Paper 3.3 - Performance Management
 

Aim

To ensure students can apply judgement and technique in the analysis of relevant data to provide management with the information required to contribute to a range of strategic planning, control and decision-making situations.

Objectives

On completion of this paper candidates should be able to:

  • understand the objectives of preparing management information and the need to adapt techniques in a changing commercial environment
  • identify the information needs of management and contribute to the development of appropriate systems
  • evaluate the strategic performance of a business and recommend appropriate performance measures
  • apply techniques to evaluate management decision making in relation to pricing, product range and marketing expenditure
  • identify and apply appropriate budgeting techniques to enable management to control the business and
  • demonstrate the skills expected in Part 3.

Content

Management accounting framework objectives of management information, trends and developments in management accounting techniques and methods, impact of changes in business structures, functions and performance measures.

Design of management information systems system objectives and the uses of information, sources of information, recording and processing methods, format of reports, influencing factors - cost-benefit analysis, type of activities, size of entity, information requirements.

Performance measurement performance measures - profit, EPS, share price, ROI, RI, Balanced Scorecard, Performance Pyramid, non financial performance measures, throughput accounting, adjustments to performance for price and volume factors, transfer pricing, reward schemes and management behaviour.

Decision-making pricing strategies and evaluation pricing decisions, profit maximisation and CVP analysis, product profitability, limiting factor analysis, evaluating marketing spends, brand switching analysis, customer profitability analysis.

Budgeting and budgetary control preparation, behavioural aspects, quantitative aids, uncertainty, activity based budgeting, control theory, current developments in budgeting.

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