ENGLISH I

ISSUE: ACCOUNTING FOR MANAGEMENT

CAREER: ACCOUNTING
MEMBERS - GROUP 02:

VERÓNICA HILAQUITA HUAMAN

LILIANA MENA LOZANO

GLADIS ROSMERY FRUCTUOSO GRANADOS

JACQUELINE NOLE PICCINI

BERKINA NIAMY LOA QUISPE

ISABEL IPANAQUE VILCHEZ

AUGUST 2023

Accounting for Management 1

 ÍNDICE

ÍNDICE PÁG.
PRESENTATION ......................................................................................................................................... 4
INTRODUCTION ........................................................................................................................................ 5
1. BACKGROUND .................................................................................................................................. 6
2. THE MANAGEMENT ......................................................................................................................... 7
3. ABOUT ACCOUNTING ..................................................................................................................... 8
4. THE ACCOUNTING SYSTEM ......................................................................................................... 10
5. STUDY OF ACCOUNTING INFORMATION TRANSPARENCY ................................................. 11
6. RESULTS ........................................................................................................................................... 13
7. CONCLUSIONS ................................................................................................................................ 16
8. SOURCES CONSULTED .................................................................................................................. 17

Accounting for Management 2

 DEDICATION

This work is dedicated to God who has given us life and strength to
carry on in our day to day, to our Parents for giving us that great
unconditional support and for giving us life, to our teacher who
teaches this great subject, who gave us imparts his knowledge and
gives us part of his time to fulfill his work.
Acknowledgment: First of all, we thank our parents for their
unconditional support and those who supported us in one way or
another for the preparation of this work. To our teachers to whom we
owe much of our knowledge, thanks to their patience and teaching
Finally, an eternal gratitude. To this prestigious Institute which opens
its doors to young people like us, preparing us for a competitive
future and training us as professionals who are serious, responsible
and academically rigorous.

Accounting for Management 3

 PRESENTATION

This work performs an analysis of the theoretical positions of the variables management and
accounting framed in organizations, as part of the governance function, consequently, one of the
other.

Management is observed as an element that shapes and feeds back the accounting paradigm,
directing the accounting financial information towards a decision maker, de facto accepting the user
paradigm.

Meanwhile, accounting works in complex bureaucratic models, which increasingly present a

technological abuse, generating an excess of information that is not necessarily useful. At the same
time, the accounting system faces a proposal for accounting and tax regulations framed in a classic
administrative procedure with a strong dependence and support on computer science.
Paradoxically, the contemporary perspective of quality and excellence systems incorporates with a
low profile the accounting prominence in the exercise of management.

With these considerations, this work performs a semantic methodological contrast of management
and accounting in order to typify them in their conditions and national realities.

Keywords: Management, accounting protagonism, organizations.

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 INTRODUCTION

Accounting is the science dedicated to capturing, representing accounting facts. It is the system
used by all companies to measure financial performance, recording and classifying sales, purchases
and other transactions.
This project is structured in the following ways:
In the first part we describe the general aspects of the educational center such as: historical review,
mission, vision, general objectives, specific objectives and the administrative structure. The
external context of the educational center in which the historical aspects are described is also
explained. Cultural, social, economic and educational. At the end, a diagnosis of the United Nations
bilingual school is made, where the strengths, opportunities, weaknesses and threats of it are placed.
The professional practice carried out in the accounting department allowed me to put my theoretical
knowledge into practice and contribute significantly to my work experience, where I had the
opportunity to write checks, register accounts (student welfare fund, tuition fund and deposit to the
order) register of checks drawn, canceled and in circulation.
Bank reconciliations, income report, expenses and on the financial institution of FECE were presen.
It is a procedure that incorporates diverse and important functions that have the purpose of finding
impartial and precise information about the reason for the operations.

Accounting covers three aspects, accrual, cash and accrual, which are used in the three financial
statements at the same time: Income Statement, Cash Flow and Balance Sheet; whose functions
are: gather, recognize, calculate, order, encrypt, set aside, settle, publish financial statements, gloss,
study, assess and communicate and track the development of the activities of an economic entity,
in a transparent, thorough and truthful manner. .
Accounting and Finance are specialties that play a very important role in the economy, not only for
governments, but also for companies, homes, national and international businesses, etc.

Accounting for Management 5

1. BACKGROUND

Organizations constitute a powerful social instrument that evaluates and seeks to achieve its objectives
through the coordination of actions, leaders, specialists, workers and materials (Etzioni, 1967 cited by
Córdova, Font, Gudiño, Hernández and Sánchez, 1998). Organizations are interrelated with other institutions
with particular characteristics of independence, specialty and values, while they are integrated into a
collective organizational relationship that takes up the importance of human activity and multiplies the sum
of individual visions in its community.

The characteristics of efficiency and quality have introduced organizations into almost immediate decision
processes (Segundo, 1998) that test the information available, the instruments and mechanisms with which
they operate, reflecting the response capacity of the organization to respond to the demands of its
environment. In addition to the speed of response as a capacity, information as support is a management
measurement tool, as long as it is equipped with the appropriate procedures and indicators that, in addition
to revealing the operational reality, evaluate, among other things, the production system, the flexibility of
goods and services, and even the effect of national financial markets.

On the other hand, the level of internal changes, to allow the organization a rapid modernization process that
helps it face international competition can be complex. However, there is a differentiation between the
possibilities of change of large and small companies, since the former take advantage of their investment
possibility to establish high-profile management cadres and use cutting-edge strategies and technologies,
which are not within the reach of the small companies that are exposed to the flood of imports and the
deterioration of their markets (Vázquez and Lozano, 1998). However, the plan of adjustment to the changes
must be guided by a proper appreciation of the context and the structure of resources and not only by a reform
process based on technology.

When setting the goals and objectives, a system of evaluation and measurement of achievements and
deviations is necessary, which functions as a management control system which incorporates the
organization's managers as centers or areas of responsibility. This control system, in turn, is an information
system, in which accounting plays an important role due to its ability to capture externalized actions,
achievements and conflicts and translated into quantitative indicators and significant qualitative data. In this
way accounting intervenes as a formal control system of information and measurement of financial indicators

Accounting for Management 6

for:
 Establish standards and critical points;
 Measure performance; and
 Correct deviations (Koontz 1994)

So that management accounting is a formalized information system that, based on a planning process -
budgets - and a process of calculating and evaluating deviations, divides the organization into centers with
fixed objectives that coincide in the achievement of the main objective, evaluating their participatory
cooperation in the results of the organization through costs and their deviations (AECA, s/f).

2. THE MANAGEMENT

Management theory establishes that in order to meet its objectives and necessary activities, the organization
generates a dynamic process of interaction with its environment at a specific time and context, integrating a
comprehensive plan of administrative, management, planning, execution systems. and control in a structure
with four main axes: Commercial; Operations; Human Resources and Finance (Koontz and Weihrich, 1994).
This management plan adds value to products, goods or services with an ad hoc administrative control
parallel to management, evaluating the exercise of strategic planning, budget allocation of resources,
performance measurement, responsibility center designation and transfer pricing (Anthony and
Govindarajan, 2007).

For its part, financial management is similar to a communication network where the means of control
responds to the characteristics and manner of operation of the organizations. In it, the information of what
happens, is a detector of the pre-established indicator that helps to transform the feedback into a behavior of
the organization towards what is required.

Management itself is a strategy, composed of a set of organizational systems adopted as a result of the
organization's adaptation to its environment. In a way, the management function emulates the exercise of
government in an organization, as an exercise of power and authority through control and coercion. In such
a way that the types of government are classified according to who exercises power and what interests it
protects (Giner, Lamo and Torres, 2006: 377). Normally the boards of directors of the organizations
constitute the control groups of the government which makes them the decision-makers of the management
or management. So then, management as a management action directs the business and assumes the

Accounting for Management 7

responsibility of taking the reins of the firm with a style of corporate and legal arrangement according to its
activities (Giner et al, 2006).

In turn, organizations need social control, essentially oriented to the realistic observation of deviations as a
need for order. In this dimension, accounting intervenes to recognize and monitor the achievement of
economic goals, becoming a social information mechanism. In this way, accounting management is the
exercise of identity of an organization that allows establishing ad hoc financial indicators of the general
principles of action for all members of the organization, legitimizing the governance of the organization and
providing a set of standards. organizational performance (Hodge, Anthony & Gales, 1998).

3. ABOUT ACCOUNTING

The use of accounting was triggered by the capitalist model, which required strict control of the operations
of direct concepts, and analytical concepts such as , yields, recovery, solvency, wear, contingencies, etc.
Accounting It separated its control structure significantly from the business where summary books are
segmented into different types of books, records of concepts and specific details, hence the auxiliary books
and record systems whose rise has allowed a closer understanding of the results of management and of the
business itself (López, 2004; Anthony and Govindarajan, 2007).
Accounting is therefore responsible for obtaining and providing quantitative performance information to the
organization and moderating decisions that may address its economic, social and environmental dimensions.
It is a continuity of different aspects of the life of the organization and supports the legal condition of
existence in the social and economic spheres. its function is not autonomous, it does so within a historical
and cultural framework that articulates the sense of who it is and what it does (Goddard, 2004: 546).
It is also observable that accounting has accumulated in its theoretical body a number of propositions, and
knowledge based on the utility paradigm (Hendricksen, 1970: 76 cited by Tua, 1990) which establishes as
an accepted truth that the original objective of presenting information to management and creditors was
broadened to include investors.
The emergence of the capitalist model, the creation of banks and the Law on Securities and Credit Operations
allowed the development of aspects such as accounting technology, which transformed accounting into a
control system and a language of communication in business (Del Toro, 2003).

The intervention of technology, of new and different actors and the emergence of innovative mechanisms of
negotiation and financing, made businesses and their activities become increasingly sophisticated (De la Rosa

Accounting for Management 8

and Gracida, 2008), which inevitably changed the theoretical discourse of accounting (Pahlen and Campo,
2008: 23-31).
The modern history of accounting in Mexico has three constants in its evolution and change: the context of
economic policy, American influence, and the country's changing tax policy. Here the demand for the Free
Trade Agreement from 1994 onwards has had a great influence.

The evolution of accounting in Mexico can be summarized in three aspects: legal and tax complexity;
management models; and valuation and financial projection techniques (De la Rosa and Gracida, 2008).
Today, the information age has allowed accounting to capture in detail all the economic operations of
organizations and become the mechanism by which they are controlled by law to inform their present and
future decisions.
The accounting perspective of governance means using mechanisms and methodologies very close to
finance.
Dimensions of intervention:
 The conditions
 Accounting practices
 Accounting and governance practices
 The consequences
The accounting perspective of governance means using mechanisms and methodologies very close to
finance.

Accounting for Management 9

4. THE ACCOUNTING SYSTEM

Under the basis of effective management, accounting information represents a competitive advantage if it
manages to segment the organization into its various cost and revenue centers for sufficient control and
disclosure. Advances in managerial accounting are linked to the movement of scientific leadership. And
promote the efficient use of labor and materials with physical standards, with an allocation of indirect
financial costs, of interrelated activities, ranging from obtaining raw materials and finished products, with
the option of strengthening those activities that produce greater added value and eliminating those that do
not (Gutiérrez, 2005).

Accounting as a management tool provides useful information, classified and analyzed, for the making of
managerial decisions, evaluates and controls the development of the main or strategic plan, with its
variations or deviations, involves the communication between those who elaborate, interpret and use it in
decisions. accounting management has its own objectives designed for the achievement of the overall
management and its goals.

The purpose of the system is to predict cash flow; to guide decisions regarding investments and credits; to
support managers regarding planning. The accounting intervention key is real so that all related and
relative concepts affected by the management of the organization are included. Accounting is systemically
focused with organizations, or markets and the free flow of information, agents.

Accounting for Management 10

5. STUDY OF ACCOUNTING INFORMATION TRANSPARENCY

The methodology used to study the accounting information disclosed in the financial statements was the
analysis of paths in order to determine the level of correlation and closeness of the concepts with the goals
of competitiveness, in a systemic approach, and the absence of information that affects decision making.
The study strategy was the analysis of financial statements issued and published by companies that operate
in national territory via the web, or directly obtained with absolute anonymity, as an exploratory study. Only
financial statements issued in 2011 and 2012, from lucrative companies, were accepted as part of the sample.
40 sets of basic financial statements were analyzed: balance sheet and income statement with annexes. The
convergence of the accounting financial statements with the use of the accounting regulations established in
the Financial Information Standards was eliminated from the study, considering that the object of study is
the accounting information due to the critical points. A descriptive study of the sample and a Spearman
correlation were carried out, analyzing it with the competency information matrix (Table 1) in order to
establish the characteristics of the sample and subsequently the degree of significance between concepts in
financial statements that are issued daily.

Accounting for Management 11

Tabla 1
Información para la competitividad
Competitive aspects Function / area
Products Technique/ Production,
manufacturing or operations.
Clients or target market Commercial/
Sales and Marketing Commercial / Sales
Distribution Sales
Production Technical Production / Production
, manufacturing or operations
Labor Technical/ manufacturing or operations
Production Security/ Human Resources
Purchasing
Technique/ Production,
manufacturing or operations
Technical Research Development/ Production
, manufacturing or operations.
Finance Financial / Finance
Finance
Accounting.
Source.Note: self made
Accounting for Management
Financial indicator
Amount of inventories
Costs per product.
Sales Cash sales, sales Credit
Sales bad debt.
Total Sales
Decreases in sale value
Use of guarantees
Publicity and promotion
Sales Cost of deliveries and
shipping
customs expenses Technical
Cost elements Cost of finished
products Value of defective
products
Wages paid
Personnel expenses: insurance,
pensions, uniforms, etc.
Training
Cost of purchases Added
expenses
New products and identified cost
Investigation Cost Recovery.
. unrecovered investigations
Finance.
Structure of investment,
operation and financing.
12
 6. RESULTS

The analysis of the information from the financial statements was categorized according to the
dimensions of the information concepts, reviewing the degree of disclosure and detail that would allow
providing the necessary information for the goal of competitiveness, selecting the significant data that
affects more than 10 % the value of the concept.

In relation to the criterion for disclosure of accounting information on Production and Manufacturing,
the following was found, Table 2:

Tabla 2
Resultados de la información para la producción , manufactura u operaciones

As observed, the dominant situation in the information of the accounting financial

statements is the absence of it, since it informs and does not give the necessary detail (in an
average value of 41%) or does not inform (with an average value of 29% ). Thus, the sample
studied does not provide the necessary information by 70%.
Regarding sales and marketing, the situation found is presented below,
table 3.

Accounting for Management 13

Tabla 3
Information results for Sales and Marketing In financial statements publicly issued (2012) in
Mexico.

Information results for Sales and Marketing

In financial statements publicly issued (2012) in Mexico.

Concept Significant status in weighted value Meaningful total value

the sample of the concept

Clients Does not give 40%

description details

30
Does not report

30 100 %
Gives limited detail

Composición 58%
ventas Does not give

details

17 75 %
Gives limited detail

Source: Own elaboration of the analysis of results

The information of the sales and marketing actions is an average of 87%, however, they suffer from

a low description, so that the market is not revealed in the financial statements, nor the sales or

promotion strategy, the results establish limited information on the accounting control of clients

with a lack of information in 30% of the sample.

Regarding the management of Finances, this is detailed in Table 4.

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Tabla 4
Results of the Finance information

Table 4. Results of the Finance information In financial

statements publicly issued (2012) in Mexico

Concept Significant status in weighted Meaningful total

the sample value value of the concept
Investment Heritage 21 %

17
Current assets
13 51 %
Fixed assets
Operation Does not give 36 %
details
27
Does not report
18 81 %
Living expenses
Financing Does not give 33 %
details
25
Bank creditors
17
Capital

contributions
17 92 %
Does not report
Source: Own elaboration of the analysis of results

The financial aspect is the one with the greatest disclosure in the financial statements, giving greater detail
to the operating and financing activities, which, eliminating the companies that do not provide details, yield
operating information by 54% and 75% respectively.

With respect to Human Resources and Manpower, there was no detail of information, prevailing the lack of
information in 37% and the absence of detail in 62%.

Regarding the level of correlation of the information, despite the data found on the absence and limitation of
the disclosure of the financial statements, it was observed that the strongest correlations are between the

Accounting for Management 15

information on:
a) Production and inventories 0.9167
b) Purchases and inventories 0.7143
c) Finance and inventories 0.6810
d) Finance and customers 0.6786
e) Customers and inventories 0.6667

This correlation is centered on two basic axes, inventories and customers, in such a way that there is no
balance of information if we consider that in productivity, manufacturing and operation, information is not
provided in most of the sample.

7. CONCLUSIONS

There are several theoretical considerations to reliably study the management-accounting binomial, within
which the position of the researcher and his own limitations play a role similar to that of normed accounting
and management accounting. Where one of them is obliged to comply with provisions and criteria and the
other freely allows to define its processes and indicators. Giving therefore two studio versions.

Thus, it is distinguished that the different approaches to the study of management and accounting correspond
to neoclassical organizational theories with a strong dependence on information technology and the theory
of limitations.

For its part, the study of management as a managerial function has essentially a systems approach, where
accounting acts as its control and evaluation system.

Therefore, the decision to choose the theory of study, for the management-accounting relationship allows to
recognize participatory and epistemological aspects, strengthening in a particular way the paradigm of the
user. The vision of accounting transparency for management is not complete or sufficient for management
in the financial statements studied, noting a conscious management of the social information that is
disseminated from the critical points.

Accounting for Management 16

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