Trends in Management Accounting

The Institute of Management Accountants (IMA) has a series of YouTube Videos on Trends in Management Accounting. We will continue to review and discuss some of these trends to learn about developments in this field for discussions in this course.

Listen to the following two videos in the IMA series:

Required:

Comment and expand on a topic discussed in the videos and provide a real world example from the news or your own experience.

Presence during both weeks of the module and a minimum of three postings are expected, one original posting and two responses to colleagues. Minimum required participation does not guarantee a perfect score.

Rubric Name: MBA/MSHRM/MSL Discussion Grading Rubric – Timeliness v1

Criteria	Level 4 – Excellent	Level 3 – Proficient	Level 2 – Developing	Level 1 – Emerging

Quality of Initial Posting (first discussion only)	4 points Initial posting reveals a clear understanding of all aspects of the threaded discussion question; uses factual and relevant information; and demonstrates full development of concepts.	3 points Initial posting demonstrates legitimate reflection and answers most aspects of the threaded discussion question; full development of concepts is not evidenced.	2 points Initial posting demonstrates some reflection and answers some aspects of the threaded discussion question; Limited development of concepts is evident.	1 point Initial posting was not on topic; the response was unrelated to threaded discussion question; and post demonstrated only superficial thought and poor preparation.
Quality of Responses to Classmates	6 points Responded to the required number of students and to the professor, if appropriate, for every discussion. Demonstrated analysis of others’ posts; extends meaningful discussions by building on previous peer posts and offering alternative perspectives.	5 points Responded to almost all of the required students and to the professor, if appropriate, for every discussion. Provided comments and new information to other posts; not all responses promote further discussion of the topic.	4 points Responded to some students and to the professor, if appropriate, for every discussion. Little depth in response; agreed or acknowledged one other classmate’s initial posting.	3 points Did not respond to any student or the professor.
Reference to Supporting Readings/Information Literacy	3 points Refers to and properly cites either course and/or outside readings in both initial posting and responses to peers.	2 points Refers to and properly cites course and/or outside reading in initial posting only.	1 point Makes some reference to assigned readings with some citations or cites questionable sources.	0 points Makes no reference to assigned readings without citations or cites questionable sources.
Critical Thinking	4 points Demonstrates mastery conceptualizing the problem; viewpoints and assumptions of experts are analyzed, synthesized, and evaluated; and conclusions are logically presented with appropriate rationale.	3 points Demonstrates considerable proficiency conceptualizing the problem; viewpoints and assumptions of experts are analyzed, synthesized, and evaluated; and conclusions are presented with necessary rationale.	2 points Demonstrates partial proficiency conceptualizing the problem; viewpoints and assumptions of experts are analyzed, synthesized, and evaluated; and conclusions are somewhat consistent with the analysis and findings.	1 point Demonstrates limited or poor proficiency conceptualizing the problem; viewpoints and assumptions of experts are analyzed, synthesized, and evaluated; and conclusions are either absent or poorly conceived and supported.
Timeliness	3 points Initial post occurs in a timely manner (1 – 3 days into module) allowing ample time for classmates to respond and engage.	2 points Initial post occurs later (4 – 5 days into module) allowing limited time for classmates to respond and engage.	1 point Initial post occurs substantially late (6-7 days into module) allowing minimal to no time for classmates to respond and engage.	0 points Initial post occurs after the first week of the module.
Overall Score	Level 4 18 or more	Level 3 16 or more	Level 2 14 or more	Level 1 0 or more

Module 3 – Background

TRANSFER PRICING AND RESPONSIBILITY CENTERS

Modular Learning Objectives

Keep the following objectives in mind as you work through the material in this module:

Define the role of responsibility accounting.
Differentiate between controllable and uncontrollable costs.
Analyze structure of a decentralized organization.
Define profit centers, cost centers, and investment centers.
Compute transfer prices.
Identify three main transfer pricing approaches.

Required Reading

This module covers the role of responsibility accounting and responsibility centers. Explore these topics further while keeping the above six objectives in mind. Click on the three arrows to explore each topic in more detail:

Check Your Understanding

Check your understanding to make sure that you have a good grasp of the background material. If you are not comfortable with the concepts, review some of the material again or go to the optional resource for more examples.

Click on the quiz icon for an ungraded, 20-question true-or-false self-study quiz to check your progress. If you are not satisfied with the score, review some of the material again. For more in-depth information, review materials listed under optional reading at the bottom of this page.

Final Thoughts

A responsibility center is a part or subunit of a company for which a manager has authority and responsibility. The company’s detailed organization chart is a logical source for determining responsibility centers. The most common responsibility centers are the departments within a company.
When the manager of a responsibility center can control only costs, the responsibility center is referred to as a cost center. If a manager can control both costs and revenues, the responsibility center is known as a profit center. If a manager has authority and responsibility for costs, revenues, and investments the responsibility center is referred to as an investment center.

The existence of responsibility centers necessitates the setting of an internal price for the transfer of parts, goods, and services among units and responsibility centers. Transfer prices are contentious because management intervenes by creating policies which have an effect on the income of a responsibility center or unit.

Transfers among international jurisdictions involve additional considerations. Not only accounting rules, but income taxation and duties affect pricing strategies. Most countries have regulations to help prevent the use of this pricing method as a means of evading taxes or similar unethical and illegal activities.