MANAGERIAL ACCOUNTING

staff

The accounting function is usually________

Income statement

- (or statement of financial performance) which represents the results of operations - revenues, expenses, net profit or loss, for the accounting period.

Global Competition

- An important development that drives the extensive changes in the contemporary business environment is the growth of international markets and trade.

Accounting

- Design, establish, and maintain general and cost accounting systems at all company levels.

Control

- Develop and revise standards against which to measure performance.

Planning

- Establish and maintain an integrated plan of operation consistent with the company's goals and objectives.

Guidelines on Ethics for Professional Accountants

- In July 1990, the International Federation of Accountants (IFAC) in which the Philippines through the PICPA is a member, issued the ________

Time-based Competition

- In a global competitive environment, time has become a very significant element in many companies' strategies for success

Information and Communication Technology Management

- In the face of the increased global competition, firms around the world are adopting new manufacturing and information technologies to remain competitive.

Other Primary Responsibilities

- Manage and supervise such functions as taxes.

Verification

- Management accountants assure the accuracy and reliability of information derived from the accounting system or related sources that is used throughout the organization.

Controlling

- Management accountants interpret all forms of internal and external information pertinent to the various segments of the organization and communicate the implications of the information being reviewed, including its relevance and reliability.

Computer-aided Design and Manufacturing

- More companies are using _______to respond to changing consumer tastes more quickly.

Product Life Cycles and Diversity

- One impact of highly automated manufacturing systems has been to enable manufacturers to produce an ever-more diverse set of products.

Reporting

- Prepare, analyze and interpret financial results for utilization by management in the decision-making process.

Cost Management System

- Some entities would use cost management to describe the activities of managers in short-run and long-run planning and control of costs.

Balanced Scorecard

- The balanced scorecard is an accounting report that includes the firm's critical success factors.

Operation Processes

- The operation processes that are inherent throughout the range of activities.

Performance Reports

- The reports used evaluate the performance of managers and the operations they control.

Selling, General, and Administrative (SG & A)

- These upstream and downstream cost, which are usually titled ______

CONTINUOUS IMPROVEMENT AND COMPETITIVE STRATEGY

- To stay competitive, companies must concentrate on continuously improving the different aspects of their own operations.

Process Reengineering

- a more radical approach to improvement than TQM, is an approach where a business process is diagrammed in detail.

chief financial officer (CFO)

- also called the finance director in many countries - is the executive responsible for overseeing the financial operations of an organizations.

External Linkages

- are activity relationship between the firm and firm's suppliers and customers.

Management accountants

- are concerned with providing financial information to managers, that is, people inside an organization who direct and control the operations.

Internal Linkages

- are relationships among activities that are performed within a firm's portion of the industrial value chain (the internal value chain).

E-commerce

- attracted many investors to pursue the use of internet in conducting business.

Financial statements

- contain a wealth of useful information regarding the financial position of a company.

Analysis

- determination of the reasons for the reported activity and its relationship with other economic events and circumstances.

Accumulation

- disciplined and consistent approaches to recording and classifying appropriate business transactions and other economic events.

Treasury

- includes banking short- and long-term financing, investments, and management of cash.

Taxation

- includes income taxes, sales taxes, and international tax planning.

Risk management

- includes managing the financial risk of interest-rate and exchange-rate changes and derivatives management.

Controllership

- includes providing financial information for reports to managers and reports to shareholders and overseeing the overall operations of the accounting system.

Internal Audit

- includes reviewing and analyzing financial and other records to attest to the integrity of the organization's financial reports and to adherence to its policies and procedures.

Automation

- involves and requires relatively large investment in computers, computer programming, machines and equipment.

Competitive strategy

- involves determination and implementation of a set of policies, procedures and approaches to business that produces long-term success.

Planning

- involves setting of goals for the firm, evaluating the various ways to meet the goals and picking out what appears to be the best way to meet the goals. - involves identifying alternatives and selecting a course of action and specifying how the action will be implemented to further the organization's objectives.

Management Accounting

- involves the application of appropriate techniques and concepts to economic data -It is the process of identification, measurement, accumulation, analysis, preparation, interpretation, and communication of financial information

Target costing

- involves the determination of the desired cost for a product or the basis of a given competitive price so that the product will earn a desired profit.

Financial Accounting

- involves the systematic recording of business transactions, governed by a body of International Financial Reporting Standards (IFRS) leading to the preparation of financial statements for the use of various interested parties, internal as well as external.

Flexible manufacturing systems (FMS)

- is a computerized network of automated equipment that produces one or more groups of parts or variations of a product in a flexible manner.

Mass Customization

- is a management technique in which marketing and production processes are designed to handle the increased variety that results from delivering customized products and services to customers.

Life Cycle Costing

- is a management technique to identify and monitor the cost of a product throughout its lifecycle.

Computer-integrated manufacturing (CIM)

- is a manufacturing system that totally integrates all office and factory functions within a company

Reengineering

- is a process of creating competitive advantage in which a firm reorganizes its operating and management functions.

Theory of Constraints

- is a sequential process of identifying and removing constraints in a system.

Total Quality Management

- is a technique in which management develops policies and practices to ensure that the firm's products and services exceed customers' expectation.

The Value Chain

- is an analysis tool that firms use to identify the specific steps required to provide a product or service to the customer.

Business Process

- is any series of steps that are followed in order to carry out some task in a business.

Management accounting

- is concerned primarily with providing information to internal managers.

Management Accounting

- is concerned with providing financial information to persons within the organization to enable them to informed judgements and effective decisions which further the organization's goals.

Computer-Integrated Manufacturing

- is fully automated, with computers controlling the entire production process.

Staff Authority

- is the authority to advice but not command others; it is exercised laterally or upward. Staff managers give support, advice and service to line departments. - Example of staff authority are found in personnel, purchasing, engineering and finance.

Line Authority

- is the authority to command action or give orders to subordinates. Line managers are directly responsible for attaining the objectives of the business firm as efficiently as possible. - Sales and production managers typically have line authority.

Continuous improvement

- is the constant effort to eliminate waste, reduce response time, simplify the design of both products and processes, and improve quality and customer service.

The Controller (also called the chief accounting officer)

- is the financial executive primarily responsible for management accounting and financial accounting.

Industrial value chain

- is the linked set of value-creating activities from basic raw materials to the disposal of the final product by end-use customers.

Just-In-Time (JIT)

- is the philosophy that activities are undertaken only as needed or demanded.

Controllership

- is the practice of the established science of control which is the process by which management assures itself that the resources are procured and utilized according to plans in order to achieve the company's objectives

Internal value chain

- is the set of activities required to design, develop, produce, market and deliver products or services to customers.

Computer-aided Design (CAD)

- is the use of computers in product development, analysis, and design modification to improve the quality and performance of the product.

Computer-aided Manufacturing (CAM)

- is the use of computers to plan, implement, and control production.

Activity analysis

- is used to develop a detailed description of the specific activities performed in the operation of the firm.

Activity-Based Costing (ABC)

- is used to improve the accuracy of cost analysis by improving the tracing of costs to products or to individual customers.

Preparation and interpretation

- meaningful coordination of accounting and/or planning data to provide information, presented logically, and including, if appropriate, the conclusions drawn from those data.

Technological Implementation

- modern equipment and techniques should be employed to facilitate the selection, accumulation, transmission, analysis, and safeguarding of information.

Problem solving

- quantification of the relative merits of possible courses of action as well as recommendations as to the best procedure.

Measurement

- quantification, including estimates, of business transactions or other economic events that have occurred or forecasts of those that may occur.

Identification

- recognition and evaluation of business transactions and other economic events for appropriate accounting action.

Value chain

- refers to the sequence of business functions in which usefulness is added to the products or services of the company.

Communication

- reporting pertinent information to management and to others for internal and external users.

Benchmarking

- s a process by which a firm determines its critical success factors.

Interpreting and reporting of information

- that helps manager to focus on operating problems, opportunities as well as inefficiencies.

Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management

- the Institute of Management Accountants (IMA) of the United States has developed a very useful ethical code called______

Information Systems Development

- the information system must meet the needs of all people who require information to perform their jobs.

Institute of Management Accountants (IMA)

- the principal organization of management accountants in the United States. - is a professional organization that publishes the monthly magazine Strategic Finance.

Administration

- this includes development and maintenance of an effective and efficient management accounting organization.

Resource Management

- this involves implementing a system of reporting that is aligned with organizational responsibilities.

Planning

- this involves quantifying and interpreting the effects on the organization of planned transactions and other economic events.

Cross-Functional Teams

- to focus their varied expertise and experience on virtually all management issues

Activity-Based Management (ABM)

- uses activity analysis to improve operational control and management control.

Philippine Association of Management Accountants (PAMA)

- was established in 1972 as the National Association of Accountants (NAA) - to provide its members with educational and professional activities that supplement in the knowledge of management accounting practices and methods.

Downstream costs

- which consist of marketing, distribution, and customer service.

Upstream costs

- which consist of research and development and product design.

Scorekeeping or data accumulation

- which enables both internal and external parties to evaluate organizational performance and position.

Decision making

- which involves determination of predictive information (e.g. relevant costs) for making important business decisions. -. is an integral part of the planning and control process - decisions are made to reward or punish managers, and decisions are made to change operations or revise plans.

Controlling

- which involves the evaluation of whether actual performance conforms with planned goals. - is achieved by evaluating the performance of managers and the operations for which they are responsible.

functional authority

- which is the right to command action laterally or downward with regard to a specific function or specialty.

Cash flow statement

- which provides information about the cash inflows and outflows from operating, investing, and financing activities during an accounting period.

Statement of Financial Position

- which shows the financial position - asset, liabilities, and owner's equity of the firm on a particular date such as the end of a quarter or a year.

Statement of Changes in Equity

- which summarizes the changes in a company's equity for a period of time (generally one year);

Reporting

-reporting relates to both internal and external needs for information about past or future events and circumstances.

The responsibilities of the CFO:

1. Controllership 2. Treasury 3. Risk management 4. Taxation 5. Internal Audit

Contemporary management techniques:

1. Just-In-Time (JIT) 2.Total Quality Management 3. Process Reengineering 4. Benchmarking 5. Mass Customization 6. Balanced Scorecard 7. Activity-based Costing and Management 8. Theory of Constraints 9. Life Cycle Costing 10. Target Costing 11. Computer-aided Design and Manufacturing 12. Automation 13. E-commerce 14. The Value Chain

Basic Functions of Controllership

1. Planning 2. Control 3. Reporting 4. Accounting 5. Other Primary Responsibilities.

Management accountant provides a system

1. Planning 2. Controlling 3. Decision Making

Objectives by organizing and implementing activities in the following categories:

1. Planning 2. Reporting 3. Controlling 4. Resource Management 5. Information Systems Development 6. Technological Implementation 7. Verification 8. Administration

Management accountants do the following tasks:

1. Scorekeeping or data accumulation 2. interpreting and reporting of information 3. Problem solving

Customer Value

is the key focus that businesses of all types must be concerned with.