This exercise continues the discussion from pages 398-400 (Management accounting: a definition) of the textbook and provides an example to help you appreciate how the principles of management accounting apply in practice.

When you started your studies, your aim was to create value for yourself both currently in educational terms and financially through the prospects of better remunerated employment once you graduate. As your course progresses and you build up your knowledge, you are increasing your value to future employers and to society as a whole. You gather feedback on your performance to date from your tutors and from your own assessment of your progress so far and you use this feedback to inform your strategic decisions for the months and years ahead: do you need to put in more effort as a whole? Are there weaknesses in your results so far that need attention with more time and effort being devoted to certain gaps in your knowledge or weaknesses in certain areas? Through these considerations, you plan for the future and formulate your strategy for success today and in the long-term. Feedback is also used to plan your long, medium and short-term activities: you know where you want to go, and you plan and work on each every day activity (operational decisions) to ensure that your long-term plan will be fulfilled. Feedback and your own assessment of your progress to date enable you to control your daily activities as you pursue your long-term goals. Knowing the areas in which you must improve will enable the efficient use of resources, both time and your learning opportunities in each class you attend. Results enable you to measure your performance, although you will not be required to report these to other stakeholders. As well as your results (in the form of numbers), there are the additional skills (non-financial performance) you are building up such as expanding your knowledge of software programmes, learning to work independently or learning to work effectively as part of a team. Your day to day studies can be seen as part of your approach to safeguarding the education you are enjoying so that it can be put to good use in the future. While you will not be applying corporate governance procedures to your studies, you are managing the risks of performing less well than expected on certain tasks by ensuring that you are studying effectively and leaving nothing to chance. Likewise, where your performance has dipped below the standard you have set yourself, you can use your experience of what went wrong to develop controls to ensure that the same problems do not give rise to underperformance in the future. You may even reward yourself by giving yourself time off from studying once you have completed a piece of assessment or gained a particularly good mark. Once you have graduated and landed your dream job, you will need to preserve the value of your education and professional qualifications by undertaking regular continuing professional education. All businesses and not-for-profit organisations apply the management accounting principles in the same way in their conduct of day to day business and long-term planning and decision making.