Managerial accounting 6e jams jambalvo chapter 01

Prepared by Debby Bloom-Hill CMA, CFM CHAPTER CHAPTER 11 Managerial Accounting in the Information Age Slide 1-2 Managerial Managerial Accounting Accounting  Managerial accounting is designed for internal users  The goal of Managerial Accounting is to provide the information managers need for  Planning  Control  Decision making Learning objective 1: Explain the primary goal of managerial accounting and Slide 1-3 distinguish between financial and managerial accounting Planning Planning   Planning is a key activity for all companies Communicates a company’s goals to employees   Aids coordination of various functions such as sales and production Specifies the resources needed to achieve company goals Learning objective 1: Explain the primary goal of managerial accounting and Slide 1-4 distinguish between financial and managerial accounting Planning Planning  Budgets for planning  Profit budget   Indicates planned income Cash flow budget  Indicates planned cash inflows and outflows  Production budget  Indicates the planned quantity of production and expected costs Learning objective 1: Explain the primary goal of managerial accounting and Slide 1-5 distinguish between financial and managerial accounting Planning Planning Learning objective 1: Explain the primary goal of managerial accounting and Slide 1-6 distinguish between financial and managerial accounting Control Control  Organizations achieve control by:  Evaluating managers to determine how their performance should be rewarded or punished  Evaluating operations to provide information as to whether they should be changed or not Learning objective 1: Explain the primary goal of managerial accounting and Slide 1-7 distinguish between financial and managerial accounting Planning Planning and and Control Control Process Process Learning objective 1: Explain the primary goal of managerial accounting and Slide 1-8 distinguish between financial and managerial accounting Sample Sample Performance Performance Report Report Learning objective 1: Explain the primary goal of managerial accounting and Slide 1-9 distinguish between financial and managerial accounting Managerial Managerial vs vs Financial Financial Accounting Accounting  Unlike Financial Accounting, Managerial Accounting:      Is directed at internal users May deviate from GAAP Presents more detailed information May present more nonmonetary information Places more emphasis on the future Learning objective 1: Explain the primary goal of managerial accounting and Slide 1-10 distinguish between financial and managerial accounting Information Information Age Age and and Managerial Managerial Accounting Accounting  Advances in information technology have:  Increased competition and also created opportunities and cost savings for firms that use information for strategic advantage  Impacted information flows up and down the value chain (i.e fundamental activities that a firm engages in to create value) Slide 1-25 Learning objective 4: Discuss the impact of information technology on business processes and the interactions companies have with suppliers and customers The The Value Value Chain Chain Slide 1-26 Learning objective 4: Discuss the impact of information technology on business processes and the interactions companies have with suppliers and customers Impact Impact of of Software Software Systems Systems on on the the Value Value Chain Chain  Enterprise Resource Planning (ERP)   Supply Chain Management (SCM)   Organization of activities between a company and its suppliers Customer Relationship Management (CRM)  Slide 1-27 Computerize inventory control and production planning Manages information related to a variety of customer interactions Learning objective 4: Discuss the impact of information technology on business processes and the interactions companies have with suppliers and customers Ethical Ethical and and Unethical Unethical Behavior Behavior  Examples of unethical behavior  Enron managers mislead investors by hiding debt, i.e Kenneth Lay, CEO, found guilty of fraud  WorldCom overstated profits  Bernard Ebbers, CEO, received a 25 year prison sentence   Dennis Kozlowski, head of Tyco, was charged with avoiding taxes Sam Waksal, cofounder of IMClone, was charged with insider trading Learning objective 5: Describe a framework for ethical decision making, and Slide 1-28 discuss the duties of the controller Sarbanes-Oxley Sarbanes-Oxley Act Act   Enacted by Congress in July 2002 Requires CEO and CFO to certify that the financial statements not contain any untrue statements or omissions  Bans certain types of work by the company’s auditors to ensure their independence Learning objective 5: Describe a framework for ethical decision making, and Slide 1-29 discuss the duties of the controller Sarbanes-Oxley Sarbanes-Oxley Act Act  Provides for longer jail sentences and larger fines for executives (i.e fines up to $5 million and jail terms up to 20 years)  Requires companies to report on the existence and reliability of internal controls Learning objective 5: Describe a framework for ethical decision making, and Slide 1-30 discuss the duties of the controller Framework Framework for for Ethical Ethical Decision Decision Making Making  When evaluating a decision, ask: What decision alternatives are available? What individuals or organizations have a stake in the outcome of my decision? Will an individual or an organization be harmed by any of the alternatives? Which alternative will the most good with the least harm? Would someone I respect find any of the alternatives objectionable? Learning objective 5: Describe a framework for ethical decision making, and Slide 1-31 discuss the duties of the controller Framework Framework for for Ethical Ethical Decision Decision Making Making  After deciding on a course of action, but before taking action, ask: At a gut level, am I comfortable with the decision I am about to make? Will I be comfortable telling my friends and family about this decision? Learning objective 5: Describe a framework for ethical decision making, and Slide 1-32 discuss the duties of the controller Institute Institute of of Management Management Accountants Accountants (IMA) (IMA) • Professional organization which focuses on management accounting:     Developed Statement of Ethical Professional Practice Maintains ethics helpline Publishes Strategic Finance and Management Accounting Quarterly Conducts comprehensive examination to test knowledge of management accountants Learning objective 5: Describe a framework for ethical decision making, and Slide 1-33 discuss the duties of the controller Controller Controller as as Top Top Management Management Accountant Accountant • Controller • • • Prepares reports to plan and evaluate company activities Provides information needed to make management decisions Files all financial accounting reports and tax filings with IRS and other tax agencies • Coordinates activities of external auditors Learning objective 5: Describe a framework for ethical decision making, and Slide 1-34 discuss the duties of the controller Duties Duties of of Officers Officers • Treasurer     Manages cash and marketable securities Prepare cash forecasts Obtains financing from banks and other lenders Maintain relationships with investors, banks, and other creditors Learning objective 5: Describe a framework for ethical decision making, and Slide 1-35 discuss the duties of the controller Duties Duties of of Officers Officers • Chief Information Officer (CIO)  • Responsible for information technology and computer systems Chief Financial Officer (CFO) • Responsible for accounting and finance operations Learning objective 5: Describe a framework for ethical decision making, and Slide 1-36 discuss the duties of the controller Organizational Organizational Chart Chart for for the the Controller’s Controller’s Office Office Learning objective 5: Describe a framework for ethical decision making, and Slide 1-37 discuss the duties of the controller Decision Decision Making Making Slide 1-38 Copyright Copyright © 2016 John Wiley & Sons, Inc All rights reserved Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc The purchaser may make back-up copies for his/her own use only and not for distribution or resale The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein Slide 1-39 .. .CHAPTER CHAPTER 11 Managerial Accounting in the Information Age Slide 1-2 Managerial Managerial Accounting Accounting  Managerial accounting is designed for internal users  The goal of Managerial. .. goal of managerial accounting and Slide 1-9 distinguish between financial and managerial accounting Managerial Managerial vs vs Financial Financial Accounting Accounting  Unlike Financial Accounting, ... primary goal of managerial accounting and Slide 1-5 distinguish between financial and managerial accounting Planning Planning Learning objective 1: Explain the primary goal of managerial accounting