Accounting project
xenyop
bma3e_ch01_stud.pptxIntroduction to Managerial Accounting
Chapter 1
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Objective 1
Identify managers’ three primary responsibilities
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Managers’ Responsibilities
Setting goals and
objectives
Overseeing day-to-day operations
Evaluating results of operations
Directing
Controlling
Decision
Making
Planning
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Planning
Setting goals and objectives and how to achieve them
Examples of planning
Generate more sales via opening new stores
Reduce labor costs by reducing store hours
Budgets
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Directing
Overseeing company’s day-to-day operations
Examples
Using daily/weekly sales reports to adjust marketing strategies
Using product cost reports to adjust raw material usage
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Controlling
Evaluating results of operations against plans and making adjustments as needed
Examples
Comparing budgeted sales with actual sales to take corrective actions
Comparing budgeted product costs against actual product costs to take corrective actions
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Objective 2
Distinguish financial accounting from managerial accounting
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Managerial vs. Financial Accounting
| Issue | Managerial | Financial |
| Primary users | Internal | External |
| Purpose of information | Plan, direct, control, decide | Users make investing and lending decisions |
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Managerial vs. Financial Accounting
| Issue | Managerial | Financial |
| Primary accounting product | Internal reports useful to management | General purpose financial statements |
| What is included? | Defined by management | Determined by GAAP |
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Managerial vs. Financial Accounting
| Issue | Managerial | Financial |
| Underlying basis of information | Internal and external transactions, focus on future | Based on historical transactions with external parties |
| Emphasis | Data must be relevant | Data must be reliable and objective |
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Managerial vs. Financial Accounting
| Issue | Managerial | Financial |
| Business unit | Segments of the business | Company as a whole |
| Preparation | Depends on management needs | Annually and quarterly |
| Verification | Internal audit | External audit |
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Managerial vs. Financial Accounting
| Issue | Managerial | Financial |
| Information requirements | No requirement | SEC requires publicly traded companies to issue audited financial statements |
| Impact on employee behavior | Careful consideration | Adequacy of disclosure |
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Objective 3
Describe organizational structure and the roles and skills required of management accountants within the organization
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Organizational Structure
Board of
Directors
Chief Executive
Officer
Chief Operating
Officer
Chief Financial
Officer
Vice Presidents
of Various
Operations
Treasurer
Controller
Internal Audit
Audit
Committee
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Changing Roles of Management Accountants
Impact of technology
Ensuring accurate financial records
Planning, analyzing, and interpreting accounting data
Providing decision support
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Required Skills of Managerial Accountants
Knowledge of financial and managerial accounting
Analytical skills (critical thinking)
Knowledge of how a business functions
Ability to work on a team
Oral and written communications skills
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Objective 4
Describe the role of the Institute of Management Accountants (IMA) and use its ethical standards to make reasonable ethical judgments
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Institute of Management Accountants (IMA)
Professional association for management accountants
IMA’s functions
Certification (CMA)
Practice development
Education
Networking
Ethical standards
Public education
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Summary of IMA Ethical Standards
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| Competence | Confidentiality |
| Integrity | Credibility |
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Ethical Behavior
Means doing the right thing, regardless of consequences
Examples of unethical behavior
Allowing reimbursement of false expense reports
Manipulating income
Performing tasks not qualified to perform
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Steps to Resolve Ethical Dilemmas
Follow company’s policies for reporting unethical behavior
If not resolved
Discuss with immediate supervisor
Discuss with objective advisor
Consult an attorney
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Unethical Versus Illegal Behavior
Not all unethical behavior is illegal, but all illegal behavior is unethical.
Unethical behavior includes
Dishonesty
Unfairness
Lack of objectivity
Irresponsible
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Objective 5
Discuss and analyze the implications of regulatory and business trends
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Regulatory and Business Issues
Sarbanes-Oxley Act of 2002 (SOX)
International Financial Reporting Standards (IFRS)
Extensible Business Reporting Language (XBRL)
Sustainability
Shifting economy
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Sarbanes-Oxley Act of 2002 (SOX)
Restore trust in publicly traded corporations, management, financial statements, and auditors
CEO /CFO requirements
Financial statements
Internal control structure
Annual assessment
Independent audit committee
Increases white-collar crime penalties
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International Financial Reporting Standards (IFRS)
Results of globalization
Consistent reporting standards needed worldwide
SEC is studying IFRS
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Current IFRS information:
www.IFRS.com or www.IASB.org
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Extensible Business Reporting Language (XBRL)
Standardized tagging system for financial reports
Advantages
Decreases retrieval time
Decreases conversion time
Facilitates comparisons
Customizes information
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Sustainability and Managerial Accounting
Sustainability
Social responsibility
Triple bottom line
Profit
People
Planet
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Shifting Economy
Shift away from manufacturing toward service
Managerial accounting has expanded
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Competing in Global Marketplace
Barriers to international trade have fallen
More accurate and timely information needed
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Advanced Information Systems
Enterprise resource planning (ERP)
Lean production
Just-in-time (JIT)
Total quality management (TQM)
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Enterprise Resource Planning (ERP)
System that integrates a company’s functions, departments, and data
Advantages
Streamline operations
Respond quickly to changes
Replace separate software systems
Disadvantage: expensive
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Lean Operations
A philosophy and business strategy of manufacturing without waste
Lowers costs
Increases competitive position
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Just in Time Inventory (JIT)
Manufacture “just in time” to fill orders
Reduces
Raw materials inventory
Finished goods inventory
Storage costs
Handling costs
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TQM – Total Quality Management
Goal to provide customers with superior products and services
Continually set higher goals for quality
International Organization for Standardization (ISO) – ISO 9001:2008
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End of Chapter 1
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