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CSU - ACCT 222 - Prologue - Class Notes

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CSU - ACCT 222 - Prologue - Class Notes

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School: Cleveland State University
Department: Accounting
Course: Managerial Accounting
Professor: Mary Rose
Term: Fall 2016
Name: Prologue
Description: Prologue notes
Uploaded: 12/22/2016
3 Pages 11 Views 8 Unlocks
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Unformatted text preview: PROLOGUE Financial accounting is concerned with reporting financial information to external parties, such as stockholders, creditors and regulators Managerial accounting is concerned with providing information to managers for use within the organization Financial accounting serves the need of those outside the organization Managerial accounting serves the needs of managers employed inside the organization Financial accounting 0 Emphasizes financial consequences of past activities V o Emphasizes objectivity and verifiability X [Aulhor‘ T ‘ o Emphasizes company wide reports l o Mandatory for external reports “NJ 0 Must follow GAAP/IFRS Managerial accounting 0 Emphasizes decisions affecting the future 0 Emphasizes relevance Q\Q?nil(\qy o Emphasizes timeliness , . . - Emphasizes segment reports J ‘0“ mo“ 0 NOT mandatory 0 Doesn't need to follow GAAP/IFRS GAAP- Generally accepted accounting principles IFRS- International financial reporting standards PLANNING CONTROLLING DECISION MAKING Establishing goals Monitoring and Selecting the best and specifying how ensuring the proper possible course of to achieve them execution of plans action BUDGETS PERFORMANCE REPORTS WHAT SHOULD WE BE SELLING? WHO SHOULD WE BE SERVING? HOW SHOULD WE EXECUTE? Segment is a part or activity of an organization about which Managers would like cost, revenue, or profit data Planning involves establishing goals and specifying how to achieve them Controlling involves gathering feedback to ensure that the plan is being properly executed or modified as circumstances change Decision Making involves selecting a course of action from competing alternative PLANNING 0 Begin by establishing a goal - Specify how to achieve the goal 0 Plans are often accompanied by a budget Budget- detailed plan for the future that is usually expressed in formal quantitative terms 2 key components of a budget 1. Establish budgeted amount of total salaries that can be offered to all new hires 2. Create budget that quantifies how much you intend to spend on your activities CONTROLLING Performance report- compares budgeted data to actual data in an effort to identify and learn from excellent performance and to identify and eliminate sources of unsatisfactory performance Can also be used as one of many inputs to help evaluate and reward employees DECISION MAKING Many decisions revolve around three questions 1. What should we be selling? 2. Who should we be serving? 3. How should we execute? All companies have to decide among competing improvements opportunities AN ETHICS PERSPECTIVE IMA (Institute of Management Accountants) of the US. has adopted an ethical code called the statement of Ethical Professional Practice A management accountant has ethical responsibilities in 4 broad areas 1. Maintain a high level of professional competence 2. Treat sensitive matters with confidentiality 3. Maintain personal integrity 4. Disclose information in a credible fashion A STRATEGIC MANAGEMENT PERSPECTIVE Strategy- "gameplan" that enables a company to attract customers by distinguishing itself from competitors iocai po‘mi = target customary Customers value propositions— reason target customers choose that company over a competitor 0 Customer intimacy 0 Operational excellence 0 Product leadership AN ENTERPRISE RISK MANAGEMENT PERSPECTIVE Enterprise Risk Management- Process used by a company to identify those risks and develop responses to them that enable it to be reasonably assured of meeting its goals In Managerial Accounting companies use controls to reduce the risk that their plans will not be achieved A CORPORATE SOCIAL RESPONSIBILITY PERSPECTIVE Corporate Social Responsibility (CRS) is a concept whereby organizations consider the needs of all stakeholders when making decisions A PROCESS MANAGEMENT PERSPECTIVE Most companies organize themselves by functional departments Business Process is a series of steps that are followed in order to carry out some task in a business Value chain is often used to describe how an organizations’s functional departments interact with one another to form business processes Lean production is a management approach that organizes resources such as people and machines around the flow of business

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