AIMS
To
develop the ability to use a computer system safely
and effectively and to understand the need for
data and information to be kept confidential and
secure. To develop knowledge and an understanding
of how organisations provide basic management
information for decision-making, planning and
control.
OBJECTIVES
On
completion of this paper, candidates should be
able to:
- carry
out simple visual safety checks on hardware
and follow appropriate powering up and shutting
down procedures
- understand
the purpose of passwords
- access,
amend, save and print documents and other
files and exit from the relevant software
- use
appropriate computer file and folder names
- follow
procedures for taking back-up copies of computer
files
- understand
different types of risk including viruses
and hacking
- understand
relevant security and legal regulations covering
data protection, copyright, health and safety
and record retention
- seek
assistance when difficulties occur when working
with computers
- recognise
the need for management information
- identify
different elements of cost
- identify
different sources of income and expenditure
- code
and extract income and expenditure correctly
- deal
with problems / errors correctly
- provide
comparisons on costs and income
- use
relevant software applications to access,
analyse, present and communicate information
(accounting package, spreadsheet, word processing,
e-mail)
- handle
confidential information in the correct manner
- present
information using house style.
POSITION
OF THE PAPER IN THE OVERALL SYLLABUS
No
prior knowledge is required before commencing
study for Paper 2. This paper provides the basic
techniques required to use a computer system safely
and to effectively recognise, provide and maintain
management information.
Candidates
require a sound understanding of the methods and
techniques covered in this paper to enable them
to move on to the more complex systems and management
control problems covered at subsequent levels.
Some
of the methods introduced in this paper are revisited
and extended in Paper 4, Accounting for Costs.
SYLLABUS
CONTENT
1
Use computer systems safely and effectively
(a)
Visual safety checks
(i)
hardware components
(ii)
plugs and cables
(b)
Types of system
(i)
stand-alone PC
(ii)
networked system
(iii)
mainframe with terminals
2
Security, confidentiality and legal issues
(a)
Confidentiality
(i)
system access controls
(ii)
individual file (document or spreadsheet) protection
(b)
Security
(i)
back-up copies
(ii)
archiving
(iii)
secure storage
(iv)
theft and fraud
(c)
Legal regulations
(i)
data protection legislation
(ii)
VDU regulations
(iii)
computer-related Health and Safety
(iv)
document and record retention
3
Management information
(a)
Introduction to management information
(i
) the relationship between financial and management
accounting
(ii)
the purpose of management information: decision
making, planning and control
(b)
Reporting management information
(i)
methods of extracting, analysing, presenting and
communicating information (including letter, memo,
report and e-mail message)
(ii)
handling confidential information
(iii)
using software to perform (b)(i) and (ii) when
relevant
(iv)
understanding of the organisation’s accounting
systems and administrative procedures
4
Income and expenditure
(a)
Elements of cost
(i)
materials
(ii)
labour (including makeup of gross pay)
(iii)
expenses
(b)
Responsibility centres
(i
) cost centres
(ii)
profit centres
(iii)
investment centres
(c)
Relevant documents / sources of information
(i)
purchase orders and purchase invoices
(ii)
sales orders and sales invoices
(iii)
policy manual
(iv)
payroll
(v)
management reports and spreadsheets
(d)
Organisational structures
(i)
coding systems
(ii)
cost classification
5
Comparisons
(a)
Sources of information for comparison
(i)
previous period data
(ii)
corresponding period data
(iii)
forecast data
(iv)
ledgers
(b)
Variances
(i)
adverse / favourable
(ii)
exception reporting
(iii)
controllable / non-controllable
(iv)
reports
6
Decision-making
(a)
Marginal costing
(i)
contribution
(ii)
break-even
(iii)
margin of safety
(b)
Management information
(i)
extraction from relevant sources
(ii)
use in decision-making
(iii)
role in organisation
EXCLUDED
TOPICS
The
following topics are specifically excluded from
Paper 2:
- software
and systems development
- database
design and database software.
KEY
AREAS OF THE SYLLABUS
All
areas of the syllabus are equally important.
APPROACH
TO EXAMINING THE SYLLABUS
The
examination is a two-hour paper. It can be taken
as a written paper or as a computer based exam.
Assessment will be based on multiple choice questions
covering the breadth of the syllabus, testing
that candidates have acquired the necessary knowledge
of the areas identified above.
No.
of marks
50
multiple choice questions: 100
RELEVANT
TEXTS
There
are a number of sources from which you can obtain
a series of materials written for the ACCA CAT
examinations. These are listed below:
STUDY
SESSIONS
1
Nature, safety and use of computer systems
(a)
Describe the different types of hardware configuration:
stand-alone PC, networked system, mainframe with
terminals
(b)
Explain where the different types of hardware
configuration may be used
(c)
Describe the hardware and software components
of a computer system
(d)
Describe simple visual safety checks on computer
hardware and ancillaries (plugs and cables) and
explain their importance
(e)
Describe the correct process for powering up and
for shutting down computer systems
(f)
Describe how to save, transfer and print documents
(g)
Outline the requirements of health and safety
legislation related to the use of computer hardware
2
Computer system confidentiality and security
(a)
Explain computer system access controls and procedures
for individual file protection
(b)
Describe procedures for backing-up, archiving
and storing information securely
(c)
Discuss the prevention of computer fraud and data
corruption, and of hardware/software problems
and failure
(d)
Discuss security issues related to the location
of hardware and software
(e)
Outline the requirements of data protection legislation
relating to computer software/information
3
Introduction to management information
(a)
Discuss the purpose of management information:
planning, control and decision-making
(b)
Distinguish between data and information
(c)
Describe the features of useful management information
(d)
Describe and identify sources and categories of
information
(e)
Compare cost and management accounting with external
financial reporting
(f)
Explain the limitations of cost and management
accounting information
(g)
Describe the accounting technician’s role in a
cost and management accounting system
4
Reporting management information
(a)
Discuss methods of analysing, presenting and communicating
information
(b)
Describe the nature of general purpose application
software packages, including word processing and
spreadsheets
(c)
Identify suitable formats for communicating management
information according to purpose
(d)
Identify the general principles of distributing
reports (e.g. procedures, timing, recipients)
including the reporting of confidential information
(e)
Interpret information presented in management
reports
5
Aspects of business organisation and accounting
(a)
Describe the organisation, and main functions,
of an office as a centre for information and administration
(b)
Describe the function and use of a manual of policies,
procedures and best practices
(c)
Identify the main types of transactions undertaken
by a business and the key personnel involved in
initiating, processing and completing transactions
(d)
Discuss the need for effective control over transactions
(e)
Explain and illustrate the principles and practice
of double-entry book-keeping
(f)
Describe and illustrate the use of ledgers and
prime entry records in both integrated and interlocking
accounting systems
(g)
Identify the key features, functions and benefits
of a computerised accounting system
6
Management responsibility and performance measurement
(a)
Explain and illustrate the concept of cost centres
(b)
Explain and illustrate the concept of profit centres
(c)
Explain and illustrate the concept of investment
centres
(d)
Describe performance measures appropriate to cost,
profit and investment centres (cost / profit per
unit / % of sales; resource utilisation; ROCE
/ RI)
(e)
Apply performance measures appropriate to cost,
profit and investment centres
7
Cost units, cost classification and profit reporting
(a)
Explain and illustrate the concept of cost units
(b)
Describe the variety of cost classifications used
for different purposes in a cost accounting system,
including by responsibility, function, behaviour,
direct/indirect
(c)
Describe and illustrate the nature of variable,
fixed and mixed (semi-variable, stepped-fixed)
costs
(d)
Describe and illustrate the classification of
material and labour costs
(e)
Prepare, and explain the nature and purpose of,
profit statements in absorption and marginal costing
formats
(f)
Calculate the cost of a product or service
8
Elements of cost
(a)
Describe and illustrate the accounting for material
costs (NB stock issue pricing is excluded)
(b)
Calculate material requirements, making allowance
for sales and product/material stock changes (NB
control levels
and EOQ are excluded)
(c)
Describe and illustrate the accounting for labour
costs (including overtime premiums and idle time)
(d)
Prepare an analysis of gross earnings
(e)
Explain and illustrate labour remuneration methods
(f)
Calculate the effect of remuneration methods and
changes in productivity on unit labour costs
(g)
Explain and illustrate the process of cost apportionment
and absorption for indirect costs (excluding reciprocal
services)
9
Source documents and coding
(a)
Explain the use of codes in categorising and processing
transactions and the importance of correct coding
(b)
Describe the material control cycle (including
the concept of ‘free’ stock, but excluding control
levels and EOQ) and the documentation necessary
to order, receive, store and issue materials
(c)
Describe the procedures required to ensure the
correct authorisation, coding, analysis and recording
of direct and indirect material costs
(d)
Describe the procedures and documentation required
to ensure the correct coding, analysis and recording
of direct and indirect labour costs
(e)
Describe the procedures and documentation required
to ensure the correct authorisation, coding, analysis
and recording of direct and indirect expenses
(f)
Describe the procedures and documentation to ensure
the correct coding, analysis and recording of
sales
10
Information for comparison
(a)
Explain the purpose of making comparisons
(b)
Identify relevant bases for comparison: previous
period data, corresponding period data, forecast/budget
data
(c)
Explain the forecasting/budgeting process and
the concept of feedforward and feedback control
(d)
Explain the concept of flexible budgets
(e)
Use appropriate income and expenditure data for
comparison
11
Variances
(a)
Explain the concept of exception reporting
(b)
Calculate variances between current actual and
historical/forecast data (N.B standard costing
is excluded)
(c)
Identify whether variances are favourable or adverse
(d)
Identify possible causes of variances
(e)
Explain factors affecting the decision whether
to investigate variances
12
Marginal costing and decision-making
(a)
Explain and illustrate the concept of contribution
(b)
Calculate and utilise contribution per unit, per
£ of sales and per unit of limiting factor
(c)
Explain and calculate the break-even point and
the margin of safety
(d)
Analyse the effect on break-even point and margin
of safety of changes in selling price and cost
(e)
Describe the assumptions, uses and limitations
of marginal costing and break-even analysis
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