Title: The Changing Role of Managerial Accounting in a Dynamic Business Environment
11
Chapter One
- The Changing Role of Managerial Accounting in a
Dynamic Business Environment
2Managing Resources, Activities, and People
Directing
Decision Making
Acquires Resources
Organized set of activities
Planning
Controlling
Hires People
3How Managerial Accounting Adds Value to the
Organization
- Providing information for decision making and
planning. - Assisting managers in directing and controlling
activities. - Motivating managers and other employees towards
organizations goals. - Measuring performance of activities, managers,
and other employees. - Assessing the organizations competitive position.
4The Balanced Scorecard
How do we look to owners?
In which activities must we excel?
How do customers see us?
How can we continue to improve?
5Managerial versus Financial Accounting
Accounting System (accumulates financial
and managerial accounting data)
Managerial Accounting Information for
decision making, and control of an
organizations operations.
Financial Accounting Published financial statement
s and other financial reports.
Internal Users
External Users
6Managerial versus Financial Accounting
7Line and Staff Positions
- A line position is directly involved in achieving
the basic objectives of an organization. - Example A production supervisor in a
manufacturing plant.
- A staff position supports and assists line
positions. - Example A cost accountant in the manufacturing
plant.
8Controller
- The chief managerial and financial accountant
responsibility for - Financial planning and analysis.
- Cost control.
- Financial reporting.
- Accounting information systems.
9Treasurer
- Responsible for raising capital and safeguarding
the organizations assets. - Supervises relationships with financial
institutions. - Work with investors and potentialinvestors.
- Manages investments.
- Establishes credit policies.
10Internal Auditor
- Responsible for reviewing accounting procedures,
records, and reports in both the controllers and
the treasurers area of responsibility. - Expresses an opinion to topmanagement regarding
theeffectiveness of theorganizations
accountingsystem.
11Role of Managerial Accountant
12Major Themes in Managerial Accounting
Behavioral Issues
Information and Incentives
Costs and Benefits
Managerial Accounting
13Evolution and Adaptation in Managerial Accounting
Service Vs. Manufacturing Firms
Computer-Integrated Manufacturing
Information and Communication Technology
Emergence of New Industries
Change
Global Competition
Product Life Cycles
Total Quality Management
Focus on the Customer
Cross-Functional Teams
Time-Based Competition
Just-in-Time Inventory
Continuous Improvement
14Cost Management Systems
- Objectives
- Measure the cost of resources consumed.
- Identify and eliminate non-value-added costs.
CostManagementSystem
15Cost Management Systems
- Determine efficiency and effectiveness of major
activities. - Identify and evaluate new activities that can
improve performance.
- Objectives
- Measure the cost of resources consumed.
- Identify and eliminate non-value-added costs.
16Strategic Cost Management and the Value Chain
Product Design
Production
Research and Development
Marketing
Securing raw materials and other resources
Distribution
Customer Service
Start
17Theory of Constraints
- A sequential process of identifying and
removing constraints in a system.
Restrictions or barriers that impedeprogress
toward an objective
18Managerial Accounting as a Career
- Professional Organizations
Institute of Management Accountants (IMA)
Publishes Management Accounting and
research studies.
Administers Certified Management Accountant progra
m
Develops Standards of Ethical Conduct
for Management Accountants
19Professional Ethics
- Ethical business practices build trust and
promote loyal, productive relationships with
customers, employees and suppliers. - Many companies have written codes of ethics
which serve as guides for employees to follow.
20Professional Ethics
- Competence
- Confidentiality
- Integrity
- Objectivity
- Resolution of Ethical Conflict
21Professional Ethics
Competence
22Professional Ethics
Confidentiality
23Professional Ethics
Integrity
24Professional Ethics
Integrity
25Professional Ethics
Communicate information fairly and objectively.
Objectivity
Disclose all information that might be useful to
management.
26Professional Ethics
- Resolution of Ethical Conflict
- Follow established policies of your organization.
- If unresolved or if policy does not exist
- Clarify relevant concepts in a confidential
discussion with an objective advisor to explore
possible courses of action. - Discuss problem with immediate supervisor.
27Professional Ethics
- Resolution of Ethical Conflict
- If immediate supervisor is involved in the
unethical behavior, discuss at the next level. - If problem is not resolved, the last resort is to
resign. - Generally, do not communicate ethical conflicts
to outsiders.
28End of Chapter 1