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    Add as Friendmanagement accounting 2

    by: hemant

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    1 : Chapter 1 Introduction to Management Accounting Managerial Accounting, the Business Organization, and Professional Ethics
    2 : Users of Accounting Information Internal managers Creditors: Suppliers Bankers Day-to-day operating decisions Long-range strategic decisions Management Accounting Financial Accounting External Users Investors: Stockholders Government Authorities Learning Objective 1
    3 : Scorekeeping: Evaluate Organizational Performance Attention Directing: Compare Actual Results to Expected Problem Solving: Assess Possible Courses of Action Decision Making
    4 : Process of gathering, organizing, and Communicating financial information Financial Statements Accounting Information System
    5 : Influences on Accounting Systems Generally accepted accounting principles (GAAP) Foreign Corrupt Practices Act Internal controls Management audits Sarbanes-Oxley Act Internal auditors
    6 : Sarbanes-Oxley Act In 2002, the Sarbanes-Oxley Act required chief executive officers to sign a statement verifying the accuracy of the company’s financial statements. External auditors must examine and report on the company’s internal control system. Learning Objective 2
    7 : Ethics No regulation can be as effective in ensuring reliability as high ethical standards of accountants. Integrity Trust Reliability
    8 : Service and Nonprofit Organizations Service organizations Nonprofit organizations Accounting firms Law firms Real estate firms Banks Hotels Hospitals Schools Libraries Museums Government agencies
    9 : 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 form useful to managers. Managers must use accounting reports, or the reports create no benefits. Learning Objective 3
    10 : 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 objectives will be obtained. Control: Implementing plans and using feedback to evaluate the attainment of objectives.
    11 : The Nature of Planning and Controlling Planning Increase Profitability Control – Actions – Evaluations Corrections and revisions of plans and actions Budgets, Special Reports Accounting System Performance Reports Customer surveys Competitor analysis Advertising impact New items report Internal Accounting System Management Process Other information systems Learning Objective 4
    12 : Budget and Performance Reports Budget: quantitative expression of a plan of action Performance reports: compare actual results with budgeted amounts provide feedback by comparing results with plans highlight variances Variances: deviations from plans
    13 : Performance Reports Budget Actual Variance Sales $50,000 $50,000 0 Less: Ingredients 22,000 24,500 $2,500 U Store labor 12,000 11,600 400 F Other labor 6,000 6,050 50 U Utilities, etc. 4,500 4,500 0 Total expenses $44,500 $46,650 $2,150 U Operating income $ 5,500 $ 3,350 $2,150 U U= Unfavorable – actual exceeds budget F – Favorable – actual is less than budget. Mayfair Starbucks Store, March 31, 20X7
    14 : Product Life Cycle Product life cycle refers to the various stages through which a product passes. No Sales Product Development Sales Growth Introduction to Market Stable Sales Level Mature Market Low sales ? No sales Phase-out Product
    15 : The Value Chain Customer Focus Research and Development Product And Service Process Design Production Marketing Distribution Service
    16 : Management Accountant’s 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
    17 : Organizational Authority and Responsibility Line managers: directly 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.
    18 : Accounting Function Planning for control Reporting and interpreting Evaluating and consulting Tax administration Government reporting Protection of assets Economic appraisal Treasurer Functions Provision of capital Investor relations Short-term financing Banking and custody Credits and collections Investments Risk management (insurance) Controller Functions Chief Financial Officer (CFO) Learning Objective 6
    19 : 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
    20 : Management Accounting 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
    21 : Major Influences on Management Accounting Business process reengineering: Just-in-time (JIT) philosophy Lean manufacturing Computer-integrated manufacturing Six sigma Advances in technology: E-commerce Enterprise resource planning (ERP)
    22 : Standards of Ethical Conduct The Institute of Management Accountants (IMA) Statement of Ethical Professional Practice for Management Accounting Members Requires members to adhere to a code of conduct regarding: Competence, Confidentiality, Integrity, and Credibility. Learning Objective 9
    23 : Ethical Dilemmas Managers must choose an alternative and there are: Significant value conflicts among differing interests. Real alternatives that are all justifiable, and Significant consequences on stakeholders in the situation.
    24 : Unethical Behavior Temptations Accounting rules Avoid creative interpretations of the rules. Practice full and fair disclosure to convey company’s 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.
    25 : The End End of Chapter 1

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