achieve its objectives and 2) utilize resources efficiently when implementing strategies.
Additionally, the management control system can become an early warning system for feeding back information to the strategic planning and control system. Alternatives to management accounting are introduced but the main focus is on financial results control systems ranging from planning and budgeting models to balance scorecards.
The student will learn to integrate performance measurement, evaluation, and incentives as part of a management control system so as to be able to influence an organization to actions and behavior that will increase goal congruence and achievement of objectives. The course also deals with important management control roles and ethical issues faced by managers and employees.
The course contains the following elements:
  • Management control alternatives (results controls, action controls, and people controls).
  • Design criteria for management control systems including analysis of control tightness and cost vs. benefit.
  • Financial result control systems used in for-profit organizations including:
  • Decentralizing in financial responsibility centers
  • Allocating resources effectively with the use of transfer prices
  • Planning and budgeting processes
  • Determining financial performance targets
  • Designing performance dependent reward systems
  • Management control considerations for not-for-profit organizations.
  • Performance measurement issues and their effects on financial results control systems,most notably the problems of Myopia and Uncontrollable Factors.
  • Control remedies to performance measurement issues with particular focus on the Balanced Scorecard
  • Corporate control roles and the organization of Corporate Finance.
  • Management control related ethical issues e.g. earnings management; corporate fraud issues e.g. Enron; and the Sarbanes-Oxley legislations and its effect on management accounting and control systems.
  • Situational influences
The course's development of personal competences
This course practises the student ability to participate in a professional debate concerning the solution to a business issue. This involves structured thinking and presentation of arguments, the ability to analyze counter-arguments in a timely fashion and relate constructively to other people’s suggestions.
Learning Objectives
After having completed the course the students should be able to:
  • Describe the theories and models that are taught in the course (as described in the course content and its elements)
  • Apply the theories and models of the course in case study settings by
  • Identify and analyze management accounting issues and management control issues
  • Evaluate management control systems and management accounting practices
  • Recommend courses of action for management with respect to their management accounting practices and control systems.
Type of examination, exam aids and assessment
Oral exam with preparation, internal censor, graded on the Danish 7-point scale
The student is allowed to bring all materials, except mobile phones, internet etc. that can communicate outside the room
Students at the HA programme are able to write their bachelor project in connection with this course: Yes
Teaching methods
The course is taught with the use of many case studies and active class participation is required as well as effective communication skills in order to train for effectively applying management control practices. Students will be required to form groups at the start of the course and are strongly recommended to participate through class presentations, case competitions, and written reports on case studies (max 3 pages.
Recommended literature
Kenneth A. Merchant & Wim A. Van der Stede: Management Control Systems: Performance Measurement, Evaluation and Incentives; Latest Edition; Prentice Hall, Pearson Education.
4-6 articles including:
  • Kaplan, Robert S. Kaplan and David P. Norton: The Balanced Scorecard – Measures That Drive Performance. Harvard Business Review, January-February 1992 (p. 71-79).
  • Kaplan, Robert S. Kaplan and David P. Norton: Having Trouble with Your Strategy? Then Map It. Harvard Business Review, September-October 2000 (p. 167-176).

Last updated by The Electives Office 31/01/2010