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Effectiveness of Control Systems: Review of Literature-Managerial Accounting Assignment Help

Task:

NAB
1. Executive summary
2. Introduction – the aims and scope of the report

3. Review of Topic and review of Literature
Present a summary of the literature researched on the topic of executive performance evaluation and remuneration in public companies. Include a discussion on the effectiveness of control systems within companies focussing on management/executive performance and reward systems.

– Research the

and discover academic articles discussing methods of measuring Executive Performance. (Executive Compensation in the USA)

4. Company reviews – Managerial Accounting Assignment includes the investigative report – answering the questions about the remuneration report as required in the task requirements above.

① Research and discover the corporate goals of each of the companies reviewed. (Review the Chairman and CEO’s Statements in the Annual Report and the Corporate Website for this information.)

② (from the task) DETAIL of the METHODS used to calculate both the STIs and the LTIs that are proposed to be paid to the executives and also the methods that WERE used to calculate the performance pay for the prior 3 periods (years).

– Research and discover how the senior managers are having their performance assessed. The CEO and top 5-10 executives will usually be listed. NOTE – DO NOT REVIEW THE REMUNERATION OF THE BOARD OF DIRECTORS OTHER THAN THE EXECUTIVE MEMBERS SUCH AS THE CEO

③ (from the task) the academic literature available on each of these methods. For example, a company may use a ‘(Balanced) Scorecard’ of measures which include both financial and non-financial measures. (Such as Return on Investment – Financial measure, and Net Promoter Score – Non-financial measure.)

Please note: Only ONE method for the STI calculation and ONE method for the LTI needs be considered and must include at least one NON-FINANCIAL performance measure.

You are to determine whether the literature supports the use of these measures and how successful the researchers believe them to be.

④ (from the task) examine the results of the selected company over the past 2 years (2016 and 2017) and report on whether you believe these measures are a reasonable measure of performance of their executive team, taking into consideration the returns to shareholders. (i.e. is the remuneration increasing from the STI’s and LTI’s paid in proportion to increases in the share price and/or profitability of the Company?)

– Discover the performance of the company from a shareholder’s perspective by reviewing growth (or decline) in the company’s share price and dividends paid. (Use a copy of the share price chart for the past 3 years)

– Research commentary on the company’s performance and documenta few (no more than THREE!) to enter into your report.

– The GROUP should then write up a comparison (analyse, compare, AND contrast approaches) for each of the year’s results.

⑤ Reflect and COMPARE the information given in the most recent year’s annual reports to that given 3 years prior. You should focus on whether there is an increasing level of disclosure for your allocated company, or the same amount and/or a decline in transparency. Thoroughly report your findings and present your comparisons.

(Your group should write up your findings AND conclude if your company is being truly transparent and if it is producing a ‘good’ result for the shareholders. In essence, you are concluding whether you believe their management control systems are working)

5. Summary of findings – Bring together the findings of the group members about the company and a discussion about how effective (or ineffective) the company’s remuneration program appears to be in improving company performance.

6. Analysis of remuneration methods used – Ensure you consider how well the company’s approach worked in encouraging higher performance by the executive team and consider if this translated to higher COMPANY PERFORMANCE

7. Recommendations – present any recommendations you may have, SUPPORTED BY THE LITERATURE, on how the company may improve the reporting or broaden their performance measures.

8. Conclusion – Only a conclusion of your findings and perhaps your group’s nomination of which company has the best remuneration system and what your group believes can be learned from the report and the method of remunerating manager’s in organisations. ‘Remind’ the reader, why you undertook the report and the purpose of remuneration systems. It should LINK with the Introduction!

– Draw conclusions on whether the company’s performance measurement systems are producing results for the shareholders.