Strategic Management Accounting is an elective segment offered in the CPA Program.

Strategic Management Accounting is a constantly evolving discipline that aims to support managers in a variety of industries and sectors as they face the challenge of creating and managing value in an increasingly competitive and difficult operating environment.

This segment is designed to further develop your abilities in the Strategic Management Accounting area with a specific focus on strategy and value.

After completing this segment, your understanding of the need to create, manage and enhance value will be strengthened, and you will be equipped with a variety of techniques to support these tasks.

Module 1: Management accounting: supporting the value creation process

Part A: The nature of management accounting

• accounting
• traditional management accounting defined and explained
• changes to the traditional management accounting roles
• factors driving change
  • globalisation
  • technology
  • stakeholder focus
  • corporate governance
  • internal structures
• reaction to change: strategic management accounting

Part B: Understanding and supporting management

• what is value?
• what managers do: creating and managing value
• management accounting and the strategic management process
• management accounting and operational management
• management accounting and line managers
• management accounting and the public sector

Part C: Management accounting systems (MAS)

• the role of the management accounting system
• MAS and the internal controls
• problems with management accounting systems

Part D: The emerging role of the management accountant

• the role
• challenges
  • technology
  • managing resources
  • innovation
• skills

Module 2: Creating organisational value

Part A: The value chain

• why do we have organisations
• what do organisations do
• what is meant by organisation value
• an elaboration of the value chain concept: at the organisational level
• the value chain concept: at the industry level
• transaction costs and the evolving form of the value chain 
• components of the value chain at the level of the firm

Part B: Strategic implications of the value chain

• how does the value chain impact upon strategy
• the value chain and strategic positioning  
  • cost leadership strategy
  • differentiation strategy
  • focus strategy
• value chain analysis and the formation of a competitive strategy
• problems with generic strategy concepts

Part C: The management accountant's contribution to value chain analysis

• the management accountant and value chain analysis

Part D: Economic forces impacting on the competitive position

• new competitors
• existing competitors
• substitute products
• customers
• suppliers

Part E: The value chain and the development and execution of organisational strategies

• strategic management and creating organisational value
• what is strategic analysis
• what is strategic choice
• what is strategy implementation
• what role does the CPA play in strategic management
• how is the quality of an organisation's strategy tested
• what should a good strategy achieve

Module 3: Managing performance measures

Part A: Why measure performance?

• performance measures: supporting decision-making
• performance measures: motivating behaviour
• performance measures: supporting signalling
• performance measurement and value creation
• performance measurement, strategy and management control systems
  • strategy
  • management control systems
  • organisational outcomes
  • decision-making, motivating behaviour and signalling

Part B: What are effective performance measures?

• Characteristics associated with each single measure
• Performance measurement, strategy and management control systems
  • validity and reliability
  • clarity
  • cost
  • timeliness
  • access
  • controllability
  • gaming and manipulation
• so what!

Part C: Use of strategic and operational performance measures

• measures in different types of balanced scorecards
• three types of scorecards
• using performance-measurement systems to translate strategy into action
• linking measures to strategy: strategy maps
• cascading measures
• the use of strategy scorecards
• strategy learning based on performance measures
• evaluating the scorecard and system of scorecards

Part D: Benchmarking

• what is benchmarking
• motivation: benefits
• how it is done 
• performance measurement, strategy and management control systems
  • decide on performance measures
  • who are you benchmarking against
  • organisation's own measures
  • internal measures across units
  • industry benchmarks (best practice)
  • comparable: best practice outside
  • obtain benchmark measures
  • compare the two
  • use information for decisions, control and performance evaluation

Part E: Problems with benchmarking

• level of participation both within and outside the organisation
• benchmarking does not tell you why there are differences
• reference data may be in a different context
• standardisation of measures
• getting data
• historical

Part F: Organisational effects of performance measurement

• measurement, motivation and compensation
  • performance
  • motivation
  • skills and knowledge
  • environment
  • compensation
  • tying compensation to performance
  • timely feedback
  • group and individual performance
  • agency theory
  • role of performance measures
• problems with contemporary performance measurement
  • changes in technology of the firm
  • level of investment in information technology
• organisational outcomes

Module 4: Techniques for managing value

Part A: Supporting value chain improvements

• the need for relevant information
• value chain analysis
• information technology and the value chain
• performance measurement

Part B: Applying the concepts and tools of strategic management accounting to the value chain

• setting a target cost for the new product
• the upstream value chain: supplier management
• value chain analysis and improved economic performance
• strategic cost-management concepts: life cycle, target and kaizen costing
• outsourcing and off-shoring
• total quality management
• focusing on downstream value chain activities: customer profitability analysis 
• linking the tools of strategic cost management

Module 5: Project management

Part A: Project management defined

• what is a project
• what is project management
• the steps in project management 
  • project selection
  • project planning
  • project implementation, monitoring and control
  • project completion and review

Part B: Roles in project management

• project sponsor
• project manager
• strategic management accountant
• the project team

Part C: The SMA's role in project selection

• strategic fit
• risk assessment 
  • risk identification
  • risk classification
• financial analysis
  • net present value
  • internal rate of return
  • profitability index
  • payback
  • return on investment
  • residual income

Part D: The SMA's role in project planning

• project scheduling 
  • Gantt charts
  • project evaluation and review technique (PERT) 
  • critical path method and crashing projects
• project budgeting
• contracts

Part E: The SMA's role in project implementation control and monitoring

• monitoring costs
• the earned value method: time vs cost
• designing performance measures

Part F: The SMA's role in project completion and review

• the completion decision
• task list
• specification satisfaction consensus
• financial closure
• final budget
• closing the cost records
• post-project expenditure
• resource dispersion
• final report
• knowledge management

Case studies

• case study 1: Terracotta Ltd
• case study 2: Banksia City Council