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Every student should prepare 750 to 1000 words write up.
Below topic is given for assignment. Every student should prepare 750 to 1000 words write up. One of class mate (Robert Storer) have submitted the attached solutions.Can you read the attached and solution, ask few provoking questions with below guide lines.• Ask a probing question.• Share an insight from having read the attached solution.• Offer and support an opinion or suggestion.• Validate an idea with your own experience.• Expand on the ideas in attached solutions Topic:A friend has asked you for some advice: "My small business now makes a profit; I am only too aware of this, as I now face a big tax bill each year, when my tax accountant has prepared my annual accounts. However, I don't feel much better off personally, so this is not quite what I had expected when I took the risk of resigning my job and setting up my own firm. The accountant is now trying to persuade me to pay her even higher fees, by letting her prepare monthly 'management accounts' for me. She says that I would also benefit from something called CVP analysis on my various product lines. I know that you are now doing an MBA. What does she mean here, and is this likely to be worth my paying her for?" Outline the differences between financial reporting and managerial accounting information and explain the benefits and potential problems associated with cost–volume–profit (CVP) analysis. How might the technique that you have discussed assist your friend in the effective management of his business' resources? What advice would you give him?********************************************************Solution:To understand the differences between financial reporting and management accounting we will establish what both are. Financial reporting is an umbrella covering the money within the company; it may be in a form of a financial statement, balance sheet, profit and loss, or any other extravagant options that are available. The primary function of financial reporting is to inform stakeholders on how, where, and what the monies of the company are distrusted. Allowing stakeholders to view assets verses liabilities, if the company is making a profit, where the original capital is and if any more has been invested, and the financial outlook for the future. All of these results and answers are used for two main purposes, taxes and stakeholders. However, the findings are used for many other functions, such as, comparison of competition and historical tracking of trends.Managerial accounting is designed to provide accounting information within the organization enabling the decision makers to make informed choices with both the management and control systems (Ittner and Larcker 2001). This umbrella includes break-even point analysis, profit-volume chart, marginal analysis, and cost volume profit. With these reports they stay in house, meaning they are private and not for the public eye.The differences between financial reporting and managerial accounting are:
