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The Open University

Challenges in advanced management accounting

The Open University via OpenLearn

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Overview

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This free course, Challenges in advanced management accounting, focuses on strategic management accounting and selected concepts and techniques. It will help you to successfully navigate mid- to long-term challenges to creating sustainable organisations. This OpenLearn course requires a prior understanding of basic management accounting approaches.

Syllabus

  • Introduction
  • Learning outcomes
  • 1 Strategic management accounting
  • 1 Strategic management accounting
  • 1.1 Defining strategic management accounting
  • 1.2 Comparison of strategic and traditional management accounting
  • 2 Strategic customer analysis
  • 2 Strategic customer analysis
  • 2.1 The customer selection decision
  • 2.2 Determining customer profitability
  • 2.2.1 Tracing of costs to customers
  • 2.2.2 Applying Pareto analysis to customer profitability
  • 3 Principles of project appraisal
  • 3 Principles of project appraisal
  • 3.1 Relevant cash flows and sunk costs
  • 3.2 The time value of money, discounting and present value
  • 3.3 Why does the value of money depend on time?
  • 3.3.1 Underlying factors
  • 3.3.2 Comparisons with other rates of return
  • 3.4 Using the WACC as the discount rate for a project
  • 3.5 Problems with using the WACC as the discount rate for a project
  • 3.6 Using the CAPM to find a project-specific cost of equity
  • 3.7 Problems with using the CAPM to find a project-specific cost of equity
  • 3.7.1 Problems with using industry comparisons to estimate business risk and beta value
  • 3.7.2 Problems with financial risk
  • 3.7.3 Other problems with the CAPM calculation
  • 3.8 Using a spreadsheet to model project evaluation
  • 4 Dealing with risk and uncertainty in project appraisal
  • 4 Dealing with risk and uncertainty in project appraisal
  • 4.1 Risk and uncertainty
  • 4.1.1 Attitudes towards risk
  • 4.1.2 Attitudes towards uncertainty
  • 4.2 Simple adjustments to deal with increased risk
  • 4.2.1 Risk and the discount rate
  • 4.2.2 Risk and the payback period
  • 4.2.3 Risk and time delay
  • 4.3 Using probability and future cash flows to deal with risk
  • 4.3.1 Estimating future cash flows
  • 4.3.2 Calculating probability-weighted cash flows instead of increasing the discount rate
  • 4.3.3 Estimating probabilities for scenarios instead of increasing the discount rate
  • 4.4 Modelling sensitivity analysis
  • 4.5 The value of information
  • 5 End-of-course exercises
  • 5 End-of-course exercises
  • Conclusion
  • Glossary
  • References
  • Acknowledgements

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5.0 rating, based on 1 Class Central review

4.9 rating at OpenLearn based on 10 ratings

Start your review of Challenges in advanced management accounting

  • Profile image for Enrique Enriquez
    Enrique Enriquez @EEnriquez
    17
    Having completed this course, I found it to be a rigorous and intellectually stimulating exploration of advanced management accounting. The content accurately matched its descriptions, providing a deep dive into strategic management accounting, sophisticated customer profitability analysis using activity-based costing, and the nuanced principles of project appraisal under risk and uncertainty. The estimated completion time was a precise forecast of the dedicated effort required.
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