Tóm tắt Luận án Completing accounting of cost and price management at irrigation construction companies in Vietnam

vide information on costs and price to serve the administrator’s functions such as planning, testing, decision making. The role of production cost and price management accounting in construction enterprises can be generalized in the following points: Recording selectively, providing information on the construction work/work category activities, inspection and explaining the plan implementation, cost estimating, and decision making. ... 5 1.1.2. Goals, tasks and affecting factors of production cost and price management accounting in construction enterprises. a) The objective of construction cost and price management accounting: cost controlling and evaluating the responsibility of centers in the organization, making decicions of administrator. b) The task of production cost and price management accounting in construction enterprises: Measuring, calculating the cost of a work /work category or a specific constructive activity, investigating the implementation of cost norms ... c) Factors affecting production cost and price management accounting in construction enterprises: Objective and subjective factors. 1.2. Irrigational characteristics affecting production cost and price management accounting: Constructive products are individual, valueable. Construction time is relatively long. To get the construction contract , the companies often have to experience bidding stages ..... 1.3. Determining cost methods 1.3.1. Target costing method (TC) : TC is a cost management methods used to achieve planned profit. 1.3.2. Kaizen costing method (KC ) : In Japanese, the term Kaizen means "improve" or "change for the better" this is the philosophy focusing on continuous improvement of the manufacturing process, engineering, business process support, and management. 1.3.3. Standard costing method Standard costing method is a traditional cost accounting method introduced in the 1920s, replacing the traditional cost accounting method based on historical costs. [78] [36] . 6 1.3.4. Construction activity characteristic affecting the choice of using the production cost and price management accounting method In the construction industry, apart from the factors that encourage technological development, capital investment, they also involve management activities. One of the management methods used in highly competitive manufacturing is the determination of target costs. 1.4. Basic content of production cost and price management accounting. Considering the management accounting process in relation with management functions, mangement accounting includes: Formalizing their unit objectives into their economic aims, making general and detailed estimation, collection and providing information on the results of implementing the objectives ... Therefore, to meet the needs of information serving enterprise management functions, the basic content of cost and price management accounting includes: - Identifying and classifying expenses - Setting norms and making cost estimation - Gathering and calculating the cost allocation for the price calculation objects - Controling costs and accounting responsibility - Cost analyzing to provide information for decision making - Making economic reports of production costs and costs 1.5. Cost and price management accounting in some countries in the world and experience for Vietnamese businesses In different countries, there is different application of cost and price management accounting. However, the cost and price management accounting in Vietnam is still quite new. It takes time, 7 specific plans and roadmaps to apply flexibly, in accordance with current conditions and future development directions . SUMMARY OF CHAPTER 1 In Chapter 1 of the thesis, the author in depth analyze general situation of cost and price management accounting. Its common basic theories of cost and price management accounting in the construction enterprises which are presented and analyzed in chapter 1 are the bases for the author to study, investigate the application state of cost and price management accounting in the irrigation construction companies in Vietnam. 8 CHAPTER 2 CURRENT SITUATION OF PRODUCTION COST AND PRICE MANAGEMENT ACCOUNTING IN IRRIGATION CONSTRUCTION COMPANIES IN VIETNAM 2.1. Overview of irrigation construction industry in Vietnam 2.1.1. The formation and development process of irrigation construction industry in Vietnam : Irrigation is taken priority to be invested to promote its efficiency. Irrigation is always a special priority of the Government and Party. Irrigation development has stemmed from the agricultural and rural development basis in the renovation process which makes an important contribution to the food security warrant, production restructures, natural disaster prevention, ecurity protection and safe production for all the citizens. 2.1.2. Overview of characteristics of production and business activities at irrigation construction companies as contractors : Due to the single, individual and various characteristics of construction works performed by the company, the accountant must take into account the cost accounting and price calculation for each separate project. After conducting a full acceptance of construction building , general cost and price accounting for all the work is performed. 2.1.3. Irrigation State Management System The organization of state management on irrigation works is described in the following chart : 9 Chart 2.5: Organization of state management on irrigation works (Source: Economic Research Center- Vietnam Academy of Irrigation) 2.1.4. Characteristics of the financial mechanism affecting the cost and price management accounting in irrigation construction industry in Vietnam Although the government has already had mechanisms and policies in operation management, together with the ordinance for exploitation and protection of irrigation works, the financial mechanism of businesses is still not guaranteed. Most of the exploiting irrigation enterprises works undergo insufficient expenditure, but the recharging of fund is inadequate. In the advantaged localities with quite good capacity, the refund of budget is only partially. In difficult ones, compensation are not frequent. 2.2. Actual situation of cost and price management accounting at irrigation construction companies in Vietnam 2.2.1. Identifying costs, sorting costs at construction irrigation companies in Vietnam : 100% of businesses classify 10 business production cost according to including charges into cost accounting (Sentence 14-Appendix 1D2) 2.2.2. Standardizing and making cost estimation in irrigation construction 2.2.2.1. Actual situation of cost starndardizing: 100% of irrigation works construction companies have set norms according to the guidance of the Ministry of Agriculture and Rural Development, the ministries and provincial people's committees in planning, announcing the construction norms for specific works of the branches and localities. 2.2.2.2. Actual situation of cost estimation In the actual survey at the Irrigation and Construction Companies, 100% of the Irrigation and Construction Companies conduct make cost estimations according to each work / work category. 2.2.3. Actual situation of collection and calculation of cost allocation for the price calculated objects at irrigation and construction companies 2.2.3.1 Actual situation of collecting cost information For recorded information held about production cost and prices at irrigation construction companies at the time of the survey, 9/52 (17.3%), construction irrigation companies are adopting Circular No. 200/2014 / TT-BTC dated December 22, 2014 of the Ministry of Finance, 43/52 (82.7%) of the company applied Circular No. 133/2016 / TT-BTC dated August 26, 2016 of the Ministry of Finance. (Sentence 2-Appendix 1D2) . 2.2.3.2. Situation of cost collection: Through surveys at the companies constructing irrigation works, it is shown that 100% of enterprises identify the object of collecting production costs as the work / work category. 11 2.2.3.3. Methods of determining the costs at irrigation construction companies : Currently, irrigation construction companies using the method of determining the cost of production by the method of transmission system. Those company has not applied the target cost management accounting method. 2.2.3.4. Actual situation of defining the cost production allocation model The irrigation construction companies distribute production costs related to subjects Specifically: There are 22/52 companies accounting for 42.76% The irrigation construction companies allocated production costs with direct expense of raw materials, 15/52 companies accounting for 29.66% of the enterprises allocated according to output value, 9/52 companies accounting for 16.55% of the enterprises allocated according to real volume, and 11.03% of enterprises allocate according to the estimated value ( sentence 26 - Appendix 1D 2 ) 2.2.3.5. Current status of unfinished product reviews Characteristics of irrigation construction is: Production according to the State orders, the cost of the works / work category is determined in advance. Therefore, there will be no uncompleted products at the end of the period. 2.2.3.6. Actual situation of cost estimation: Irrigation construction companies apply simple costing method to calculate each work /work category. 2.2 .4. Organizing cost control at irrigation construction companies 2.2.4.1. Actual cost control situation :According the survey, there are 2/52 (3.8 % ) companies have made the assessment on a regular basis cost evaluation to provide administrators with information. 12 2.2.4.2. Assigning responsibility in the irrigation construction companies In the actual survey, 100% of the companies have conducted decentralized management, clearly assigned and defined responsibilities of each management level in the company. 2.2.5. Actual situation of cost analysis to provide information for decision making The survey results show that only 15.4% of the enterprises know about the cost and price accounting at an early stage, but the irrigation construction companies in the North have had cost analysis served business decisions. 2.2.6. Actual situation of cost and price accounting report. According to the survey at the irrigation construction companies, only (6/52) equivalent to 11.5% of enterprises reported periodically or at the request of the managers (sentence 13-Appendix 1D2) . 2.3. Assessing the current situation of production cost and price management accounting at irrigation construction companies in Vietnam 2.3.1. The advantages of cost and price management accounting at irrigation construction companies in Vietnam - Regarding the identification and classification of production costs: Irrigation construction companies have basically determined the content of production costs and classified their production costs strictly according to the enterprise accounting policies. - Regarding the building of norms, cost and price estimation: Estimation work in irrigation construction companies has generally 13 applied regulations, norms and methods. cost estimates of the Ministry of Construction . - Regarding the economic efficiency of production value and cost: Companies apply the method of calculating prices by the direct method, this method will help managers to control costs closely, simply and quickly. - Regarding the preparation and presentation of accounting reports, in general, they are ensured according to regulations and in accordance with the requirements of providing information for users. -About accounting responsibilities: At the Company has a clear management hierarchy. 100% of companies have conducted cost estimation analysis with planned costs to enable administrators to control costs incurred, thereby taking cost savings. 2.3.2. The limitations and their causes First, the identification and classification of costs : is not valuable for management unit. Second, the setting cost norms and making cost estimation: Enterprises have set cost norms but not yet completed. Third, the composing and calculating cost allocation for the priced objects : The determination and calculation of arising costs for objects is not reasonable, not accurate to actual costs, unsuitable for the requirements of enterprise management and the evaluation of each department efficiency. - About applying the target cost and price management accounting: in the survey at the irrigation construction companis, it has not been applied. Fourth, cost control : illogical 14 - Responsibility accounting: in the companies, responsibility centers such as cost center, revenue center, profit center and investment center have not yet been identified. Fifth, cost analysis providing information for decision making : the companies have not applied appropriate information technology for decision making . Sixth, the report of cost and price management accounting: the preparation of management reports: little and sketchy. *Reasons - Objective cause : There has been no guidance from the State on the content, methods and organization of types, forms of ownership, scale, ... of Irrigation Construction Companies. - Subjective reasons : Because of the administrator’s awareness the accountant’s abilities , the contact between departments in the company , the staff building norms and estimation , the information and technology application .... SUMMARY OF CHAPTER 2 Chapter 2 clarifies the characteristics of the organization of production activities of the irrigation construction company in Vietnam and the impact on the accounting work in general and the production cost and price management accounting in irrigation construction companies in Vietnam in particular. On that basis, the author has analyzed and assessed the actual situation of cost and price management accounting in irrigation construction companies, pointing out the advantages, disadvantages and their causes, which are the bases to offer solutions to improve the production cost and price management accounting in irrigation construction works in Vietnam. 15 CHAPTER 3 COMPLETING THE PRODUCTION COST AND PRICE MANAGEMENT ACCOUNTING AT IRRIGATION CONSTRUCTION COMPANIES IN VIETNAM 3.1. Development strategies of irrigation construction industry and the completion requirements of the production cost and price management accounting in irrigation construction companies in in Vietnam 3.1.1. Development strategy of irrigation construction industry to 20 30 and the vision to 20 45 : Ensuring that people in the Mekong Delta, Central and mountainous areas live stably and safely when the sea level risea, guaranteeing that 3.8 million hectares of rice grown well 2 seasons per year, implementing effectively the measures to prevent and mitigate natural disasters in the climate change situation. 3.1.2. Business environment and information needs serving the decision-making process. The survey results showed that in the majority of companies the production cost and price management accounting has been used only to provide information to meet the regulations of the State for financial information, not enough for the managers to make decisions. 3.1.3. Completed requirements of the production cost and price management accounting of construction companies in the irrigation works in Vietnam. First, Completing the production cost and price management accounting must follow the issued legal system Irrigation construction companies that operate must comply with the laws and regulations on financial management of ministries and branches related to their operations. Therefore, completing the 16 production cost and price management accounting must also be in accordance with the law, the guiding circulars related to the price management accounting issued by the authorized agencies of the State. Second: Completing the production cost and price management accounting must be suitable with the operating characteristics, the scale, the characteristics of management organization and the scope of activities of the unit. Researching and completing the production cost and price management accounting of each unit must be based on the operational characteristics, scale, management organization and capacity of such unit to bring high efficiency in application of each unit. Third: Completing the production cost and price management accounting must ensure providing sufficient and timely accounting information for the unit administrator. In order to avoid distracting information affecting the business decision of the company, the company should use the information selectively. the information must be processed. Therefore, information providing should emphasize on the uniformity of requirements in a timely, complete and accurate manner. Fourth: Completing the production cost and price management accounting must ensure the requirements suitable with globalization trends. The completion of the production cost and price management accounting of irrigation construction companies must be in line with international practices. 3.2. Solutions for completing the production cost and price management accounting at irrigation construction companies in Vietnam 17 3.2.1. Completing cost identification and cost classification at irrigation construction companies in Vietnam For management accounting, costs need to be identified according to the behavior of costs. Such cost classification is important in cost analysis, planning, control and regulation of enterprise management costs . 3.2.2 Completing the norm building and cost estimation at the irrigation construction companies in Vietnam Irrigation works depends greatly on natural conditions, topography, and the status of the construction system, so it is impossible to set a common norm for the whole industry but the norm must be built individually. 3.2.2.1. Establish a system of cost norms First: Establish internal cost norms Second, cost norm builders must have highly professional qualifications and practical knowledge. 3.2.2.2. Build cost estimation according to administration costs: The companies are required to make: internal estimation for management demand at the unit, construction work/ word category estimation up on the operations , annual cost estimation. 3.2.3. Complete the collection and calculation of cost allocations for the priced objects at irrigation construction companies 3.2.3.1. Completing the organization of cost information collection : The collection of accounting information needs the participation of all relevant departments in the enterprise. 3.2.3.2. Completing the application of the target cost method at irrigation construction companies in Vietnam : For irrigation construction companies, the application of the target cost method at the 18 bid stage estimation and contracting one to ensure the bid victory and guarantee that the construction production achieves the target profit level is very necessary. 3.2.4. Completing control of the production cost and price management accounting at irrigation construction companies in Vietnam : Enhancing strictly inspection, control of production cost, construction supervision ... ❖ Supply stage: Periodically, the Material Department reviews the supplier, and reports back to the Company Director on whether to continue or remove the supplier. ❖ Delivery, receipt and warehousing : In order to avoid cheating on the number of supplies when the storekeeper goes through the procedures of receiving and warehousing, there must be an employee independent from the storekeeper ❖ Use of materials: Increasing inspection, construction supervision (responsibility of technical staff), requiring the inspection to be focused but not to be taken lightly of any job; b. Inspection procedures of direct labor costs: Need checking in workmanship before signing the contract, intensify checking, regular monitoring of labor productivity of workers. c. Procedures for controlling the cost of using constructional machines. - For the cost of outsourced construction machines: Need to find out the prices in many units for renting the machine, choose the unit that offers the lowest price. - For construction machines under the management of the company: strengthen irregular inspection of construction sites. d. General production cost control procedures. 19 - Control costs of materials share a similar procedure cost control of direct materials * Responsibility accounting is only done in enterprises with organizational structure of the management system clearly assigned. Depending on the characteristics of the organizational structure, the level of management decentralization and the goals of the enterprise administrator, it is divided into the respective responsibility centers. 3.2.5. Complete cost analysis to provide information for decision making at irrigation construction companies in Vietnam. In order to assess the use of costs and performance, companies need to develop cost expenditures to analyze cost fluctuations through cost reporting and cost information for the business management decisions. 3.2.6. Completing the reporting system for managing production costs and price : The product cost management report provides information about the total cost and unit price of each product manufactured by the enterprise. On that basis, it helps administrators analyze and assess the situation of saving production costs, reducing product costs to increase profits. The basis for making this report is based on a detailed book of production costs, product costs and cost production estimation of the work/ work category. 3.3. Conditions for the solution to be taken 3.3.1. For the State and the authorities The State, particularly the Ministry of Finance, should soon issue clearer and more specific regulations and documents on the management accounting system for all types of enterprises ... 20 Besides, similar to financial accounting, the Ministry of Finance should also organize training courses, widely disseminating management accounting knowledge to businesses. -For the Ministry of Construction + The construction standards, construction norms, ... used to calculate the construction cost of the Ministry of Construction should be assigned to professional construction consulting companies. + In bidding, it is necessary to study and set out specific regulations on bases and methods of bidding price creation, helping bidders to develop their own strengths in the process of determining bid prices. . - For Training organizations: Training types of engineers, construction price specialists, practicing certificates in the field of construction 3.3.2. For companies constructing irrigation works in Vietnam * Awareness of administrators: need to raise awareness and management skills of managers, to help administrators see the importance of management accounting in the accounting system. * Qualifications of management accounting staff: The information provided to the administrator is very important in the current dynamic and competitive economic economy. It requires management accounting to have professional skills as well as professional ethics to make sure to provide accurate information, not to leak the information and to have a sense of responsibility to work to avoid prejudice to the decision of the administrator thereby affecting business benefits. Therefore, it is essential to improve the professional competence of accountants and the division of accountant labor. 21 * Application of science and technology: The requirements of financial accounting in general as well as management accounting in particular need to be provided with information in a complete, fast, accurate and timely manner. Therefore, the management accounting system needs to meet this requirement. Especially in the era of economic competition today, when information is considered the key to the success or failure of a business. * Proposals and solutions for applying target costs to manage costs in the irrigation construction industry in Vietnam -Solutions for Contra