1、Introduction to Management Accounting,Chapter 1,Introduction to Management Accounting,Managerial Accounting, the Business Organization, and Professional Ethics,Learning Objectives,Describe the major users and uses of accounting information. Explain why ethics is important to management accountants.
2、Describe the cost-benefit and behavioral issues involved in designing an accounting system.,Learning Objectives,Explain the role of budgets and performance reports in planning and control. Discuss the role accountants play in the companys value chain functions. Contrast the functions of controllers
3、and treasurers.,Learning Objectives,Explain why accounting is important in a variety of career paths. Identify current trends in management accounting. Appreciate the importance of ethical conduct to professional accountants.,Users of Accounting Information,Internal managers,Creditors: Suppliers Ban
4、kers,Day-to-day operating decisions Long-range strategic decisions,Management Accounting,Financial Accounting,External Users,Investors: Stockholders,Government Authorities,Learning Objective 1,Scorekeeping: Evaluate Organizational Performance,Attention Directing: Compare Actual Results to Expected,P
5、roblem Solving: Assess Possible Courses of Action,Decision Making,Process of gathering, organizing, and Communicating financial information,Financial Statements,Accounting Information System,Influences on Accounting Systems,Generally accepted accounting principles (GAAP),Foreign Corrupt Practices Ac
6、t,Internal controls,Management audits,Sarbanes-Oxley Act,Internal auditors,Sarbanes-Oxley Act,In 2002, the Sarbanes-Oxley Act required chief executive officers to sign a statement verifying the accuracy of the companys financial statements.,External auditors must examine and report on the companys i
7、nternal control system.,Learning Objective 2,Ethics,No regulation can be as effective in ensuring reliability as high ethical standards of accountants.,Integrity,Trust,Reliability,Service and Nonprofit Organizations,Service organizations,Nonprofit organizations,Accounting firms Law firms Real estate
8、 firms Banks Hotels,Hospitals Schools Libraries Museums Government agencies,Cost-Benefit and Behavioral Considerations,Cost-benefit balance,Behavioral implications,Weigh estimated costs against probable benefits.,The system must provide accurate, timely budgets and performance reports in a formusefu
9、l to managers.,Managers must use accounting reports, or the reports create no benefits.,Learning Objective 3,Decision Making,Decision making: the purposeful choice from among a set of alternative courses of action designed to achieve some objective.,Planning: Setting objectives and outlining how the
10、 objectives will be obtained.,Control: Implementing plans and using feedback to evaluate the attainment of objectives.,The Nature of Planning and Controlling,Planning Increase Profitability,Control Actions Evaluations,Corrections and revisions of plans and actions,Budgets, Special Reports,Accounting
11、 System,Performance Reports,Customer surveys,Competitor analysis,Advertising impact,New items report,Internal Accounting System,Management Process,Other information systems,Learning Objective 4,Budget and Performance Reports,Budget: quantitative expression of a plan of action,Performance reports: co
12、mpare actual results with budgeted amountsprovide feedback by comparing results with plans highlight variances,Variances: deviations from plans,Performance Reports,Budget Actual Variance Sales $50,000 $50,000 0 Less:Ingredients 22,000 24,500 $2,500 UStore labor 12,000 11,600 400 F Other labor 6,000
13、6,050 50 UUtilities, etc. 4,500 4,500 0 Total expenses $44,500 $46,650 $2,150 U Operating income $ 5,500 $ 3,350 $2,150 UU= Unfavorable actual exceeds budget F Favorable actual is less than budget.,Mayfair Starbucks Store, March 31, 20X7,Product Life Cycle,Product life cycle refers to the various st
14、ages through which a product passes.,No Sales Product Development,Sales GrowthIntroduction to Market,Stable Sales LevelMature Market,Low sales No sales Phase-out Product,The Value Chain,Customer Focus,Research and Development,Product And Service Process Design,Production,Marketing,Distribution,Servi
15、ce,Management Accountants Role as Internal Consultant,Prepares standardized reports,Collects and compiles information,Interprets and Analyzes information,Is Involved In decision making,Internal Consultant,Management,Learning Objective 5,Organizational Authority and Responsibility,Line managers: dire
16、ctly involved with making and selling products or services.,Staff managers: Advisory Support line managers.,Cross-functional teams: Found in modern, “flatter” organizations; Functional areas work together In decision making process.,Accounting Function,Planning for controlReporting and interpretingE
17、valuating and consultingTax administrationGovernment reportingProtection of assetsEconomic appraisal,Treasurer Functions,Provision of capitalInvestor relationsShort-term financingBanking and custodyCredits and collectionsInvestmentsRisk management (insurance),Controller Functions,Chief Financial Off
18、icer (CFO),Learning Objective 6,Career Opportunities in Management Accounting,The Certified Management Accountant (CMA),CMAs must pass a four-part examination: Business Analysis Management accounting and reporting Strategic Management, and 4. Business Applications.,Learning Objective 7,Management Ac
19、counting Change Drivers,Shift from a manufacturing-based to a service-based economy,Increased global competition,Advances in technology,Changes in business processes,Learning Objective 8,Major Influences on Management Accounting,Business process reengineering: Just-in-time (JIT) philosophy Lean manu
20、facturing Computer-integrated manufacturing Six sigma,Advances in technology: E-commerce Enterprise resource planning (ERP),Standards of Ethical Conduct,The Institute of Management Accountants (IMA) Statement of Ethical Professional Practice for Management Accounting Members Requires members to adhe
21、re to a code of conduct regarding:Competence,Confidentiality,Integrity, and Credibility.,Learning Objective 9,Ethical Dilemmas,Managers must choose an alternative and there are: Significant value conflicts among differing interests. Real alternatives that are all justifiable, and Significant consequ
22、ences on stakeholders in the situation.,Unethical Behavior Temptations,Accounting rules Avoid creative interpretations of the rules. Practice full and fair disclosure to convey companys performance.,Emphasis on short-term results: Pressure to meet expected profit numbers.,Ignoring the small stuff: Large misdeeds often result from many small ones.,Economic cycles: A downturn market can reveal what an upturn market conceals. Vigilance in all stages of economic markets maintains high ethical standards.,The End,End of Chapter 1,
