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Managing a Business/Problem in International accounting


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1.   Compare and contrast the different ways that we can read all the activities carried out by an International Organization in the same context, which are in different countries, through accounting.
2.   Is the Indian Accounting Standard assists for the smooth functioning of an International organization? Explain.

Question:   Sir, please give detailed answer as i need to write 12-15 pages for each answer.
Ur help is very reqired.Please help with the below answers

1. Compare and contrast the different ways that we can read all the activities carried out by an International Organization in the same context, which are in different countries, through accounting.

Business Organisation
•   Organisation by type
•   Global businesses – complex organisation structures
•   National – organisation possibly stretches throughout the country
•   Regional – could be through a county or wider area (North West, South East, etc.)
•   Local – small organisations serving local area or community
Business Organisation
•   Authority – the right to make decisions and carry out tasks
•   Span of control – the number of people a superior
is responsible for
•   Chain of Command – the relationship between different levels of authority in the business
•   Hierarchy – shows the line management
in the business and who has specific responsibilities
•   Delegation – authority to carry out actions
passed from superior to subordinate
•   Empowerment – giving responsibilities to people
at all levels of the business to make decisions


•   Human Resources
•   Sales and Marketing
•   Research and Development
•   Production/Operations
•   Customer Service
•   Finance and Accounts
•   Administration and IT
Human Resources
•   Recruitment and retention
–   Job descriptions
–   Person Specifications
•   Dismissal
•   Redundancy
•   Motivation
•   Professional development and training
•   Health and safety and conditions
at work
•   Liaison with trade unions

Sales and Marketing

•   Market research
•   Promotion strategies
•   Pricing strategies
•   Sales strategies
•   The sales team
•   Product – advice on new product development, product improvement, extension strategies, target markets

Research and Development
•   New product development
•   Product improvements
•   Competitive advantage
•   Value added
•   Product testing
•   Efficiency gains
•   Cost savings

Finance and Accounts

•   Cash flow
–   Monitoring income/revenue
–   Monitoring expenditure
•   Preparing accounts
•   Raising finance
–   Shares
–   Loans
•   Links with all other functional areas

•   Acquiring resources
•   Planning output – labour, capital, land
•   Monitoring costs
•   Projections on future output
•   Production methods
–   Batch
–   Flow
–   Job
–   Cell
•   Efficiency

Customer Service
•   Monitoring distribution
•   After-sales service
•   Handling consumer enquiries
•   Offering advice to consumers
•   Dealing with customer complaints
•   Publicity and public relations


Administration and IT

•   Managing estates – cleaning, health
and safety, maintenance, security
•   Reception
•   Clerical work – reporting, recording, record keeping, communication
•   Overview of quality control
•   Use of IT systems
Management Control
Management control is the process by which managers influence other members of the organization implement the organization's strategies. Several aspects of this process are amplified below.

Management Control Activities. Management control involves a variety of activities, including:

   planning what the organization should do.
   Coordinating the activities of several parts of the organization.
   Communicating information.
   Evaluating information.
   Deciding what, if any, action should be taken.
   Influencing people to change their behaviour

Management control does not necessarily require that all actions correspond to a previously determined plan, such as a budget. Such plans are based on circumstances believed, to exist at the time they were formulated. If these circumstances have changed at the time of implementation, the actions dictated by the plan may no tiger be appropriate. While a thermostat responds to, the actual temperature in a room, management control .involves anticipating future conditions in order to ensure that-the organization's objectives are attained. If a manager discovers a better approach-one more likely than the predetermined plan to achieve the organization's goals-the management control system should not obstruct its implementation. In other words, conforming to a budget is not necessarily good, and departure from a budget is not necessarily bad.

Goal Congruence. Although systematic, the management control process is by no means mechanical rather, it involves interactions among individuals, which cannot be described in mechanical ways. Managers have personal as well as organizational goals. The central control problem is to induce them to act in pursuit of their personal goals in ways that will help attain the organization's goals as well. Goal congruence means that, insofar as is feasible, the goals of an organization's individual members should .be consistent with the goals of the organization itself. The management control system should be designed and operated with the principle of goal congruence in mind.

Principles of Management Control

Classification of Principles: One of the major purposes of a theory is to explain the nature of a subject by presenting a clear and systematic view of it With this in mind, it appears that managerial control can be analyzed by placing the basic principles of control into the categories of 1. Those dealing with the nature and purpose of control, 2. Those having to do with the structure of control, and 3.those explaining the process of control. (The same classification of principles could, no doubt, be used for the managerial functions of organizing and planning, and perhaps also for staffing and direction.

Purpose of Control

The purpose of managerial control seem to be reflected in five principles, which may be summarized as follows:

1. Principle or Assurance of Objective: Controls must contribute to the accomplishment of group objectives by detecting deviations from plans in time and in a manner to make corrective action possible.

It is obvious that the purpose of all organized enterprise is the accomplishment of group objectives, ends that cannot be accomplished by individuals acting along. This essential fact has been recognized in many analyses of management.
2.  Principle of Efficiency of Control: Controls are efficient if they effectively detect deviations from plans and make possible corrective action with the minimum of unsought consequences.

Chester Barnard has very clearly pointed out the applicability of the scientific concepts of effectiveness and efficiency to systems of human cooperation. A control may be effective in the sense that it does assure the attainment of objectives, but it is inefficient if it does-so at unnecessarily high cost in rupees, hours, lost morale, or individual dissatisfaction.

3. Principal of Control Responsibility: only the manager responsible for the execution of plans can exercise Control.

The principle follows logically from the two preceding it. If the organization structure, through its delegation of authority and assignment of tasks, gives a manager responsibility for the accomplishment of certain plan or portions of plans, this responsibility cannot be waived with out changing the organization. It is logically and practically inconsistent to expect a manager to make and accomplish plans and not to expect him to exercise control to make and sure that these plans are being accomplished. Yet this principle is sometimes misunderstood in practice. Some managers expect control to be exerted only from some top point in an enterprise, or they wait to be told from above what controls to exercise and when.

4. Principle of Future Controls: - Effective control should be aimed at preventing present and future deviations from plans. It has sometimes been said that planning is looking ahead and control is looking back. This seems to be a distorted view of control. Just as planning must be forward looking so must control. Since the manager cannot possibly control the past, and too seldom - can move fast enough to detect and correct
Current deviations from plans, his controls should be aimed at the future.

5. Principle of Direct Control: The most effective technique of control in an enterprise is to assure the quality of subordinate managers.

Most controls used by managers are actually indirect controls because they rare based on the need to keep subordinates, particularly managerial subordinates, from making mistakes. Unquestionably, the best and most direct kind of control is to assure the best possible quality of managers. Able and well trained, managers plan well and thoroughly, delegate authority, assign tasks, and do the most effective job of selecting, training, and directing subordinates. They make fewer mistakes and require fewer indirect controls.

The Structure of Control
A second group of three principles arc significant for the structure of control techniques, particularly in their relation to plans, organization, and the managerial incumbent.

6. Principle of Reflection of Plans: Controls must be designed so as to reflect the character and structure of plans.
This principle underlines the fact that controls must be tailored to individual plans. Thus, if the control of costs is the aim, the control techniques used must be based on planned costs of a definite and specific type. If one would control inventory, clearly the controls must take into account and follow those plans, which influence inventory, and true inventory control must be based upon the entire, programme of production planning and scheduling, purchasing, shipping, warehousing, Wes, and finance. Too often, in these and similar cases, the manager deceives himself by thinking he is controlling an aspect of operation when is control technique is not designed to reflect the pertinent plans involved.

7. Principle of Organizational Suitability: Controls must be designed to reflect organization structure.
  Since managers and their subordinates are the means through which the events of planning must be accomplished, it follows that effective controls must be applicable to a managers authority area and must therefore reflect the organization structure. Consequently, any device of control must be tailored to the manager and his position in the organization, and information to appraise performance against plans must be suitable to the manager who is to use it. Urwick has expressed this as the principle of uniformity and has emphasized that “all figures and reports used for purpose of control must be in terms of the organization structure”.

8. Principle of Individuality of Controls: Controls must be designed to meet to personal needs of the individual manager mould a manager into his own image, it is a fact of fife that what a manager control understand or will not understand cannot be useful to him for control. What might be a delight to the figure-minded treasurer might be abhorrent to the plant superintendent. What might be meaning full to the chief engineer might be incomprehensible to the sales managers. Some managers may like reports others tables, some charts, and   stil!   others   Mathematical   formulae   or   curves.   Control   devices   and information are important enough that they should be tailored to these needs.
The Process of Control
In the operation of controls, there appear to be six principles, which point to the most effective possible techniques of control. To be sure, control, being so much a technique, rests heavily on the art of management, on “know-how” in a given instance. But experience in control yields certain benchmarks, which no manager should overlook in practice.

9. Principle of Standards: Effective and efficient control requires objective, accurate, and suitable standards.
Standards are authoritative criteria by which performance can be measured. The principle of standards implies that every plan must have measures of effectiveness, which are as specific, and simple as possible and which accurately measure whether, a planned programmed is being accomplished.
Not only are such standards highly desirable from the standpoint of giving the manager a precise measurement of operations in relation to plans, but also they are desirably because events are controlled through people. Actual performance is sometimes camouflaged from the manager by a subordinate's sparkling or: dull, personality or by his ability to “sell” a deficient performance. Thus measurements of performance that are not objective can often be wrong. Moreover, good standards objectively applied as a measure of a subordinate's performance are most likely to be accepted by the subordinate as fair and reasonable.

10. Principle of Strategic Point Control: Effective and efficient control requires that attention be given to those factors which are strategic to the appraisal of performance.
It is ordinarily wasteful and unnecessary for a manager to follow every detail of the execution of plans. What he must know is that plans are being executed in such a manner that their goals can be accomplished. He should, therefore, concentrate his attention on selected parts of performance, which win, indicate whether significant deviations in the total plan are occurring or win occur.
There are no easy guidelines, which might be applied by a practicing manager to determine the strategic points he should watch, since the selection of these is predominantly a matter of the managerial art, perhaps the manager can reach his own solution to the problem by asking himself what things in his operations will show him best whether the plans for which he is responsible are being accomplished.

11. The Exception Principle: Efficiency in control requires that attention of the manager be given primarily to significant exceptions.

This principle, which was pointed out in am jars ago by Frederick Taylor. is sometimes confused with the principle of strategic point control. But they arc essentially different concepts even though both have to do with the utilization of standards. Strategic point control refers to the selection of certain key factors, which determine whether performance confirms to plans, while the exception principle has to do with watching for (and taking action with respect) significant deviations at these points.
The difference between the exception principle and the principle of strategic point control can be illustrated by the technique s a sales manager might employ to control field sales. He might select as critical points to watch such items as sales per salesman sales by products and by territories, or gross profits from sales by product. However, in watching these critical points, he would see no need for action unless he detected deviations beyond limits he regarded as normal, that is, deviations which constitute noteworthy exceptions.
The exception principle is often quoted as an essential requirement of managerial control efficiency. However, the manager who first chooses the fewest practicable strategic points to watch, and then concentrates on exceptions increases his efficiency markedly. The necessary number of strategic points to be watched win depend upon the importance of the plan and the extent to which strategic points showing progress under the plan can be found or devised. This difference might be illustrated by practices in quality control. It may be important to test carefully every part of a missile guidance and control system and hold each part to close performance tolerances; but in the missile fuselage shell there might be only few points to be checked, and the allowable tolerance might be relatively broad.

12. The Principle of Flexibility of Controls:  Controls should incorporate sufficient flexibility to remain effective despite the failure of plans.
Stated negatively, this principle, forgiven clear form by Goetz, ** means that controls should not be so inextricable bound into a particular plan that, should unforeseen events or shifts in goals ice the plan unworkable, all control is lost. This principle is best illustrated by; the considerations, which led to the flexible, .or variable, gadget. Such budgeting, which provides for budgets to be changed quickly and virtually automatically if, the business outlook changes.

13.   Principle of Review: The control system should be reviewed periodically.
14. Principle of Action: Control is only justified if measures are undertaking to correct indicated or experienced deviations from plans through appropriate planning, organizing, staffing, and directing.
Human Resources
The human resources or personnel department is responsible for hiring employees and ensuring that they get the proper training to perform their jobs. Human-resources directors or managers have employees fill out proper paperwork, including W-4 and I-9 forms. The W-4 form determines how much is deducted from each paycheck; the I-9 or employment eligibility verification form ensures that a recently hired worker can legally work in the United States. Human-resources professionals establish pay scales for all employees, basing salaries on comparable compensation packages in the industry.
Marketing professionals determine the products that their companies introduce to the marketplace, often using marketing research surveys to determine what consumers need and want. This helps the company to better align its strategies. Marketing workers help to establish prices for products, based on manufacturing costs. Marketing managers and directors decide which types of advertising and promotions their companies use. Some marketing departments have advertising directors or managers who handle these functions; they establish budgets for various types of advertising, such as television, radio and Internet ads, and track the results. The marketing department determines the right distribution channels for the company's products. For example, a consumer products company may sell its products in grocery stores and mass-merchandiser outlets.
Customer Service
Customer-service representatives answer calls or in-person requests from customers. Some customers may want additional information about a product or service; others have problems related to the products they purchased. Customer-service managers train representatives on certain policies, such as handling refunds. Customer-service departments offer courtesy services to customers, such as accepting payments, cashing checks and selling stamps. Manufacturers, particularly those that sell technical products, often have several levels of customer service, including phone, email and technical support. Part of a customer-service representative's job is to determine where to route calls or inquiries, according to the Bureau of Labor Statistics.
Accounting professionals usually work in one of three areas: accounts receivable, accounts payable and payroll. Accounts-receivable specialists track the debts owed to the company. For example, customers who purchase items on credit fall within the bailiwick of accounts-receivable employees. These professionals prepare and send invoices to apprise customers when payments are due. Accounts-payable employees track payments that the company owes, including amounts owed for parts or to repair and maintenance vendors. Payroll specialists ensure that employees are paid on time and distribute annual W-2 and 1099 forms to employees and independent contractors, respectively, for tax purposes.

The products function also includes all the following aspects of production:
1. Production Planning
2. Production Control
3. Machine Utilisation Control
4. Machine Utilisation Control
5. Staff Utilisation Control
6. Final Quality Checks
Production Function:
• Ordering stocks of raw materials
• Storing and checking the stokes of raw materials
• Planning production schedules
• Producing or assembling the finished products
• Checking the quality of the product
• Carrying out repairs to machinery and equipment.


-Control Cash Drawers And Credit Cards
-Control Cash Receipts And Deposits
-control  system   to  Manage Problem Checks
-control  system  to  Manage Wire Transfers
-Control to  Cheque  Signing Authority
-control  system  to  Manage Check Requests
-control  system  to   Manage Bank Account Reconciliations
-control  system  to  Manage Petty Cash

-control  system  Manage Chart of Accounts
-system  to  Control Files And Records Management
-control  system  to  Manage Travel And Entertainment
-system  to  Control Management Reports
-system  to  Control Period-End Review & Closing
-control   system  to Manage Controlling Legal Costs
-control   system  to Manage Taxes And Insurance
-system  to  Control Property Tax Assessments
-control  system  to  Manage Confidential Information Release
-system  to  Control Documents

-to Manage Inventory Control
-to Manage Inventory Counts
-to Manage Fixed Asset Control
-to Manage Customer Property
-to Control Fixed Asset Capitalization & Depreciation

-to Control Vendor Selection
-to Manage General Purchasing
-to Manage Project Purchasing
-to Control Receiving And Inspection
-to Manage Shipping And Freight Claims
-to Control Accounts Payable And Cash Disbursements

-to Control Point-Of-Sale Orders
-to Manage Sales Order Entry
-to Manage Sales Order Acceptance
-to Control Customer Credit Approval And Terms
-to Manage Shipment Of Goods
-to Control Invoicing And Accounts Receivable
-to Manage Progress Billing
-to Manage Sales Tax Collection
-to Manage Account Collections
-to Control Customer Returns

-total  sales  expenses
-territory  sales  expenses
etc etc

-product  development  costs
-advertising  expenses
-sales  promotion  expenses
-trade  promotion  expenses
-trade  spend  expenses
etc etc

Accounting Forms   applied  to  the
-Sample Account Codes
-Account Collection Control For m
-Accounts Receivable Write-Off Authorization
-Asset Disposition Form
-Bad Check Notice
-Bank Wire Instructions
-Bill Of Sale
-Budget vs. Actual Report
-Capital Asset Requisition
-Check Request
-Check Signing Authority Log
-Commercial Invoice
-Credit Application
-Credit Inquiry
-Daily Cash Report
-Daily Flash Report
-Daily Sundry Payable Log
-Department Reporting Summary
-Deposit Log
-Document Change Control
-Entertainment And Business Gift Expense Report
-Financial Statements
-Inventory Count Sheet
-Inventory Inspection Levels
-Inventory Requisition
-Inventory Tag
-Sample Invoice
-Master File Guide Index
-Material Return Notice
-New Vendor Notification
-Non-Disclosure Agreement
-Order And Arrival Log
-Order Form
-Phone Confirmation Checklist
-Purchase Order
-Purchase Order Follow-Up
-Purchase Order Log
-Purchase Requisition
-Receiving and Inspection Report
-Receiving Log
-Records Retention Periods
-Request For Credit Approval
-Request For Document Change
-Returned Goods Authorization
-Sample Sales Order
-Sample Bank And Book Balances Reconciliation
-Shipping Log
-Tax Calendar of Recurring Monthly Dates
-Travel And Miscellaneous Expense Report
-Travel Arrangements Form
-Vendor Survey Form
-Week Cash Flow Report
-Weekly Financial Report
-Wire Transfer Form


2. Is the Indian Accounting Standard assists for the smooth functioning of an International organization? Explain.

Indian Accounting Standards Converged with IFRS Notified
Reliable, consistent and uniform financial reporting is important part of good corporate governance practices worldwide in order to enhance the credibility of the businesses in the eyes of investors to take informed investment decisions. In pursuance of G-20 commitment given by India, the process of convergence of Indian Accounting Standards with IFRS has been carried out in Ministry of Corporate Affairs through wide ranging consultative exercise with all the stakeholders. Thirty five Indian Accounting Standards converged with International Financial Reporting Standards (henceforth called IND AS) are being notified by the Ministry and placed on the website. . These are: IND ASs 1, 2, 7, 8, 10, 11, 12, 16, 17, 18, 19, 20, 21, 23, 24, 27, 28, 29, 31, 32, 33, 34, 36, 37, 38, 39, 40, 101, 102, 103, 104, 105, 106, 107 and 108. The Ministry of Corporate Affairs will implement the IFRS converged Indian Accounting Standards in a phased manner after various issues including tax related issues are resolved with the concerned Departments. It would be ensured that the implementation of the converged standards in a phased manner is smooth for the stakeholders.
Indian Accounting Standards, (abbreviated as Ind AS) are a set of accounting standards notified by the Ministry of Corporate Affairs which are converged with International Financial Reporting Standards (IFRS). These accounting standards are formulated by Accounting Standards Board of Institute of Chartered Accountants of India. Now India will have two sets of accounting standards viz. existing accounting standards under Companies (Accounting Standard) Rules, 2006 and IFRS converged Indian Accounting Standards(Ind AS). The Ind AS are named and numbered in the same way as the corresponding IFRS. NACAS recommend these standards to the Ministry of Corporate Affairs. The Ministry of Corporate Affairs has to spell out the accounting standards applicable for companies in India. As on date the Ministry of Corporate Affairs notified 35 Indian Accounting Standards(Ind AS). But it has not notified the date of implementation of the same.
List of Indian Accounting Standards
The following are the mandatory Accounting Standards (AS) as on July 1 2012 as listed on the site of The Institute of Chartered Accountants of India (ICAI) -
•   AS 1 Disclosure of Accounting Policies
•   AS 2 Valuation of Inventories
•   AS 3 Cash Flow Statements
•   AS 4 Contingencies and Events Occuring after the Balance Sheet Date
•   AS 5 Net Profit or Loss for the period,Prior Period Items and Changes in Accounting Policies
•   AS 6 Depreciation Accounting
•   AS 7 Construction Contracts (revised 2002)
•   AS 8 Accounting for Research and Development (AS-8 is no longer in force since it was merged with AS-26)
•   AS 9 Revenue Recognition
•   AS 10 Accounting for Fixed Assets
•   AS 11 The Effects of Changes in Foreign Exchange Rates (revised 2003),
•   AS 12 Accounting for Government Grants
•   AS 13 Accounting for Investments
•   AS 14 Accounting for Amalgamations
•   AS 15 Employee Benefits (revised 2005)
•   AS 16 Borrowing Costs
•   AS 17 Segment Reporting
•   AS 18 Related Party Disclosures
•   AS 19 Leases
•   AS 20 Earnings Per Share
•   AS 21 Consolidated Financial Statements
•   AS 22 Accounting for Taxes on Income.
•   AS 23 Accounting for Investments in Associates in Consolidated Financial Statements
•   AS 24 Discontinuing Operations
•   AS 25 Interim Financial Reporting
•   AS 26 Intangible Assets
•   AS 27 Financial Reporting of Interests in Joint Ventures
•   AS 28 Impairment of Assets
•   AS 29 Provisions,Contingent` Liabilities and Contingent Assets
•   AS 30 Financial Instruments: Recognition and Measurement and Limited Revisions to AS 2, AS 11 revised 2003), AS 21, AS 23, AS 26, AS 27, AS 28 and AS 29
•   AS 31, Financial Instruments: Presentation
•   AS 32, Financial Instruments: Disclosures, and limited revision to Accounting Standard (AS) 19, Leases

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Leo Lingham


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