Accounting for financial reporting. pptx

Advanced Research Methodology

Introduction to Research - 1

The word research is composed of two terms, re and search. The dictionary defines the former as a prefix meaning again, a new or over again and the latter as a verb meaning to examine closely and carefully, to test and try, or to probe. Together they form a noun describing a careful, systematic, patient study and investigation in some field of knowledge, undertaken to establish facts or principles.
According to Robert Ross, “research is essentially an investigation, a recording and an analysis of evidence for the purpose of gaining knowledge.” It can generally be defined as a systematic method of finding solutions to problems.
A research need not lead to ideal solution but it may give rise to new problems which may require further research. In other words research is not an end to a problem since every research gives birth to a new question. It is carried on both for discovering new facts and verification of old ones.
Features of Research
 It means the discovery of new knowledge
 Is essentially an investigation
 Is related with the solution of a problem
 It is based on observation or experimental evidences.
 It demands accurate observation or experimentation.
 In research, the researchers try to find out answers for unsolved questions
 It should be carefully recorded and reported
Need for research: (Importance of Research)
The main importance of research is to produce knowledge that can be applied outside a research setting. Research also forms the foundation of program development and policies everywhere around the universe. It also solves particular existing problems of concern. Research is important because we are able to learn more about things, people, and events. In doing research, we are able to make smart decisions.
Marketing research is important because it allows consumers and producers to become more familiar with the products, goods, and services around them. Research is important to society because it allows us to discover more and more that might make are lives easier, more comfortable, and safer. It presents more information for investigation.
This allows for improvements based on greater information and study. It is very important. Research encourages interdisciplinary approaches to find solution to problems and to make new discoveries. Research is a basic ingredient for development and therefore serves as a means for rapid economic development.
The main importance or uses may be listed as under:
 It provides basis for government policies
 Helps in solving various operational and planning problems of business and industry
 Research helps in problem solving
 Is useful to students, professionals, philosophers, literary men, analysts and intellectuals.
Objectives of Research
1. To find out the truth which is hidden and which has not been discovered so far.
2. Aims at advancing systematic knowledge and formulating basic theories about the forces influencing the

1. 3.3- Accounting financial reporting Module-3 Responsibility accounting

2. Large organizations have operating activities which are voluminous. Controlling such activities in details & in every sphere is not possible for the top management. The top management has the total authority & responsibility. For the purpose of controlling efficiently, the total authority & responsibility is decentralized by forming small segments which are called responsibility centres & to these centres, specific costs & revenues are allocated. The evaluation of performance of each responsibility centre is done at the periodical intervals on the basis of pre-determined targets. Responsibility accounting represents a method of measuring the performance of various divisions of an organization. The term division with reference to responsibility accounting is used in a general sense to include any logical segment of an organization. Introduction :

3. Responsibility accounting may be known as decentralization of responsibility centre so that desired control can be ensured & thereby the goal of the organization can be attained. Responsibility accounting involves the following: Entire organization is divided into small responsibility centres In terms of revenues & costs, the responsibility of each responsibility centre is fixed; In terms of its predetermined target, the performance of each responsibility centre is measured. Meaning:

4. Anthony and Reece, “responsibility accounting is that type of management accounting that collects and reports both planned actual accounting information in terms of responsibility centres”. The emphasis in this definition is on setting the objectives of responsibility centres and then recording the actual performance so that the persons in charge of various activities are able to assess their performance . Institute of cost and works accountants of India, “it is a system of management accounting under which accountability is established according to the responsibility delegated to various levels of management and a management information and reporting system instituted to give adequate feedback in terms of the delegated responsibility. Under this system divisions or units of an organization under a specified authority in a person are developed as responsibility centres and evaluated individually for their performance” Definition:

5. Kohler E.L. “it is the classification, management, maintenance, review and appraisal of accounts serving the purpose of providing information on the quality”. Charles T. Hongren , “responsibility accounting Is a system of accounting that recognizes various decision centres throughout an organization and traces costs to the individual managers who are primarily responsible for making decisions about the costs in question.” Louder back and Dominaik , “it is the name given to that as[ ect of the managerial process dealing with the reporting if information to facilitate control of operations and evaluation of performance.” Cont....

6. Easy Identification: It enables the identification of individual managers responsible for satisfactory or unsatisfactory performance . Benefits : If a system of responsibility accounting is implemented, consider-able motivational benefits are assured . Data Availability: A mechanism for presenting performance data is provided. A framework of managerial performance appraisal system can be established on that basis, besides motivating managers to act in the best interests of the enterprise . Ready-hand Information: Relevant and up to the minutes information is made available which can be used to estimate future costs and or revenues and to fix up standards for departmental budgets . Planning and Decision Making: Responsibility accounting helps not only in control but in planning and decision making too. Delegation and Control: The twin objectives of management are delegating responsibility while retaining control are achieved by adoption of responsibility accounting system. SIGNIFICANCE OF RESPONSIBILITY ACCOUNTING

7. Under the supervision of a manager should be each responsibility centre & for the purpose of operating, it must be separable & identifiable. The independent measurement of performance of each centre must be capable of being done. Each responsibility centre should have clearly set targets. Each responsibility centre's budget should set targets which should be neither too high nor too low i.e., the budget should be one which can be realized. The top management should fully support the system. All managers of responsibility centres should participate in the formulation of plans & policies relating to responsibility centres for the purpose of providing motivation. For sincere performance of each responsibility centre the organizational environments must be conducive. PRE-REQUISITES OF EFFECTIVE RESPONSIBILITY ACCOUNTING:

8. Overall organizational goals are broken down into small goals, each of the small goals is meant for better achievement of a responsibility centre. With the attached responsibility each responsibility centre is tied up & there is adequate authority so that responsibility can be discharged. At the end of a period, evaluation is done of the performance of each responsibility centre & comparison of the performance is done with the predetermined targets. Thorough study is made of the achievements which are above or below the targets & remedial measures are adopted. Assessment is made of the contribution made by each responsibility centre & examination is done of how far it’s possible for the contribution to fulfilling its share in the ultimate organizational growth. Emphasize is given on the control of cost through planning. Use is made of the principle of ‘management by exception’ for the purpose of recording only those data where the actual performance of responsibility centre falls short of the set target & where the variance is beyond the reasonable limit. Objectives of Responsibility Accounting :

9. Vashist and Saxena , Advanced Cost and Management Accounting, Sultan Chand and sons. Jain and Narang , Advanced Cost Accounting, Kalyani . Arun Prasad Roy Chowdhury , etal ; Cost and Management Accountancy, New Central Book Agency. Horngren , Cost Accounting; A Managerial Emphasis, PHI. Prasad. N.K, Principles and Practice of Cost Accounting, Book Syndicate. ICWA Publications on application of costing principles in different industries. Jawaharlal, Cost Accounting, TMH Khan and Jain, Theory and Problem of Management and Cost Accouting , TMH. Books for Reference: