Professional Documents
Culture Documents
Learning Objectives (1 of 2)
Describe the relationships among financial, management, and cost accounting Identify two common organizational strategies Describe the value chain and the major value chain functions
Learning Objectives (2 of 2)
Explain why accountants must understand the organizations structure in order to perform effectively Identify the sources of ethical standards for cost accountants
Management
Meet internal information needs Does not have to comply with GAAP
Accounting Differences
Financial
External focus Whole organization Historical Quantitative Monetary Verifiable GAAP Formal recordkeeping
Accounting Differences
Financial
External focus Whole organization Historical Quantitative Monetary Verifiable GAAP Formal recordkeeping
Managerial
Internal focus Segments or divisions Current/projected Quantitative/qualitative Monetary and nonmonetary Timely/reasonable estimate Benefits exceed costs Formal and informal recordkeeping
FINANCIAL ACCOUNTING
Internal parties
Planning, controlling, decision making Evaluating performance Includes upstream and downstream costs Disaggregated
Organizational Strategy
1. Develop Mission Statement
What an organization wants to accomplish How its products/services can meet customer needs Why the organization exists Used to develop an organizations strategy Modify over time
Organizational Strategy
1. Develop Mission Statement 2. Implement strategy Strategy - A plan to fulfill goals and objectives by deploying resources to create value for customers and shareholders Organization strategy is supported by business unit strategies
Organizational Strategies
Cost leadership strategy - Undercut competitor prices Product differentiation strategy - Superior quality products or unique services sold at a premium Core competency critical function or activity providing a competitive advantage
Strategy Questions
Who are your five most important competitors? Is your firm more or less profitable than these firms? Compare prices for equivalent products/services. Explain the difference. Is it customers, costs, or profit requirements? What is your competitive advantage?
Organizational Strategy
1. Develop Mission Statement 2. Implement strategy
Value Chain
Set of value-adding functions and processes that convert inputs into products/services
Research and Development Product Design Supply Production Marketing Distribution Customer Service
Organizational Strategy
1. Develop Mission Statement 2. Implement strategy 3. Measure and control the value chain and managers performance