Explain why need in an innovation of cost accounting

First steps in changing of education

       After democratic revolution by 1990 all social & economic basic fundamentally changed in my country, especially in education. Earlier we mainly studied under education philosophy of socialistic countries. Between1990-2010 established private owned around 150 colleges & institutions in addition to 6 state universities which were founded previously. Academic understanding & practical activities started basing on foreign education experience, particularly some fundamental, well-known textbooks of Western countries translated into home language, herein authorities have applied to Asian development bank to accept appropriate contribution in training of economics subjects as essentials of accounting, as well as cost & management accounting. Lecturers & scholars at state owned universities entirely have covered with advanced courses in line of their lecturing & researching in home country & abroad.

What happened in practice?

      Since end of 1999 I have stated to give lectures at private college, indeed my new job of lecturing at college was for my very difficult, I have to prepare lecture’s file & manage seminar myself without other’s assistance. But however I have got over troubles successfully, to which significantly affected my applied mathematical knowledge & statistical mathematical experience possessed in accounting practice before. When I was giving lectures on cost accounting I observed that impossible to continue using textbooks published 10-20 years ago in English as well as Russian edition in which illustrated mainly direct calculation methods to solve any pending problems no applying to mathematical approaches. Meanwhile I have decided to develop newly direction in accounting based in applied mathematics & mathematical statistics, & I primarily have released modern textbooks in two volumes, Cost accounting, & Management accounting. Several  times I have give speech with presentation in line of offered with me researching topics at science conferences for  economics institution's & college’s lecturers, which called account of many researchers. I & my family members continued & extended scope & steps of researching. Many suggested methods which referred to cost & management accounting, also abstracts of financial analyzing fond 3-4 different ways to get the same accuracy result.

Do you have confidence in feasiablity of your offered methods?

      I reply at once “Yes” if anyone asks me the above cited question. For period,1990-2010, we had continued university's education as before, under socialistic style & it based further on knowledge importation, translated textbooks, copied materials from internet communication. But however I do not like ignore many positive effects in globalization of education. We began studied from alphabets of market economy, indeed following terminologies,  as debt notes, bond, money time value, leasing, cost processing, shareholders, equity, bankruptcy, solvency, private owned enterprises etc which were unknown for us still. I personally wanted to  change traditional economics university's training policy, I am as being common accountant, considered curriculum, training plan, translated from foreign language essential textbooks, case materials which followed at financial-accounting college education.

Innovation of lecture file had began in cost accounting subject

      I have decided to prepare lecturing files of cost accounting subject according to my individual intuition & previously accumulated knowledge. Indeed I started thinking of changing Economics University’s education since early period when I was studied in Russia as student. After graduating institute of economics I have published periodically articles on feasibility of application of mathematical & statistical modeling in finance & accounting in professional journals.  I trust, I am first researcher who put new idea into topic of variance analysis on manufacturing overhead, which calls real account of researchers as very difficult theme of accounting. Sometimes learners say that, occur troubles to simplify understand, and quick memorize also use in practice when refer to study variance analysis of mixed costs illustrated in many well-known fundamental textbooks issued by famous universities. Taking into account this situation I have decided to create new analytical methods of allocation, isolation, budgeting, behavior forecasting, controlling, empiric analyzing of mixed expenses (manufacturing overhead, operating expenses-general administrative & marketing). The methods created with me have following obvious differences & appreciable advantages over other methods are using at present time in training:

·         Possibility to describe cost behavior through simple straight linear equation:

y = a +b x.

·         Possible to calculate & explain each factor (fixed cost & variable cost separately) of cost isolation affected to cost variances simply, understandable, & mathematically.

·         Application of stepwise elimination of each dimension in order to determining affects as two variance (controllable variance & volume variance), than on basis of that further calculation of four variance (spending variance, idle capacity variance, variable efficiency variance & fixed efficiency variance).

·         To reach the same accurate result using 2-4 applied mathematical & statistical methods in parallel. For instance to compute two & four variances we used above cited stepwise elimination of each dimension & in addition to that differential calculation method.

·          Affordable to further develop & extend herein cited analyzing methods in other topics of cost & management accounting subjects, for example in standard costs variance analysis of factory overhead, direct labor & direct materials etc.

·         Also we offered very interesting & unique method of variance analysis on factory overhead with comparing levels of budgeting, standard & actual in one calculating table simultaneously.

We would like to acquaint members of Mongolian association of chartered financial analysts and other persons who interested in its academic and practical activities which put into financial analyzing and accounting innovation. Below given tentative topics of researching work which had been developed and published under editing by Prof. T. Yondon for lecturing period, 2004-2010. If below cited theses will call your attention we have willing to collaborate in their exchanging and publication further with pleasure.

        Brief list of researching papers developed and created with me clustered to following general titles:

·         Application of mathematics in isolation of mixed expenses to fixed and variable costs,

·         Application of applied mathematics on behavior analysis of mixed expenses,

·         Application of differential calculus, stepwise elimination method of variable dimensions, and statistical conversion of index on variance analysis of manufacturing overheard and nonmanufacturing costs,

·         Application of differential calculus, stepwise elimination method of variable dimensions in variance analysis of standard costs of manufacturing overhead,

·         Application of linear algebra and statistical weighted means in allocation and forecasting both of service departments and operating departments costs,

·         Application of stepwise elimination method of variable dimensions, and elementary mathematics on analysis of goods blend and their output,

·         Application of matrices in process costing,

·         Usage of derivative, least square method, combined methods on economic order quantity,

·         Application applied mathematics in break-even point analysis,

·         Application logarithm conversions in money time value analysis,

·         Stepwise method, differential calculus in variance analysis of standard costs of direct materials, direct labor & manufacturing overhead,

·         Preparing statements of variable costing & absorption costing net operating income  using mathematical conversion,

·         Application of full costs matrices in allocation of more than tree service departments etc.

·         Methodology of income tax burden analysis using combined methods as definite integral, derivative, differential calculation and graphical illustration etc.

          Above summarized each title of financial modeling and accounting innovation based on applied mathematics, mathematical statistics, some elements of theory probability had been elaborated and isolated into two or four different methods which lead to the same correct results. In addition to we always have chose to research any problems which cause troubles in management accounting practice and financial statement analysis for financiers, accountants and analysts in line of outsourcing activities of our association. Also had been issued with us detailed methodology of solving multiple discriminant scores analysis using computer application program SPSS in parallel with solution manual by hand which manage to get the same accurate results devoted to learners and students at college.

Association’s researching area covers very wide range of topics on business statistics, financing, banking, accounting, analyzing fields in their combined form associated with financial engineering as well as separately for each one. In addition to that initiators of association have published in line of above mentioned topics modern, moreover extremely interesting textbooks in accounted volume of more than 200 printer’s sheets for economics university students & postgraduates since 2004. Our researching group of co-authors is intending to conduct stepwise professional training course for Mongolian financiers, accountants & other persons, which will open by late September, 2011, they will be worked as Chartered financial analysts & interested in possessing analyzing &  estimating  methods. Also we are inviting Mongolian & foreign individuals as well as legal entities to collaborate in writing & publishing innovated textbooks for economics students & experienced staves who engaged in financial engineering – accounting modeling fields. This invitation also related to workers who interested in exchanging, discovering, developing, outsourcing, exporting of science papers, articles, complied researching final results, issues of modern textbooks in scope of above emphasized tentative thesis. New direction of accounting researching is significant necessary in this period when in my country have began the huge investment into mining  exploration industry & prospecting mineral recourses  as at Oyu Tolgoi  copper & gold manufacture, Tavan Tolgoi coal deposit and associated with these  development of infrastructure: railway, highway, power station, constructions, communication network, catering provision, education facilities etc. In connection with these factors rather than before raised the role of development in accurate cost calculation methods based in econometrics, financial engineering, multiple discriminant analysis (ANOVA, MANOVA), and applied mathematics etc. Further we would like to deal with permanent discussion among Association’s members in line of mutual interested urgent problems via comfortably for them communication system. We will translate appropriate materials into English or Russian for foreigners, who wish to acquaint with papers, textbooks, written by our co-authors, suggested new ideas with us. If you would like to set up bilateral communication relationship, we kindly ask to forward mail to us at once.  We are suggesting deal with open discuss in early of October over created with us new methodology to analyze & calculate effects of variances on factory overhead expenses, short abstract of these will be appeared through internet communications. Indeed in development history of accounting we primarily have discovered very unique & easy for pragmatically application methods in allocation, analyzing, forecasting & reporting of indirect (conversion) expenses by practicing as following: linear algebra, applications of definite integral calculus, stepwise elimination of variable factors, statistical index, drawing graphical illustration etc. Within the scope of activities of  association  for incoming period we have planned to conduct professional course for financiers, accounting analysts, & researchers on financial analyzing methods by hand of business statistics (multiple discriminant function analysis) in parallel  with computer application program, SPSS 17.0, which will render pleasant opportunity to obtain same calculated an answer, & compare stepwise processes used on both methods.    Main academic and practical lecturing will give directly by Prof. T.Yondon and under his supervising and consulting. We are registering independent researchers who would like to affiliate as members to Mongolian chartered financial analysts (CFA), nonprofit civil institution, which voluntary engages economics researching activities.  We shall give necessary knowledge to members through giving lecture, implimenting development of outsourcing in financial analyzing, exchanging experiences among analysts, organizing science conferences & plenary researching discussion, dealing with stepwise training course, provision with necessary information, publication textbooks & methodological materials, delivering  professional advises, issuing periodical journal etc, who really wish to possess unique techniques of analyzing.

We are intending to conduct outsourcing activities among registred members of Mongolian chartered financial analysts who have passed stepwise specialized training course and possesed necessary academic knowledge & analytical experience, the scope of activities would be included exchanging experience, publishing researching papers & articles, organization conference & discussions, analyzing quarterly financial statement for company via negotiated bilateral contract, giving professional consulting & lectures on line network or in auditorium facilities,  provisioning with relative methodological materials, issuing textbooks & brochures for learners, taking other measurements aimed for improving well-being of financial analysts. We planned next time to organize discussion among all persons who interested in financial analyzing independently in line of Association of Mongolian chartered financial analysts under the topic “Application of mathematical methods in calculation of variances on income statements prepared under both variable & absorption costing”  in scope of planning activities for 2011-2012, which created & published in textbook “ Financial statement analysis & modeling in forecasting” written by Prof. T.Yondon for 2009.

                          Future development direction on cost & management accounting

      All things in the world continuously change, develop into advanced level, nevertheless which integrate with others, in addition that further differentiate into independent parties.  It reflects its conditional changes as unifying & diversification. For last period seems that on economics science, particularly accounting subject was developing throughout on basic of following integrated knowledge branches as econometrics, mathematical statistic & theory of probability, applied mathematics, financial engineering , accounting modeling etc. We analyze   that  in practice accounting staves often face on their every activity steps of cost calculation with many difficulties, also doubtful problems, in that case they custom to solve above-cited  undefined questions by using most roughly methods,  sometimes go to themselves intuition. In training & researching most people custom to use traditional textbooks & manuscripts published in millennium copies over the world and internet information courses, by the way in which demonstrated techniques of methodology which had been created more than 40-50 years ago. Indeed the trouble situation generates in connection with allocation of indirect expenses & their  budgeting. Difficulties face while allocate manufacturing overhead expenses or operation expenses (marketing & general administrative) between many cost centers which classify into fixed & variable expenses. Indeed not seems   rationally innovation & development on creating & usage of indirect cost allocation methods in International accounting standard & other ruling materials. Instead of traditional technological stepwise process costing method, preferable application of ABC “Activity based cost” gives rather favorable opportunity for detailed distribution of management & marketing costs, but however the analyzing method of variance in operation cost still remained as before without any effective researching innovations. Taking into accounting these troubles we have thoughtfully studied the used in practice methods of indirect cost allocation & defining its variance influences (underapplied & overapplied overhead cost) which found remarkable application in economics universities training of my mother country. I really believe in that the new ideas developed in some aspects of cost & management accounting with me  & my family members will be able to find interesting in overseas countries with pleasure. Our researching area covers very wide range of topics on business statistics, financing, banking, accounting, analyzing fields in their combined form associated with economical engineering as well as separately for each one. In addition to that we published in line of above mentioned topics outstanding, moreover extremely interesting textbooks in accounted volume of more than 200 printer’s sheets for economics university students & postgraduates since 2004. Our group of co-authors is intending to conduct stepwise professional training course for Mongolian financiers, accountants & other persons, which will open by late September, 2011, they will be worked as Chartered financial analysts & interested in possessing of their estimating & exploring methods. Also we are inviting Mongolian & foreign individuals as well as legal entities to collaborate in writing & publishing innovated textbooks for economics students & experienced staves who engaged in financial engineering – accounting modeling fields. This invitation also related to workers who interested in exchanging, discovering, developing, outsourcing, exporting of science papers, articles, complied researching final results, issues of modern textbooks in scope of above emphasized tentative thesis. New direction of accounting researching is significant necessary in this period when in my country have began the huge investment into mining  exploration industry & prospecting mineral recourses  as at Oyu Tolgoi  copper & gold manufacture, Tavan Tolgoi coal deposit and associated with these  development of infrastructure: railway, highway, power station, constructions, communication network, catering provision, education facilities etc. In connection with these factors rather than before raised the role of development in accurate cost calculation methods based in econometrics, financial engineering, multiple discriminant analysis (ANOVA, MANOVA), and applied mathematics etc.   Further we would like to deal with permanent discussion among our clients in line of mutual interested urgent problems via comfortably for them communication system, but we are awfully sorry that we could not suggest the full abstract of expected papers / presentations due to technical facilities and in compliance with the International Convention for Author’s Copyrights to which Mongolia is affiliated.  We will translate appropriate materials into English or Russian for foreigners, who wish to acquaint with papers, textbooks, written by our co-authors, suggested new ideas with us. If you would like to set up bilateral communication relationship, herein do not hesitate, we kindly ask to forward mail to us at once.  We are suggesting deal with open discuss in early of October over created with us new methodology to analyze & calculate effects of variances on factory overhead expenses, short abstract of these will be appeared through internet communications. Indeed in development history of accounting we primarily have discovered very unique & easy for pragmatically application methods in allocation, analyzing, forecasting & reporting of indirect (conversion) expenses by practicing as following: linear algebra, applications of definite integral calculus, stepwise elimination of variable factors, statistical index, drawing graphical illustration etc.

Хичээлийн агуулгын хяналт шалгалт, үнэлгээний төлөвлөгөө