Professional Documents
Culture Documents
Chapter 1
Fundamental Concepts
Learning Objectives (Slide 1 of 2)
Distinguish between managerial and financial accounting.
Understand how managers can use accounting information to implement strategies.
Identify the key financial players in the organization.
Understand managerial accountants professional environment and ethical responsibilities.
Master the concept of cost.
Financial Accounting
Deals with reporting to parties outside the organization
Highly regulated
Primarily uses historical data
Managerial Accounting
Deals with activities inside an organization
Unregulated
May use projections about the future
Implementing Strategies
Managerial accounting system should help managers implement organizations strategy
System must be adapted to each organizations objectives, strategy and environment
Information required for decision making, planning, and other managerial activities often is not provided by the financial
accounting system
P a r t ia l O r g a n iz a t io n C h a rt
P r e s id e n t a n d
C h i e f O p e r a t i n g O ffi c e r
In d u s tr ia l S t a ff a n d
D e p a rtm e n ts A d m in is t r a tiv e D e p a r tm e n t s
F in a n c e O th e r
V ic e - P r e s id e n t V ic e - P r e s id e n ts
In c lu d in g E n g in e e r in g ,
L e g a l, E m p lo y e e R e la t io n s
T re a s u re r C o n t r o lle r In te r n a l A u d it
C ost F in a n c ia l Tax
A c c o u n tin g R e p o r tin g
Professional Environment
(Slide 1 of 2)
Professional Environment
(Slide 2 of 2)
Ethical issues, while always important, have taken on added significance due to recent accounting failures
The IMA has developed a Code of Conduct mandating that management accountants have a responsibility to maintain the
highest levels of ethical conduct
Value-Added Activities
Value-added activities increase the products service to customers
Managers try to eliminate non-value-added activities to reduce costs without reducing the products service
potential to customers
The value chain describes the linked set of activities that add value to the products or services of the organization
Dranrey Gaon
BSBA-FM3A
ACC311