New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

BUS 215; Banfield, Week 1 Chapter 1 Notes

by: Charissa Loo

BUS 215; Banfield, Week 1 Chapter 1 Notes BUS 215

Charissa Loo
Cal Poly

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

These are the notes I took from the online connect book. I additionally added comments that Banfield has said himself. I screenshot all the exhibits and also bold all of the Vocab words. I use ...
Managerial Accounting
Class Notes
business, cal poly, Banfield, Accounting, managerial accounting, notes, outline, vocab, Chapter 1 BUS 215, BUS 215, Business 215
25 ?




Popular in Managerial Accounting

Popular in Business

This 9 page Class Notes was uploaded by Charissa Loo on Friday April 15, 2016. The Class Notes belongs to BUS 215 at California Polytechnic State University San Luis Obispo taught by BanField in Spring 2016. Since its upload, it has received 18 views. For similar materials see Managerial Accounting in Business at California Polytechnic State University San Luis Obispo.


Reviews for BUS 215; Banfield, Week 1 Chapter 1 Notes


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 04/15/16
BUS 215 ­ CH 1 Managerial Accounting: an overview    Chapter explains why managerial accounting is important:  ­ What is it?  ­ Why does it matter to your career  ­ Ethics, strategic management and leadership  I. What is Managerial accounting?  A. Financial accounting ​is concerned with reporting financial info to external info to external parties, such as  stockholders, creditors, and regulatorManagerial accounting ​ is concerned with providing info to managers for use  within the organization.  B. Exhibit 1­1 summaries 7 key diff bw the two  ■ A segment ​is a part or activity of an  organization about which managers  would like cost, revenue, or profit data.  Ex: product lines, customer groups (by  age, ethnicity, gender, volume  purchases), geographic territories  ■ Managerial, inside organization for:  ● 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  competing alternatives.  ● Decision making ​selecting a  course of action from  competing alternatives  C. Planning  ■ Begin by establishing a goal such as:  our goal is to recruit the “best and  brightest” college grads. Next stage of  planning process would req specifying  how to achieve this goal by answering  numerous ?s such as:  ● How many stud do we need to hire total from each maj?  ● What schools do we plan to incl in our recruiting?  ● Which employees will be involved in each recruiting?  ● When conduct interviews?  ● How will we compare students for extended job offers?  ● What salary to offer? Salaries differ from major?  ● How much money can we spend on recruiting?  ■ Plans are followed by a budget  ● A budget is a detailed plan for the future that is usually expressed in formal quantitative terms  ● Two key components:  (1) Have to work w other senior managers inside the comp to establish a budgeted amount of  total salaries that can be offered for new hires  (2) Create a budget that quantifies how much you intend to spend on your campus recruiting  acts.  D. Controlling  ■ Involves gathering, evaluating, and responding to the feedback to ensure that this year’s recruiting process  meets expectations.   ■ Evaluating the feedback in search of ways to run a more effective recruiting campaign next yr. Control  process would involve answering ?s such as:  ● Did we succeed in hiring planned # within each major at each school?  ● Did we lose too many exceptional candidates to competitors?  ● Etc.  ■ Part of control process includes preparperformance reports.A performance report ​compares budgeted  data to actual data in an effort to identify fn learn from excellent performance and to identify and eliminate  sources of unsatisfactory performance. They can be used as one of many inputs to help evaluate/reward  employees.  ■ All managers perform planning and controlling act  E. Decision Making  ■ Most basic managerial skill is ability to make intelligent, data driven decisions.   ■ Most revolved around 3 ?s:  ● What should we be selling?  ● Who​ should we be serving?  ● How should we execute?  ■ 1­2 provides exs of decisions pertaining to each category   II. Why Does Managerial Accounting matter to your career?  A. Need to know how to plan for the future and make progress toward achieving goals and intelligent decisions. In other  words managerial accounting skills are useful in any career, organization and industry  B. Business Majors  ■ Exhibit 1­3 provides examples of how planning, controlling and decision making affect 3 majors other than, supply chain management, and human resource management  ■   C. Accounting Majors  ■ Inst of mang accountants (IMA) estimates that more than 80% of professional accountants in the US work in  non public accounting environments.  ■ Public accounting most important function is to protect investors and other external parties by assuring them  that companies are reporting historical results that comply with applicable accounting rules.  ■ Primary role of managerial accountants is to partner w their cowerks w/in the organization to improve  performance.  ■ Have strong financial accounting skills, more importantly help improve organizational performance by  applying planning, controlling, and decision making skills that are the foundation of manag accting.  D. Professional Certification ­ a smart investment   III. Managerial Accounting: beyond the numbers  A. Exhibit 1­5 summarizes how each ch of the book teaches measurement skills that managers use on   B. An ethics perspective  ■ Ethical behavior keeps economy running. Would be much less efficient so ­ less would be available to  consumers, quality would be lower, prices would be higher. Businesses too  ■ Code of Conduct for Management accountants  ● The ​institute of management accountants​  (IMA) of Us has adopted an ethical code called the  statement of ethical professional practicethat describes in some detail the ethical respo of  management accountants  ● Standard consists of two parts (exhibit 1­6)   (1) First part provides general guidelines for. Four broad areas­ maintain a high level of  professional competence, to treat sensitive matters w confidentiality, maintain personal  integrity, disclose info in a credible fashion.  (2) Second part specifies what should be done if an indiv finds evidence of ethical misconduct  (3) Ex         ■ Consequences of not abiding:  ● Managers not being trusted to distribute therefore decisions would be based on incomplete info and  operations would deteriorate.  ● Employees could accept bribes from suppliers  ● Presidents of companies could lie in their annual reports and Fin statements, decisions would be  off. Suspecting the worst, rational investors would pay less for securities issued by companies and  may not be willing to invest. Companies would then have less money ­ slower econ growth, fewer  goods and serv, and higher prices.   ■ Ethical behavior is also foundation for managerial accounting. (planning, controlling and decision making)  C. A Strategic Management Perspective  ■ Companies develop a strategy that defines how they intend to succeed in the marketplace.   ■ A strategyis a “game plan” that enables a comp to attract customers by distinguishing itself from  competitors. Should target customercustomer value propositions   ■ Customer value proportions tend to fall in three categories  ● Customer intimacy:we can customize our products and services to meet your indiv needs better  than our comp, cost serv (nordys)  ● Operational excellencechoose us bc we deliver products and services faster, more convenient,  and at lower prices (walmart)  ● Product leadershiphigher quality (apple)  D. An Enterprise Risk Management Perspective  ■ Enterprise risk management ​is a process used by a comp to identify those risks and develop responses to  them that enable to be reasonably assured of meeting its goals.  ■ Exhibit 1­7 risks may face   ● The right hand column of Ex 1­7 provides an example of control that could be implemented to  reduce each of the risk mentioned in the left hand column. Although cannot completely eliminate  risk, they enable to manage them.  ● Companies use controls to reduce the risk that their plans will not be achieved.  (1) Risk management part of decision making  ■ A Corporate Social Respon Perspective  ● Companies have a ​corporate social responsibilto rserve other stakeholder (customers,  employees, suppliers, communities and environmental and human rights advocates.  ● A corp social respon (CSR) is a concept whereby organizations consider the needs of all  stakeholders when making decisions. Extends beyond legal compliance to include voluntary  actions that satisfy stakeholder exp.   ● Exhibit 1­8 present examples of corp social respon that are of interest to six stakeholder groups.    ■ A Process Management Perspective  ● Most companies organize themselves by functional departments, such as marketing, Research & D  Department, and accounting dep.  ● “Chain of command” superior and subordinate relationships  ● Managers understand that business processes​ serve needs of company’s most important  stakeholders ­ its customers  ● A business process ​is a series of steps that are followed in order to carry out some task in a  business. Steps often span departmental boundaries, thereby req managers to cooperate across  functional departments  ● The term value chaindescribes how an org functional departments interact w one another to form  bus processes. A value chain, (1­9) consists of the major bus functions that add value to a  company’s products and services.  ●   ● Managers freq use process management method called ​ lean thinkin or what is calllean  productionin the manufacturing sector.   (1) Lean production ​is a management approach that organizes resources such as people  and machines around the flow of bus processes and that only produces units in response  to customer orders; often calljust­in­timproduction (orJIT)bc products are only are  only manufactured in response to customer orders and completed just in time to be  shipped to customers.  (2) Lean thinking differs from traditional methods, which organize work departmentally and  encourage departments to maximize their output even if it exceed customer demand and  bloats inventories. Lean approach = minimal inventory, fewer defects, less wasted effort,  and quicker customer response time than traditional   ■ Intrinsic Motivation  ● Comes from within  ● Technical competence (spans the value chain), personal integrity (in terms of work ethic and  honesty), strong communication skills (oral writing)  ● Leader  ■ Extrinsic Incentives  ● Highlight important goals to motivate employees to achieve them  ● Andy getting butt tattoo in office   ■ Cognitive bias  ● All people have distorted thought processes   ● Anchoring bias:​$180 discount too good to pass up  (1) Anchor is the false assertion of production actually worth 200  ● When cog bias cannot be eliminated effective leader should take two steps  (1) Acknowledge their own susceptibility to cog bias  (2) Ack presence of cogn bias in others and introduce techniques to minimize their adverse  consequences.  IV. Appendix 1A: Corporate Governance  A. Effectivecorporate governance enhances stockholder’ confidence that a company is being run in their best interest  rather than in interest of top managers.   B.  Corp governance ​ is a system by which a company is directed and controlled.  ■ If properly implemented the corp governance system should provide incentives for the board of D and top  management to pursue objectives that are in the interest of the company’s owners and should provide for  effective monitoring   ■ However not always monitored welled. Enron! In attempt to respond to these concerns, the US congress  passed the most important reform of corp in many decadesThe Sarbanes­Oxley Act of 2002.   C. The Sarbanes Oxley Act of 2002  ■ The Sarbanes­Oxley Act of 2002 ​ was intended to protect the interest of publically traded companies by  improving reliability and accuracy of corp FS an disclosures.   ■ 6 key concept of legislation  ● First, Act requires both CEO and CFO certify in writing that their FS and disclosures represent the  results of operations. No misrepresentations  ● Second, Act established Public Company Accounting Oversight Board to provide additional  oversight over the audit profession. Board can conduct investigations, take disciplinary actions  against them and enact various standards and rules concerning the prep of audit reports  ● Third, the act places the power to hire, compensate, and terminate the public accounting firm that  audits a company’s FS in the hands of audit committee of the Board of D. Previously, management  had power to hire and fire auditors. Act specifies that all members of the audit must be  independent, therefore not having affiliation w company they are overseeing.  ● Fourth, act places important restrictions on audit firms. Public accounting firms earned a large part  of their profits by providing consulting services to the companies that they audited. This provided  appearance of lack of independence bc a client that was dissatisfied w auditor's stance might  threaten the stop using them as a consulter. Act therefore prohibits a public accounting firm from  providing a  wide variety of non auditing services to an audit client.   ● Fifth, the act requires a comp’s annual report to contaiinternal control report.   (1) Report must state its management’s resp to eat and maintain adequate internal controls  and must contain an assessment by management of the effectiveness of its internal  control structure.   ● The act establishes severe penalties (20 year in prison) for altering or destroying any documents.  As many as 10 years in prison for managers who retaliate against a so called whistle blower.   D. Internal Control ­ A closer look  ■ Internal Controlis a process designed to provide reasonable assurance that objectives are being achieved.   ● Integral part of daily lives  ● Company uses internal controls to provide reasonable assurance that its FR are reliable. Its FS  may contain issues for three reasons  (1) Statements may erroneously exclude some transactions   (2) Improperly include some transactions  (3) Include transactions that have been recorded erroneously  ■ Ex 1A­1 describes 7 types of IC that companies use to reduce risks. Each item in exhibit is labeled as a  preventive controand/or adetective control  ● A preventive control deteres desireable events from occurring   (1) Requiring authorization  (2) Segregation of duties; authorizing transactions, recording trans, maintaining custody of the  related assets  ● A ​detective control ​detect undesirable events that have already occurred.   (1) Reconciliations; senior manager sign all checks above X.   (2) Bank reconciliations; checking dem bank dudes you fuqed up man  (3) Performance reviews actual results are reasonable when compared to relevant  benchmarks.if not then they have to find root of error  ●   ● IC cannot guarantee that obj will be achieved.   (1) May provide reasonable assurance that FS disclosures are reliable, but cannot offer  guarantees bc even a well designed internal control system can break down.   (2) Two or more employees may collude   (3) Finally, a company’s senior leader may manipulate financial results by intentionally  overriding prescribed policies and procedures  Glossary               


Buy Material

Are you sure you want to buy this material for

25 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Bentley McCaw University of Florida

"I was shooting for a perfect 4.0 GPA this semester. Having StudySoup as a study aid was critical to helping me achieve my goal...and I nailed it!"

Allison Fischer University of Alabama

"I signed up to be an Elite Notetaker with 2 of my sorority sisters this semester. We just posted our notes weekly and were each making over $600 per month. I LOVE StudySoup!"

Bentley McCaw University of Florida

"I was shooting for a perfect 4.0 GPA this semester. Having StudySoup as a study aid was critical to helping me achieve my goal...and I nailed it!"

Parker Thompson 500 Startups

"It's a great way for students to improve their educational experience and it seemed like a product that everybody wants, so all the people participating are winning."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.