This document discusses the roles and responsibilities of management accountants within an organizational structure. It describes how management accountants report to the Chief Financial Officer and work closely with other finance roles like the Controller and Treasurer. The document also outlines the key functions of management accountants including planning, control, reporting, accounting, and other responsibilities. It emphasizes the importance of ethical standards for management accountants regarding competence, confidentiality, integrity, and objectivity.
This document discusses the roles and responsibilities of management accountants within an organizational structure. It describes how management accountants report to the Chief Financial Officer and work closely with other finance roles like the Controller and Treasurer. The document also outlines the key functions of management accountants including planning, control, reporting, accounting, and other responsibilities. It emphasizes the importance of ethical standards for management accountants regarding competence, confidentiality, integrity, and objectivity.
This document discusses the roles and responsibilities of management accountants within an organizational structure. It describes how management accountants report to the Chief Financial Officer and work closely with other finance roles like the Controller and Treasurer. The document also outlines the key functions of management accountants including planning, control, reporting, accounting, and other responsibilities. It emphasizes the importance of ethical standards for management accountants regarding competence, confidentiality, integrity, and objectivity.
This document discusses the roles and responsibilities of management accountants within an organizational structure. It describes how management accountants report to the Chief Financial Officer and work closely with other finance roles like the Controller and Treasurer. The document also outlines the key functions of management accountants including planning, control, reporting, accounting, and other responsibilities. It emphasizes the importance of ethical standards for management accountants regarding competence, confidentiality, integrity, and objectivity.
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THE PROFESSIONAL
ENVIRONMENT OF COST MANAGEMENT CHAPTER 2 Organization structure and the management accountant A major function of the management accountant is that of tailoring the application of the process to the organization so that the organization’s objectives, short term and long-term, are achieved effectively
Management accounting is intended to include persons
involved in such functions as controllership, treasury, financial analysis, planning and budgeting, cost accounting, internal audit, systems, and general accounting Organization structure and the management accountant Line authority is the authority to command action or give orders to subordinates. Line managers are directly responsible for attaining the objectives of the business firm as efficiently as possible.
Functional authority which is the right to command
action laterally or downward with regard to a specific function and specialty THE CHIEF FINANCIAL OFFICER AND THE CONTROLLER Chief Financial Officer (CFO)- also called the finance director in many countries- is the executive responsible for overseeing the financial operations of an organization.
Responsibilities of CFO 1. Controllership- includes providing financial information for reports to managers and reports to shareholders and overseeing the overall operation of the accounting system. THE CHIEF FINANCIAL OFFICER AND THE CONTROLLER Responsibilities of CFO 2. Treasury- includes banking and short and long-term financing, investments and management of cash
3. Risk Management- includes managing financial risk of interest-
rate and exchange-rate changes and derivatives management
4. Taxation- includes income taxes, sales taxes, and international
tax planning. 5. Internal audit- includes reviewing and analyzing financial and other records to attest to the integrity of the organization’s financial reports and to adherence to its policies and procedures. THE CHIEF FINANCIAL OFFICER AND THE CONTROLLER The controller (also called chief accounting officer) is the financial executive primarily responsible for management accounting and financial accounting. T REPORTING RELATIONSHIPS FOR THE CFO AND THE CORPORATE CONTROLLER
Chairman Board of Chief Executive Officer Directors (CEO)
President Chief Operating Officer (COO)
Chief Financial Officer
(CFO)
Controller Treasurer The Controller as the Top Management Accountant Controllership is the practice of the established science of control which is the process by which management assures itself that the resources are procured and utilized according to plans in order to achieve the company’s objectives.
The controller is an integral part of the top management
team. He/she will need not only strong accounting skills but also skills required of all high-level executives. FUNCTIONS OF A CONTROLLER CONTROLLER
Financial Budgeting and Financial
Reporting Performance Analysis and Cost Reporting Special Studies Management
Systems Taxation Development Reporting Basic Functions of Controllership 1. Planning. Established and maintain an integrated plan of operation consistent with the company’s goals and objectives, both short and long term, analyzed and revised, as required, communicated to all levels of management, with appropriate systems and procedures installed.
2. Control. Develop and revise standards against which to measure performance
and provide guidance and assistance to other members of management in insuring conformance of actual results to standards.
3. Reporting. Prepare, analyze and interpret financial results for utilization by
management in the decision making process, evaluate the data with reference to company and unit objectives; prepare and file external reports as required to satisfy government regulatory bodies, shareholders, financial institution, customers and the general public. Basic Functions of Controllership 4. Accounting. Design, established and maintain general and cost accounting systems at all company levels, including corporate, divisional, plant and unit to properly record all financial transactions in the books of accounts and records in accordance with sound accounting principles with adequate internal control.
5. Other Primary Responsibilities. Manage and supervise such functions as taxes,
including interface with the respective taxing authorities and agents; maintain appropriate relationships with internal and external auditors; develop and maintain systems and procedures; develop record retention programs; supervise assigned treasury functions; institute investor and financial public relations programs; office management; and direct other assigned functions. Qualifications of the Controller 1. A excellent technical foundation in accounting and finance with an understanding and thorough knowledge of accounting principles 2. An understanding of the principles of planning, organizing and control. 3. A general understanding of the industry in which the company competes and the social, economic, and political force involved. 4. A thorough understanding of the company, including the technologies, products, policies, objectives, history, organization, and environment. Qualifications of the Controller 5.The ability to communicate with all levels of management and a basic understanding of the other functional problems related to engineering, production, procurement, industrial relations, and marketing. 6. The ability to express ideas clearly in writing or in making informative presentations. 7. The ability to motivate others to achieve positive action and results. The Chief Financial Officer and the Treasurer Treasurership is concerned with the acquisition, financing and management of assets of a business concern to maximize the wealth of the firms for its owners.
Treasurer has custody of the cash and funds invested in
various marketable securities. It is also responsible for maintaining relationships with investors, banks, and other creditors.
Both controller and treasurer report to chief financial officer.
Responsibilities of Treasurer 1. Funds Procurement 2. Banking and Custody of Funds 3. Investment of Funds 4.Operating responsibilities Ethical Standards for Management Accountants In recent years, many concerns have been raised regarding ethical behaviour in business and in public life. Allegations and scandals of unethical conduct have been directed toward managers in virtually all segments of society, including government, business, charitable 0rganizations, and even religion. Although these allegations and scandals have received a lot of attention, it is doubtful that they represent a wholesale breakdown of the moral fiber of the nation. Code of Conduct for Management Accountants Management accountant has ethical responsibilities in four broad areas namely: 1. To maintain a high level of professional competence, 2. To treat sensitive matters with confidentiality 3.To maintain personal integrity 4. To be objective in all disclosing Standards of “Ethical Conduct for Practitioners of Management Accounting and Financial Management COMPETENCE. Maintain an appropriate level of professional competence Perform their professional duties in accordance with relevant laws, regulations and technical standards Prepare complete and clear reports
CONFIDENTIALITY. Refrain from disclosing confidential information Inform subordinates as appropriate regarding the confidentiality of information
INTEGRITY. Avoid actual or apparent conflict of interest Refrain from engaging in any activity that would prejudice their ability to carry out their duties ethically Refuse any gift, favor, or hospitality that would influence their actions. Standards of “Ethical Conduct for Practitioners of Management Accounting and Financial Management Integrity. Refrain from either actively or passively subverting the attainment of the organization’s legitimate and ethical objectives. Recognize and communicate professional limitations or other constraints that would preclude responsibility judgment Communicate unfavorable as well as favorable information Refrain from engaging in or supporting any activity that would discredit the profession. Objectivity Communicate information fairly and objectively Disclose fully all relevant information Company Code of Conduct “Employees like to work for a company that they can trust. Customers like to deal with an ethically reliable business. Suppliers like to sell to firms with which they can have a real partnership. Communities are more likely to cooperate with organizations that deal honestly and fairly with them. If the business community is to function effectively, all of the players need to act ethically” INTERNATIONAL CERTIFICATIONS Certificate of Management Accounting (CMA) Certificate in Public Accounting (CPA) Certificate in Internal Auditing (CIA)
"The Language of Business: How Accounting Tells Your Story" "A Comprehensive Guide to Understanding, Interpreting, and Leveraging Financial Statements for Personal and Professional Success"
"The Language of Business: How Accounting Tells Your Story" "A Comprehensive Guide to Understanding, Interpreting, and Leveraging Financial Statements for Personal and Professional Success"
