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    Chapter 1 Notes

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    Managerial accounting provides internal information to managers to aid in planning, controlling, and decision making. It focuses on segments of the organization and helps evaluate performance through budgets, cost analysis, and reports. Managerial accounting skills are important for most accounting careers as only about 20% of accountants work in public accounting which requires financial accounting skills. Certifications in areas like management accounting can increase one's career mobility and compensation. Effective management requires considering perspectives like ethics, strategy, risk management, social responsibility, process management, and leadership.

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    Chapter 1 Notes

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    Summer
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    Managerial accounting provides internal information to managers to aid in planning, controlling, and decision making. It focuses on segments of the organization and helps evaluate performance through budgets, cost analysis, and reports. Managerial accounting skills are important for most accounting careers as only about 20% of accountants work in public accounting which requires financial accounting skills. Certifications in areas like management accounting can increase one's career mobility and compensation. Effective management requires considering perspectives like ethics, strategy, risk management, social responsibility, process management, and leadership.

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    Managerial accounting provides internal information to managers to aid in planning, controlling, and decision making. It focuses on segments of the organization and helps evaluate performance through budgets, cost analysis, and reports. Managerial accounting skills are important for most accounting careers as only about 20% of accountants work in public accounting which requires financial accounting skills. Certifications in areas like management accounting can increase one's career mobility and compensation. Effective management requires considering perspectives like ethics, strategy, risk management, social responsibility, process management, and leadership.

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    Download as docx, pdf, or txt
    31 views3 pages

    Chapter 1 Notes

    Uploaded by

    Summer
    Managerial accounting provides internal information to managers to aid in planning, controlling, and decision making. It focuses on segments of the organization and helps evaluate performance through budgets, cost analysis, and reports. Managerial accounting skills are important for most accounting careers as only about 20% of accountants work in public accounting which requires financial accounting skills. Certifications in areas like management accounting can increase one's career mobility and compensation. Effective management requires considering perspectives like ethics, strategy, risk management, social responsibility, process management, and leadership.

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    Chapter 1 Managerial Accounting Overview

    Managerial accounting provides information to managers for use within the organization (internal
    users).
    Financial accounting reports financial information to external parties.

    Comparison of Financial and Managerial Accounting: (textbook page 2)

    Segment part or activity of an organization about which managers would like cost, revenue, or profit
    data.
    - Product lines, customer groups, territories, divisions, plants, departments

    Managerial accounting helps managers perform three important activities:


    - Planning establishing goals and specifying how to achieve them
    o Budget detailed plan for the future that is usually expressed by numbers
    - Controlling gathering feedback to ensure the plan is properly executed or being modified
    as circumstances change
    o Performance report compares budgeted data to actual data to identify and learn
    from good performance and to eliminate sources of bad performance
    - Decision making selecting a course of action from alternatives
    o most basic managerial skill is ability to make intelligent, data-driven decisions
    What should we be selling?
    Who should we be serving?
    How should we execute?

    Why does Managerial accounting matter to your career?

    Institute of Management Accountants (IMA) estimate 80% of professional accountants in the US work
    in nonpublic accounting

    Public accountants need strong financial accounting background. Managerial accountants need both
    financial and planning, controlling, decision-making skills.

    Certifications can increase credibility, your career mobility, and compensation:


    Certified Management Accountant (CMA) focuses on planning, controlling, decision-making skills
    Certified Public Accountant (CPA) focuses on rule-based compliance, financial accounting standards,
    business law, tax code
    6 basic management perspectives need more than numbers to enable intelligent planning, control
    and decision making:
    - Ethics perspective to maintain high ethical responsibilities
    o Maintain high level of professional competence
    o Teat sensitive mattes with confidentiality
    o Maintain personal integrity
    o Disclose information in a credible fashion
    - Strategic management perspective - having a strategy
    o a game plan that enables a company to attract customers and set itself apart from
    competitors
    - Enterprise risk management perspective
    o process used by a company to identify risks and develop responses to ensure goals
    will still be met
    - Corporate Social Responsibility perspective
    o Responsibility not only for producing financial results, but also other stakeholders
    such as:
    Customers safe, high-quality products, full disclosure of product-related
    risks
    Suppliers fair contract terms and prompt payments
    Stockholders access to complete and accurate financial info, full disclosure
    of risks
    Employees safe and human working conditions, fair compensation
    Communities payment of taxes, honest info about corporate plans
    Environments greenhouse gas emission data, recycling
    - Process Management perspective
    o Business processes serve the needs of a companys most important stakeholders
    its customers, so managers have to work together, across departments to achieve a
    task
    Business process series of steps that are followed in order to carry out
    some task in a business
    Value chain the major business functions that add value to a companys
    products and services
    - Leadership perspective the ability to unite behaviors, diverse needs, beliefs and goals of
    their fellow employees to pursue strategic goals and make optimal decisions.
    o Intrinsic motivation motivation that comes from within us
    o Extrinsic incentives giving things to employees to motivate them when a goal is
    achieved (bonus structure, employee appreciation party)
    o Cognitive bias leaders must be aware that all people (including themselves)
    possess a cognitive bias, or distorted thought process, that can adversely affect
    planning, controlling, decision making.

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