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BAO5522 Managerial Accounting

Published : 12-Oct,2021  |  Views : 10


Describe the understand the role of managerial accounting in the management process
  1. appreciate how accounting practice can inform management decisions about planning, action and accountability and reduce risk and uncertainty
  2. comprehend the language of managerial accounting and its inter-disciplinary nature
  3. become familiar with the economic, social, environmental and political context that frames managerial accounting practice
  4. apply enhanced problem solving, analytical, communication and interpersonal skills in providing managerial accounting information
  5. prepare, analyse, interpret and communicate performance information required for organisational planning, implementation, control and evaluation in terms of:
    1. cost accounting systems
    2. cost-volume-profit relationships
    3. incremental analysis
    4. operational and financial budgets
    5. capital investments
    6. sustainability reporting and performance management frameworks
  6. perform managerial accounting activities using manual and electronic means
  7. demonstrate technical literacy in applying statistical methods.


 Going by the details of the annual report, it can be commented that the 17 different frameworks of PWC are properly addressed for both the companies. It is noted that both the companies have effectively highlighted on the elements in various areas as discussed in the report and portrayed the facts through a graphical presentation that provides ease to the financial statement users so that a good understanding can be developed regarding the company. The information of the company that is Wolseley and Kingfisher is easily available, as well as assessable. It is due to the fact that the annual report contains all the desired information.

As per the annual report, it can be commented that the disclosure is adequate by the company and that the stakeholders will benefit from the system. However, to further enhance the comprehensives, both the companies can indulge into some activities such as both the companies can prepare their budget and compare with the actual result. This will help in comparison and know the reason for the deviations if any.  Secondly, a comparison can be conducted of the performance of the company over the past few years that will shed light on the trend and the reason for the major variations. Thirdly, the companies must disclose the target in an effective manner by segregating the long term, as well as short-term targets and the manner in which it can be attained. Lastly, the future course of action must be highlighted that will attract the investors.


While conducting the study some of the shortfalls that are noted are:

The disclosures in the annual report can be of an issue because the plans and policies can easily be spotted by the competitors.  This can hamper the smooth functioning as the rivals can have knowledge of the process followed by the company. Secondly, the quality of reporting is entirely linked to the plans and policies of the company, the operating cycle and the structure of the organization (Melville, 2013). Moreover, the annual report might be subjected to fraud and window dressing that will ultimately have a major impact on the process of decision making. Moreover, the disclosures pertain to a certain time span that can influence the users in a wrong manner (Needles & powers, 2013).

Extensiveness & Accessibility:

Wolseley strategic aim is to enhance the value of the stakeholder and specifically the customers at large. To ensure this, the company has stressed on well-trained associates.  it has improved the operating model and lead to a strong customer service by proper discipline and methods (Wolseley, 2016). On the other hand, the major objective of Kingfisher is to optimize the operational efficiency by driving the digital capability and creating an offer that is unique in nature (Kingfisher, 2016).  Concerning this, the company has aimed to generate £500m by the end of the five years.


As per the strategy of both these companies, it can be stated that both the companies aim to have a strong stability in the market and attain the financial, as well as on financial objectives. Moreover, the business priority of both the companies is enhancing the business and implements the strategy in the long run.

Going by the above discussion the strategic, as well as objective performance information of Wolseley is strong as it has a wide division that strives to attain numerous goals. On the other hand, when it comes to Kingfisher, it can be tagged as average because it still has the potential to add further things.

Extensiveness & Accessibility

As per the business model attached above, it can be commented that Wolseley sheds light on the human resources and the effective use of it.  The business model focuses mainly on the specialist training of the employees, health, and safety, enhancement of the system and introduction of many programs to motivate the people (Wolseley, 2016).

On the other hand, the business model of Kingfisher rests in an innovative manner that is an adequate emphasis on the customers, shareholders, suppliers, society, etc. Hence, the model aims to create value for the entire stakeholder group (Kingfisher, 2016). Customer needs are undertaken along with a deep emphasis on the concept of sustainability.


A strong should have the following traits because it enhances the reporting practices and quality when disclosed:

  • The business model should contain the major elements and drivers.
  • the activities of the company should be highlighted with the help of the model
  • The key driver maintenance and development must be present (Merchant, 2012)
  • In tune to the main drivers, the principal risk and variability need to be studied.

If the comparison of the disclosures in terms of the business model of both the companies is done then it can be stated that the Wolseley model is bad as it does not project adequate disclosure, however, the model of Kingfisher is properly drafted because it has effectively portrayed the information of their business model (Kingfisher, 2016).

Extensiveness & Accessibility:

The governance policies of both the companies indicate that the concept of corporate governance has been taken on a strict note and hence, adhered to all the policies. The board has discharged the duties in order to ensure a strong practice of corporate governance.  Moreover, it stresses on the concept of strategic planning  


Strong and effective corporate governance will shed light on the performance of the company and contribute to the success of the organization.  It will even help in the attainment of the strategic goals and aims, board appointment, termination, an overview of the risk management, segregation of responsibilities, reliance on financial responsibilities, etc (Libby et. al, 2011).

Going by the overall structure of the corporate governance of Kingfisher, it can be commented that the corporate governance is stabilized in a proper manner and that the policies shed light on audit, finance, disclosure and hence can be tagged as an effective one.  On the other hand, for Wolseley, the corporate governance is mainly concerned with the audit committee. Therefore, it can bring more transparency to the corporate governance report and hence, enhance the level (Horngren, 2013). Currently, it can be stated as an average one.

Both the companies should try to introduce the remuneration and the packages so as to create a better disclosure.

Extensiveness & Accessibility:

Going by the annual report and the extract provided above, it is evident that the risk of Wolseley is highlighted in a tabular manner (Wolseley, 2016). This indicates that a clear cut distinction is made and that the risks are disclosed in an effective manner. Risk management of Wolseley is projected in a better fashion on the other hand; the risk management of Kingfisher is not adequate as there is no proper indication of the risks faced by the company (Kingfisher, 2016). It is under the head accountability and internal control. The details are missing and hence, are not effective. More disclosure is needed to be made.


The projection of risk is done effectively in the case of Wolseley because it is represented in a tabular form, however; Kingfisher ranks low in terms of disclosure. Therefore, the management must look into the problem and address the risks in a defined manner.

Going by the overall risk management disclosure, the overall program of Wolseley can be commented as good because the disclosure is effective, however; it is average for Kingfisher as many disclosures are missing.

A remuneration policy that is effective enables to establish a strong trust and confidence betwixt the company and the shareholders (Graham & Smart, 2012). Wolseley has effectively portrayed the remuneration policy in an in-depth manner. it is in tune with the performance, as well as strategic objectives..

When it comes to Kingfisher a detailed disclosure and projection are provided for the remuneration and the performance targets. Therefore, the disclosure has been a strong one whereby the related parties can easily get a good grasp of the entire disclosure and the policies (Kingfisher, 2016).

The annual report of Wolseley projects in details the remuneration policy. The key features of the policy are stated in an effective manner where the implementation is even talked about. Moreover, the performance summary is clearly projected and regarding performance has been provided in a graphical presentation (Wolseley, 2016). The current fees are stated in the annual report hence, leading to immense transparency.

On the other hand, the remuneration policy of Kingfisher has been provided in a graphical form and various other sections have been clearly laid down that projects disclosure and transparency. A section has been clearly provided for the directors that are the main concern of the stakeholders.

Going by the projection of the remuneration policy, it can be commented that both the companies have made the concept of remuneration policy an element of immense disclosure (Deegan, 2011). This is sure to help the company in the long run as the company boasts in transparency.

Going by the annual report of Kingfisher, it can be commented that the company has provided the adequate details for the financial assets in the annual report. At page 89 and 126 of the annual report, the sale of financial assets is clearly stated (Kingfisher, 2016). Moreover, the company has provided adequate disclosure regarding the financial assets in terms of policies. On the contrary, in the case of Wolseley the matter relating to the financial assets is seen in the financial statements and disclosures are not adequate. It requires providing more disclosure (Wolseley, 2016).

The disclosure of the financial instruments is of vital importance because it influences the decision-making process of the end users. As per the discussion above, it is evident that Kingfisher has followed a principle of strong disclosure and the risks to which these assets are vulnerable are provided. However, Wolseley has frailties in the disclosures pattern and the information is less thereby will lead to weakness in the process of decision making (Davies  & Crawford, 2012).

Going by the annual report, it can be commented that the quality of information presented by Kingfisher will be of great help in the process of decision making and can be rated as good. However, Wolseley disclosure is dull and there is no adequate information thereby risk disclosure stands low and hence it can be rated as an Average disclosure.

The extract gathered from the annual report and forms part of the financial statements. The changes that have happened and the accounting policies that have been undertaken are stated. Both the companies have highlighted extensive disclosure and proper disclosures made.

It is important and imperative for the accounting standard to highlight the following:

  • The method of depreciation followed
  • Valuation basis
  • Depreciation or the rate of amortization (Choi & Meek, 2011)

Such attributes clearly indicated in the annual report.From the annual report and the level of disclosure, both the companies can be rated as Good when it comes to physical assets.The quality of reporting relating to physical assets is ranked as “Good” as both companies had disclosed both the qualitative and quantitative information about the physical assets to the concerned users.

The operations of both the company is globally and the annual report projects the customers journey in an in depth manner. The steps undertaken by the company to create value and to add utility is presented in the annual report of both the companies. Moreover, the sales done by the companies are highlighted adequately.

As per the information available in the annual report, both the companies that are Kingfisher and Wolseley can be tagged as bad because the quality of reporting in this segment ranks below the mark and any decision cannot be made out of it. however, the management of both the companies must stress on providing disclosures related to customers.The annual report of both the companies stresses upon the development phase of the people because it is the manpower that will enable to have a strong foothold in the market. For Kingfisher, the people strategy is laid down in a well-defined manner that projects a high level of disclosure.

Moreover, health and safety have been given due emphasis by Kingfisher (Kingfisher, 2016). On the other hand, the people strategy is defined elaborately in the case of Wolseley. As per the annual report, it is clearly indicated that people and product have been disclosed. Further, health and safety are disclosed in a tabular form (Wolseley, 2016).As per the discussion, it is clear that the performance of both the companies in terms of people is highly satisfactory. However, Wolseley has a strong level of disclosure because all the matter is discussed and highlighted in the annual report. On the other hand, when it comes to Kingfisher, the disclosures lack in certain aspects.

As per the discussion of the annual report, it is vivid that Wolseley can be rated as good because the entire community benefits, however, there has been some deficiencies when it comes to Kingfisher and overall it can be tagged as average.going by the information contained in the annual report it can be said that both the companies lag in the information provided in terms of innovation in goods and services. Performance in terms of innovation is missing in the annual proper and hence this lead to less accessibility to the financial statement users.

Kingfisher stresses upon the concept of innovation in products so that it can distinguish the services in contrast to the rivals. Innovation in terms of new organizational design has been reflected in the annual report. Further, the ways that Kingfisher will undertake is provided in the annual report. On the other hand, for Wolseley innovation has been stated in terms of skills and if fails to provide adequate disclosure in terms of research and development. The company should specifically stress on the concept of research and development and the process to bring new advancements (Wolseley, 2016).

This area of the report should include a comparison of company’s spending on research and development in the current year and prior year and total spend as a revenue portion. They also failed to disclose how the company could bring innovation in their current process and systems to improve product quality.

Going by the overall discussion, it can be said that both the companies have shortfalls in terms of disclosures and fails to make an impression in this section. Based on the above disclosure, the ranking of Kingfisher should be Average while that of Wolseley bad.The annual report of Kingfisher fails to provide adequate disclosure pertaining to brand and intellectual. On the other hand, Wolseley provided better disclosures as compared to Kingfisher. Adequate data for financial decision-making is missing.

When it comes to Kingfisher, it has only provided a brief of the intangibles that is the cost and the amortization. On the other hand, Wolseley has provided better information. The intangibles are identified and the useful life is provided. This provides a scope of better disclosure and aids in decision making (Wolseley, 2016).As per the given information in the annual report, Kingfisher disclosure on brand and intangible is ugly while that of Wolseley is average concerning the entire information.

For kingfisher, there is only a single extract present for the disclosure policy on supply chain. Disclosure provided on the establishment of a new supply chain. The road map and the milestones stated separately. On the other hand, Wolseley has disclosed the supply through a graph and adequate information is available in the extract (Wolseley, 2016).

The reporting of both the companies includes relevant points such as the smooth conduct of business in terms of goods and services, information pertaining to raw material storage, inventory, etc, the channel used in the goods and services provided.There is adequate information or disclosure provided by Kingfisher and therefore rates as good and even Wolseley has given relevant information therefore it is rated as Good.  

Both the companies in their annual report have indicated the disclosure of operational performance. In the case of Kingfisher, the notes have been supplemented with a diagram that provides deep emphasis on the operational performance. The programs undertaken to drive the operational efficiency is clearly reflected (Kingfisher, 2016). On the other hand, Wolseley provided displayed the operational performance in a more vivid manner and discussed regarding the same. Operational performance in terms of environmental efficiency is present in the report making the disclosure self-explanatory (Wolseley, 2016).

This section of the annual report must consist of the following as it enhances the level of reporting:

  • Evaluation of the performance of the past
  • Ways to enhance the future performance
  • Target based method to ascertain the operational performance (Brealey et. al, 2011).  

Based on the details provided in the annual report both the company can be rated as Good for the display of information in terms of operational performance.

As per the financial statement of both the companies, it can be a comment that both the companies disclose all the relevant information needed by the end users or the related parties. The economic performance is highlighted and hence, it is detailed in its aspect.


The financial statements of both the companies’ enable comparison with that of the previous year hence; the performance of the company can be easily tracked. The actual result can be compared with the figures that are estimated. It can be done through ratio analysis and hence, it facilitates comparison (Subramanyam & Wild, 2014). The notes to the financial statements further help in providing valuable information to the end users.

As per the reporting quality, it can be said that disclosure of information is done in an effective manner of both the companies and hence can be ranked as Good.Kingfisher and Wolseley stated in their annual report about the health and safety. Adequate emphasis is given towards the risk and how to mitigate them.  Sustainability has been discussed in the annual report thereby emphasizing the concept of corporate governance.

The environmental performance is adequately highlighted in the annual report.

Both the companies speak about their environmental performance in following areas in annual accounts:

  • The environmental performance is presented in the annual report under the performance heading.
  • The environment, health, and safety are highlighted in the report and the steps undertaken are disclosed.
  • Further, the incidents pertaining to the environment has been provided for the stakeholders to take vital decisions (Albrecht et. al, 2011).

As per disclosure provided by Kingfisher and Wolseley, the rating that can be given is good as the disclosures are relevant and will aid in decision-making.Both the companies have stated about their role for the environment in their annual report. Moreover, they have stated about the green house gas emission and their environmental role. Hence, adequate concern did in regard to climate change.

There are elements of environmental policy, however, the major ones that must be reflected in the annual report are:

  • role of environmental policy and how does it concerns the company’s vision, mission, and belief
  • ensuring compliance with the standards of the environment
  • measure to improve the performance of the environment (Shah, 2013)

The reporting of both the company stands strong and can be tagged as good. The disclosures in terms of environment and climate of both the climate is strong.

Kingfisher and Wolseley both had disclosed the information in quantitative and qualitative aspect. Performance is indicated in a clear-cut manner and the same is highlighted in the annual report.The segmental information of both the companies provides a detailed analysis of the breakup performance and the segment showing the product types that are traded by the two organizations (Porter & Norton, 2014). Moreover, the expenses, profit, and assets of every organization has been disclosed in an effective manner. The strategy of the company is in direct tune to the segmental information.


As per the disclosure of information in the annual report both the company can be rated Good as such information will help the users of the financial statements in taking an accurate decision.


Albrecht, W, Stice, E. & Stice, J. (2011).  Financial accounting. Mason, OH: Thomson/South-Western.

Brealey, R, Myers, S & Allen, F. (2014). Principles of corporate finance. New York: McGraw-Hill/Irwin.

Choi, R.D. & Meek, G.K. (2011). International accounting. Pearson.

Davies, T. & Crawford, I. (2012).  Financial accounting. Harlow, England: Pearson.

Deegan, C. M., (2011).  In Financial accounting theory. North Ryde, N.S.W: McGraw-Hill

Gibson, C. (2012). Financial statement analysis. Mason, Ohio: South-Western.

Graham, J. & Smart, S. (2012).   Introduction to corporate finance. Australia: South-Western Cengage Learning.

Horngren, C. (2013) Financial accounting. Frenchs Forest, N.S.W: Pearson Australia Group.

Kingfisher Plc. (2016). Kingfisher Plc 2016 annual report and accounts 2016. Retrieved from

Libby, R., Libby, P. & Short, D. (2011)   Financial accounting. New York: McGraw-Hill/Irwin.

Melville, A (2013).  International Financial Reporting – A Practical Guide. Pearson, Education Limited, UK

Merchant, K. A. (2012). Making Management Accounting Research More Useful. Pacific Accounting  Review, 24(3), 1-34.

Needles, B. E & Powers, M. (2013). Principles of Financial Accounting. Financial Accounting Series, Cengage Learning.

Porter, G & Norton, C 2014, Financial Accounting: The Impact on Decision Maker. Texas: Cengage Learning

Shah, P. (2013). Financial Accounting. London: Oxford University Press

Subramanyam, K & Wild, J. (2014). Financial Statement Analysis. McGraw Hill

Wolseley. (2016). Wolseley 2016 annual report and accounts 2016.

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