ACCOUNTING

Module strategic management accounting

1.0 Introduction3

2.0 Question 13

2.1 Evaluation of the statement3

2.2 The Return on Investment (ROI)5

2.3 The economic value added6

2.4 Overcoming the short-term nature of these measures8

3.0 Question 210

3.1 Transfer Pricing10

3.2 Purpose10

3.3 Methods of Transfer Pricing10

3.4 Market Based Pricing11

3.5 Advantages and Disadvantages12

3.6 Cost based transfer pricing12

3.7 Advantages and disadvantages of cost base transfer pricing13

3.8 Disadvantages14

3.9 Negotiation base transfer pricing14

3.10 Advantages and disadvantages of negotiation based transfer pricing15

3.11 Disadvantages of negotiation base transfer pricing15

References16

Module strategic management accounting

1.0 Introduction

To provide precise and accurate answers of the proposed question the writer has alienated this report in two main parts. In the first part of the report the writer has provide precise illustration of performance management and its importance for the accomplishment of organizational goals (Al Mamun & Mansor, 2012, pp.310-318). In the next, part of this section, critical evaluation of the statement that “EVA and ROI as a performance measurement tool motivates managers of the organization to limit their thinking and decision making ability.

After conducting in-depth evaluation of the statement, the report would provide the ways through which this short term thinking attitude of managers can be changed. The next section of the report would provide brief illustration of the transfer pricing a useful tool that is preferred by management of the organization while transferring product or information within organization. This section would further provide detail illustration of advantages and disadvantages of using various methods of transfer pricing in the organization.

2.0 Question 1

2.1 Evaluation of the statement

Performance of the organization could be analyzed from diversified aspect and thus ensuing several dissimilar explanation of “flourishing achievement”. Moreover, every perception of company's achievement could be analyzed in different ways, and every element of organization contains distinctive state of affairs thus building the process of performance measurement as intrinsically conditional (Bernard et al, 2006, pp. 15-20).

On the other hand, prevailing issues have proved to be challenging to understand for experts and research analyst. In view of the fact that theoretical analysis entails forming and analyzing allegation that could provide clear illustration or proposed a specific trend (This process is normally explained as the worth of dependent variable in a particular model) and this concept is considered effective in broader perspectives.

Probability of forming a multi functional framework of analyzing organizational performance is very high, as it would enable the management to identify and resolve problems of multiple units instantly as every department would contain different and complex problem (Brauner, 2008, pp. 79-82). However, in this report writer has provided a cohesive picture of organization general performance as it is extremely important to understand the concept of performance measurement and tools used for this purpose.

Performance measurement a process that is directly associated with organization mission, vision, and long and short-term strategic planning. This process enables the organization to assess the overall performance of the organization and evaluate performance of every individual separately on regular bases (Cools & Slagmulder, 2009, pp. 151-178). The successful implementation of performance measurement tools means that organization has been successful in ...