New Perspective of Risk Cost Management Accounting

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New Perspective of Risk Cost Management Accounting

[Abstract] cost management Accounting is the cost accounting and management accounting two disciplines integrated interdisciplinary research that is conducive to better develop the accounting field, and improving management level. Cost of risk management is a modern cost accounting management accounting new areas of research, is yet to be fully research and explore new topics. In this paper, the cost of risk management accounting cost management accounting system on the original breakthrough in cost management accounting and risk related issues were discussed such difficulties.
[Key words] risk management cost management accounting cost accounting cost accounting management accounting is

management under the new accounting and cost accounting with the new areas, including the cost of risk is the field of management accounting a study difficult. Cost of risk management accounting research still in its infancy, this paper on the cost of risk management issues related to accounting for a study.

First, the cost of risk outlined the concept of risk from
Insurance industry, such as actuarial present value of premiums to on the development of the financial industry, especially the banking system of risk management, and gradually extended to other risk industries. The relatively mature category of risk is the commercial banks, the risk will be divided into two categories, namely non-market risk and market risk. It is the most authoritative and most scientific and comprehensive [u] by the U.S. federal government finances Department of Monetary Authority, the Federal Reserve that the risk classification of the two institutions. Monetary Authority, the U.S. Federal Government Ministry of Finance will be divided into nine financial risks, namely credit risk, interest rate risk, currency risk, liquidity risk, price risk, strategic risk, reputation risk, transaction risk, regulatory risk. Financial risk the Fed will be divided into six, namely, credit risk, market risk, liquidity risk, reputation risk, regulatory risk, operational risk.
(1) expected loss costs. Expected cost of losses, including the expected cost of direct losses and indirect losses expected cost. Direct costs include the loss of the damaged assets, the cost of repair or replacement, suffered injuries on the proposed compensation of employees, payment of litigation costs, and defense of other legal proceedings and compensation costs; indirect losses include all losses due to a direct The net result of the reduction. (2) loss of control costs. Cost is the loss of control of the company to reduce loss frequency and extent of the damage, to take certain measures to improve the ability of loss prevention, risk reduction behavior of the costs incurred. (3) loss of financing costs. Financing costs, including loss of self-insurance cost, insurance and the additional premium, and the development, negotiation and implementation of hedging contracts and other contracts, the process of risk transfer contract, the transaction costs. Self-insurance costs include payment of one loss for the cost of capital must be held captive. (4) internal risk curb costs. Contain costs, including internal risk and implementation of decentralized management and management-related costs and costs related to the scattered behavior, but also other types of data and information collection, analysis for the loss of more accurate forecasts of the costs incurred.

Second, the risk cost management accounting cost management accounting system on the original breakthrough
raised the cost of risk management accounting cost of existing management accounting system, a new attempt, to existing cost management accounting has a great influence. A certain extent in the existing cost accounting system is a shock.
First of all, the cost of risk is an extension of the meaning of business costs. Matching cost is mainly the product cost and revenue, companies generally use the narrow definition. Management accounting for cost of the other categories, such as manufacturing costs divided by economic use, and non-manufacturing costs; were divided into periods according to the inventory costs and product costs more. However, both are required under the definition of the actual cost, and can be clearly measured, confirmed that the cost can be quantified. Cost of risk because of the risk caused by the presence of company losses and the risk itself is uncertain, it is objective reality and the formation of people's subjective judgments, so the risk is largely the cost of people's expectations of psychological costs not necessarily actual. This is actually the expression of specific data can be very different costs.
Second, the risk cost management accounting approach to the existing accounting posed new challenges. Cost management accounting on the cost of risk recognition, measurement, recording, reporting that all four proposed new ideas. The original cost management accounting primarily for the management plan to control the business activities to provide information, and related costs from the enterprise of accounting information collection, processing, handling of information systems. Cost information for the confirmation, the current cost management accounting adhere to the idea is: to determine which costs should be into the accounting system, which included accounting courses, and when included. The cost is the fact that the occurrence of a clear, identifiable costs. The cost of risk by objective facts and subjective judgments that the risks of economic activity, may result in loss of business potential costs incurred. Measured from a cost point of view, the present cost of the specific cost measure is the process of monetization, which is made by the physical nature of the nature of the cost of the conversion, that is, the cost can be quantified as accounting data. The risk is not quantified by real things, not the same as the cost of determining, through the volume, size, volume and other physical characteristics to measure, can not by the actual economic transactions in currency transactions to record. Traditional cost data more easily be recorded, because it is the real economic activities took place, and for the cost of risk, we can not deal with the existing process model to solve the problem of its records. From the cost of disclosure, reporting side, management accounting management the ultimate aim is to provide management with useful information. Cost information generated after processing through a series of accounting reports and financial statements disclose the cost of money can be used only to quantify the cost data, risk costs as the expected costs, it will not cost the same as a traditional data directly through explicit disclosure out for the management of.
Again, the cost of management accounting to risk management and corporate accounting department of a new management ideas. That allows the cost accounting department in the enterprise integration of risk awareness in the process and make Management layer in the process of research firm should also consider the cost of risk on the potential impact of business activities. This requires the relevant personnel in their respective areas of competence to consider the possible risk of the cost. Mainly in the following considerations: (1) to avoid risk. Risk is objective, the firm is not only through the decision-makers to take the initiative to eliminate the risk,[link widoczny dla zalogowanych], the risk can only be avoided to reduce the loss of business, risk-bearing capacity of more than enterprise financial activities to avoid. (2) spread the risks. If the risk can not be avoided, can take the means to spread risk, the risk of costs to a relatively low level. Through joint venture companies, mergers and other multi-faceted, diversified way to expand the scale of the operation, the use of the advantages of economies of scale to spread business risk. (3) inhibition and transfer risk. Enterprises can use the advantage of accounting information systems in the information processing of information by monitoring and effective information transfer and obtain prior warning, and take effective measures to curb risk; risk transfer can be understood as to pass on the risk of the enterprise, companies can take insurance, subcontract, transfer, sublet, signing forward contracts and other methods to transfer risk to the business outside.

Third, the cost of risk and difficult problems of management accounting
(a) to confirm the difficulties. The uncertainty of the cost of risk costs that lead to risk the uncertainty of the amount of time, but the key is whether the future economic benefits and risks can be transferred, should be recognized in what time? Is a confirmation or repeatedly confirmed? Sure what amount? Should to what they imputation accounts?
(b) of the measurement difficulties. The key uncertainty is the cost of risk on the quantitative measurement of the major challenge. How to quantify the uncertainty of things, it should quantify the standard of how to grasp, is not subjective professional judgments represent a significant component. Can the measurement of its financial management application cost-approach toward risk, or the creation of a new measurement methods and units that have yet to be our thinking.