17.

MANAGEMENT REPORTING By CA CS Harish A Mathariya

8888 735 735 | 98220 93220
INTRODUCTION The three Guiding Principles to be followed are:
1. Lower the level of management, the more detailed should
Management needs information for decision making &
for evaluating performance, such information provided the report; & vice versa.
through reports in an appropriate manner. 2. Lower the level of management, should get the report its
more frequently & vice versa.
Importance of Reporting 3. Lower the level of management, less should be number of
1. Provides Information reports & vice versa
MEANING OF MANAGEMENT REPORTING:
2. Helps in Selection
Is a mechanism for monitoring the ‘mission’ of an
3. Role in Control System organization in terms of objectives set out in planning.
4. Helpful in Profitable Operations The Need for Management Reporting
To produce timely and reliable information in order to
5. Follow the Principle of Management by Exception
make high-quality business decisions & to understand
6. Helpful in Achieving Overall Objectives problems, for comparisons with competitors & implement
controls to hold employees accountable for budgets.
LEVEL OF MANAGEMENT AND REPORTING
Common challenges in way include:
First Line Management  Selecting appropriately and correctly using the right system.
 Manipulating data in order to display the best metrics.
Middle Management  Implementing an inefficient accounting does not allow for
timely report
Top Management  Ensuring the integrity of the data.
 Adopting reporting processes at incorrect stakeholder levels
ESSENTIAL COMPONENTS TO MANAGEMENT REPORTING
 Begin with accurate healthy data & metrics to support business strategies
 Data should support both the long- and short-term visions, & should be trustworthy
 For example, failing to remove data for a discontinued product will negatively skew
remaining data
Developing a Successful Management Reporting Programme

Discovery: Identify stakeholders & communicate mission to them

Analysis: Develop data definitions to ensure everyone interprets it the same way. Keep the data tight
and prioritize
Report Creation & Delivery: Create concise reports and determine the appropriate delivery method
Implementation: establish a governance process and policies to ensure data health across the
organization
Access Point: Create a common place for users to access data

Feedback: Collect comments and suggestions

Inhouse IT Cabalities: ensure that IT personnel can manage necessary systems and issues if they arise
GENERAL PRINCIPLES OF REPORT PRESENTATION
Report should have a proper title subheadings & paragraph.
Relate to certain period,
Should be factual.
Should be brief and concise but clear.
Report should be prompt
It should distinguish between controllable & non-controllable factors
Appropriate remarks should be given.
Should be periodically reviewed.
The report must be correct within the permissible degree of inaccuracy.
Should draw manager’s attention immediately to exceptional matters.
Visual reporting through graphs, charts and diagrams preferred
Be ensured that comparisons between same matters.
Analysis should be given for comparison between actual and budgeted.
Format of report should remain unchanged from period to period.
 CLASSIFICATION OF REPORTS Reports

Forms Contents Frequency

descriptive tabular graphic production sales cost finance routine or special

al irregular

SPECIAL REPORTS: Are to be presented after thoroughly investigation of problem.

Matters to covered by special reports:
1. Effect of idle capacity on the cost.
2. Make or buy decision.
3. To replace labour by machines or not.
4. To explore the new market.
5. Whether to continue the sale of the product at a very low rate during depression.
6. Cost reduction schemes. FORMS OF PRESENTATION OF
7. Most suitable method of raising funds. INFORMATION
8. Most suitable method of investing surplus cash. 1) Verbal (or oral): Group meetings,
9. Whether to purchase on higher fixed assets. seminars, conferences, or interviews
10. Research and development expenditure problems. 2) Written: Most usual form of
11. Effect of labour disputes on production. reporting, information takes the form
of a written report.
12. Price fixation problems.
 Management Reporting
1. Management needs information for - 6. Which of the following is a kind of information report?
(A) For introducing alterative management for the organization (A) Trend reports (B) Analytical report
(B) To effectively carry out disinvestment programme (C) Activity reports (D) All of the above
(C) Arriving at decisions and for evaluating performance to run the
business effectively. 7. Management reporting can be performed as-
(D) The benefit of society at large. (A) Internal reporting (B) External reporting
(C) Both (A) & (B) (D) None of the above
2. …………...can be defined means of communication, usually in the written
form, of facts which should be brought to the attention of the various levels of 8. The back bone of any organization is
management who can use them to take suitable action for proper control. (A) Information (B) Employee
(A) Formats B) Proforma (C) Management (D) Capital
(C) File (D) Reports 9. Which of these is usually written in a form of a memorandum?
(A) Informal reports (B) Formal reports
3. Top management like to get information like-
(C) Professional reports (D) Business reports
(A) Trend of the business, cash flow and fund flow etc.
(B) How to operate machine effectively? 10. Which of the following is a type of matter may be covered in a special
(C) Petty cash budget report?
(D) Latest ruling of High Court on juris. prudence (A) Feasibility study for a project (B) Cost reduction schemes information
(C) Data on make or buy decision (D) All of the above
4. A management has only a minimum time to exercise control. Hence, the
activities, which are not carried out according to planning and budget, are 11. …… are presented after making and investigation of problem which
highlighted before the management. This is the way of following the principle require to be investigated.
of (A) Memorandum (B) Special reports
(A) Management by forecasting (B) Management by exception (C) Summary (D) Special facts
(C) Management by unity (D) Management by delegation 12. ……………is very important method of presenting information to the
management in a pictorial manner and attracts the eye of the recipient more
5. Financial control report comes under
quickly and forcibly.
(A) Dynamic financial reports (B) Static financial reports
(A) Tabular Reports (B) Descriptive Reporting
(C) Extensive Activity report (D) None of the above
(C) Graphic Presentation (D) All of the above

CA CS Harish A. Mathariya 98220 93220 Yes Academy 17.1

8888 545 545
 Management Reporting
13. …………are presented in the form of comparative statements. 19. Which of these is not a parameter of a formal report?
(A) Descriptive Reports (B) Graphic Presentation (A) Presentation (B) Complaint
(C) Transactional Analysis: (D) Tabular Reports (C) Information (D) Request

14. Which of the following general principle that is required to be followed 20. Which of these reports is written before starting a new project?
while reporting? (A) Feasibility report (B) Periodic report
I. Report should have a proper title. (C) Trouble report (D) Progress report
II. Report should be in good form and should have sub-headings and
paragraph. 21. Which of these must never be a basis for technical report?
III. Format of report should change frequently. (A) Facts (B) Tests
IV. Report should factual. (C) Personal prejudices (D) Experiments
V. Report need not to save time of the management.
22. Reports present conclusions based on:
Select the correct answer form the options given below.
(A) Intuition (B) Belief
(A) I and III only (B) II & IV only
(C) Impression (D) Investigation
(C) II, III and V only (D) IV, I and II only
15. Collecting comments and suggestions from users to discover ways to 23. Which of these is not a parameter of a report?
continuously improve the data and process can be described as (A) Ability to acquire additional information
(A) Implementation (B) Exception (C) Feedback (D) Order (B) Quality of additional information acquired
(C) Ability to arrive at subjective evaluation
16. Which of these reports provide information without any evaluation? (D) Ability to provide worthwhile recommendation
(A) Informational (B) Interpretative
(C) Routine (D) Progress 24. The chronological development of information in the body of the report is
done according to the:
17. …………………...report provides rational findings. (A) Logical sequence of events (B) Order in which events occurred
(A) Informative (B) Interpretative (C) Routine (D) Progress (C) Choice of the writer (D) Collection of data
18. Which of these is not mentioned in a progress report? 25. Which of these must be avoided in a technical report?
(A) Name of project (B) Right choice of instruments (A) Facts (B) Logical conclusion
(C) Nature of work (D) Amount of work left (C) Objective evaluation (D) Subjective evaluation

CA CS Harish A. Mathariya 98220 93220 Yes Academy 17.2

8888 545 545
 Management Reporting
26. Which of the following set of report is classified according to their
contents?
(a) Descriptive reporting; tabular reports and Graphic reports
(b) Routine reports and Special reports
(c) Production reports; Sales reports; Cost reports and Finance reports
(d) Graphic presentation; Routine reports and Finance reports

27. Which of the following is not a step taken towards implementing an

effective management reporting programme?
(a) Discovery (b) Access point
(c) Finance (d) Feedback

28. Following is not an advantage of effective Management reporting system:

(a) Improves decision making (b) Improves responsiveness to issue
(c) Improves efficiency of resources (d) None of the above

29. Top Management is more concerned with:

(a) Ageing Schedule of Debtors
(b) Product Cost Variance Analysis
(c) Capital Expenditure and Forward Commitments
(d) None of the above

CA CS Harish A. Mathariya 98220 93220 Yes Academy 17.3

8888 545 545