02 Hilton_MA_12e_Chap001_PPT - Tagged

Page 1: Introduction

  • The Crucial Role of Managerial Accounting in a Dynamic Business Environment.

  • Published by McGraw-Hill/Irwin, 2020.

Page 2: Definition of Managerial Accounting

  • Managerial Accounting is the process of:

    • Identifying

    • Measuring

    • Analyzing

    • Interpreting

    • Communicating information.

  • Focuses on the business partnership with management.

Page 3: Management Responsibilities

  • Managerial Accounting involves:

    • Managing resources, activities, and people within an organization.

    • Organized set of activities includes:

      • Planning: Determining future goals and actions.

      • Directing: Overseeing day-to-day operations.

      • Decision Making: Selecting the best course of action.

      • Controlling: Monitoring organizational performance.

    • Organizations acquire resources such as funding, patents, and buildings.

    • Hiring and management of personnel.

Page 4: Objectives of Managerial Accounting

  • Key Objectives include:

    • Providing information for decision making and planning.

    • Assisting managers in directing and controlling activities.

    • Motivating managers and employees toward organizational goals.

    • Measuring the performance of subunits, activities, and managers.

    • Assessing the organization's competitive position and fostering long-term competitiveness.

Page 5: Comparison of Managerial and Financial Accounting

  • Managerial Accounting:

    • Focuses on internal information for decision making, planning, and controlling operations.

  • Financial Accounting:

    • Produces published financial statements and reports for external users.

  • Internal vs. External Users:

    • Managerial: Managers within the organization.

    • Financial: Interested parties outside the organization.

Page 6: Users and Regulation

  • Users of Information:

    • Managerial Accounting: Internal managers.

    • Financial Accounting: External parties.

  • Regulation:

    • Managerial: Not required and unregulated.

    • Financial: Must conform to GAAP, regulated by FASB and SEC.

  • Source of Data:

    • Managerial: Basic accounting system, operational metrics.

    • Financial: Primarily historical financial data.

  • Nature of Reports:

    • Managerial: Focus on subunits, combination of historical data and forecasts.

    • Financial: Focus on the whole enterprise, based on historical transactions.

Page 7: Line and Staff Positions

  • Line Positions:

    • Directly involved in providing goods or services (e.g., production supervisor).

  • Staff Positions:

    • Support line positions (e.g., cost accountant).

Page 8: Role of CFO or Controller

  • The CFO/controller is responsible for:

    • Supervising accounting personnel.

    • Preparing managerial and financial reports.

    • Analyzing accounting information.

    • Supporting planning and decision making.

Page 9: Value Chain Considerations

  • Components of Value Chain:

    • Product design, research and development.

    • Strategic cost management, securing raw materials.

    • Production, marketing, distribution, and customer service.

Page 10: Managerial Accounting Careers

  • Professional Organizations:

    • Institute of Management Accountants (IMA).

    • Publishes resources and conducts research.

    • Administers Certified Management Accountant (CMA) program.

    • Develops Standards of Ethical Conduct for Management Accountants.

Page 11: Conclusion

  • Overview of key managerial accounting principles and its crucial role in business decision-making.