Title: Introduction to Cost and Management Accounting in a Global Business Environment
1Cost Accounting Traditions and Innovations Barfiel
d, Raiborn, Kinney
- Chapter 1
- Introduction to Cost and Management Accounting in
a Global Business Environment
2Learning Objectives (1 of 3)
- Explain the relationship between financial and
management accounting - Describe the relationships among cost, financial,
and management accounting - Describe the role of ethics in guiding workforce
behavior - Identify the factors that influence the
globalization of business
3Learning Objectives (2 of 3)
- List the primary factors and constraints that
influence an organizations strategy - Explain the impact of the competitive environment
on an organizations strategy - Clarify the impact of the accounting function on
achievement of strategic goals and objectives
4Learning Objectives (3 of 3)
- Explain the effect of the product life cycle on
the company segments mission - Describe the importance of the value chain
5Accounting
The Language of Business
6Accounting
- Provides information to external parties
- Stockholders, creditors, regulators
- Estimates the cost of products produced and
services provided - Provides information to internal decision makers
- To plan, control, and evaluate performance
7Two Types of Accounting
- Financial
- Meet external information needs
- Comply with GAAP
- Management
- Meet internal information needs
- Provide product costing information
8Financial Accounting Should
Provide information to stockholders, creditors,
and various regulatory bodies
Comply with GAAP
9Management Accounting Should
Provide product costing information for external
financial statements
Provide information useful for making
decisions and controlling operations
10Accounting Differences
- Financial
- External
- Aggregated
- Historical
- Quantitative
- Monetary
- Verifiable
- GAAP
- Managerial
- Internal
- Segmented
- Current/Forecasted
- Quantitative/Qualitative
- Monetary/Nonmonetary
- Timely/Reasonable estimate
- Benefits exceed costs
11Relationship of Financial, Management, and Cost
Accounting
FINANCIAL ACCOUNTING
MANAGEMENT ACCOUNTING
COST ACCOUNTING
12Accounting Standards
- Financial
- Financial Accounting Standards Board (FASB)
- Private-sector body
- Management
- Cost Accounting Standards Board (CASB)
- Public-sector board
13Accounting Organizations
- Institute of Management Accountants (IMA)
- Statements on Management Accounting (not legally
binding) - Certified Management Accountant (CMA)
- Certified in Financial Management (CFM)
- Society of Management Accountants of Canada
- Management Accounting Guidelines (not legally
binding)
14Ethics Management Accountants
- Standards of Ethical Conduct for Management
Accountants - Competence
- Confidentiality
- Integrity
- Objectivity
Competence Confidentiality Integrity Objectivity
15Global Business Environment
International trade of goods and
services International movement of
labor International flows of capital and
information
16Global Business Challenges
- Understand the factors influencing international
business markets - Devise a long-term plan to achieve organizational
goals - Develop information systems that keep the
companys operations consistent with its plans
and goals
17Global Business Environment
- Electronic Commerce
- Trade Agreements
- North American Free Trade Agreement (NAFTA)
- General Agreement on Tariffs and Trade (GATT)
18North American Free Trade Agreement (NAFTA)
Members agreed to allow duty-free transfer of
goods under certain conditions
19General Agreement on Tariffs and Trade (GATT)
To provide a level playing field for trade
among the 100 signatory nations
20Global Business Environment
- Risks
- Strategic
- Environment and Organization
- Operating
- Financial
- Information
21Global Business Environment
- Ethical Considerations
- Is it legal?
- Does it comply with our values?
- How will it look in the newspaper?
- If you do it, will you feel bad?
- If its wrong, dont do it.
- If youre not sure, ask.
22Mission Statement
Goals and Objectives
Strategic Planning
Tactical Planning
Organizational Strategy
23Organizational Strategy
- Organizational Structure
- Core Competencies
- Organizational Constraints
- Organizational Culture
- Environmental Constraints
24Organizational Strategy
Centralization
Decentralization
25Organizational Strategy
- Organizational Structure
- Core Competencies
- A higher proficiency than the competitors
- Technological innovation
- Engineering
- Product development
- After-sale service
26Organizational Strategy
- Organizational Structure
- Core Competencies
- Organizational Constraints
- Monetary Capital
- Intellectual Capital
- Human Capital
- Structural Capital
- Relationship Capital
27Organizational Strategy
- Organizational Structure
- Core Competencies
- Organizational Constraints
- Organizational Culture
- An organizations norms
- internal and external
- formal and informal
28Organizational Strategy
- Organizational Structure
- Core Competencies
- Organizational Constraints
- Organizational Culture
- Environmental Constraints
- Limitations on strategy caused by external
differences in culture, competitive market
structures, fiscal policy, laws, or political
situations
29Business Intelligence System
Formal process for gathering and analyzing
information and producing intelligence to meet
decision-making needs
- Information about internal processes
- Knowledge of markets, technologies, and
competitors
30Business Intelligence
Competitive Intelligence
Competitor Analysis
Levels of Intelligence Gathering
31Business Segments
- Segment Mission relates to Product Life Cycle
- Build
- Hold
- Harvest
32Accounting Information
- Strategic Resource Management
- Planning for deployment of resources to create
value for customers and shareholders - Value ChainFoundation of SRM
- Set of processes that convert inputs into
products and services - Use accounting information to evaluate the value
chain to improve strategic resource management
33The Accountants Role
- Accountants provide information that is used to
- make strategic decisions
- measure and evaluate management
- provide appropriate incentives
- provide information about the value chain
34Questions
- What is the relationship among cost, financial,
and management accounting? - How do ethics guide workforce behavior?
- What is the impact of the accounting function on
achievement of strategic goals and objectives?