Managerial

Accounting

Strategic Cost Management

Management
- A judicious use of means to accomplish an end
- A process of accomplishing work through and with
people
- Involves achieving something (an end or a goal) by
wisely using strategies (ways or means)
- Applied to business organization, management
involves the attainment of certain goals by judiciously
utilizing its capabilities and resources
Two Basic
Functions of Management
1. Planning
- Involves setting of both immediate and long range
goals for the organization

2. Controlling
- The managers see to it that operations are carried out
in the best possible way to ensure the attainment of
business objectives
Management Needs for
Accounting Information
- Information needed by management to carry out its
decision making function may be either quantitative or
non-quantitative.
- The accountant acts as the major channel through
which quantitative information flows to management
and other interested parties.
- The accountant gathers relevant information,
analyses it, breaks it down, sorts it out and organizes it
to come up with a report that may help management
and other parties make sound decisions.
Accounting Branches
Accounting - The measurement and communication of
financial data

Management Accounting
- The application of appropriate techniques and
concepts in processing the historical and projected
economic data of an entity to assist management in
establishing a plan for reasonable economic objectives
and in the making of rational decisions with a view
towards achieving these objectives
Accounting Branches
Financial Accounting
- Refers to reports that are primarily prepared for
external users

Cost Accounting
- Refers to the process of determining the cost of some
particular product or activity
Similarities of FA and MA
- Most elements of financial accounting are also found
in management accounting. This is due to the
following reasons:
1. The same considerations that make generally
accepted accounting principles sensible for the
purposes of financial accounting are applied for
purposes of management accounting. For instance,
management cannot base its reporting system on
unverifiable, subjective data, which is the same reason
that financial accounting adheres to some concepts
and principles like objectivity and cost concept.
Similarities of FA and MA
2. Both financial and managerial accounting draws
information from the same operating accounting
system. There is a presumption therefore that the basic
data are collected in accordance with GAAP, for to do
otherwise would require duplication of data collecting
activities.
The Controller:
Chief Management Accountant
- Person mainly responsible for the accounting aspects
of management planning and control
- Depending on the complexity of the organization’s
structure, the controller’s duties and stature may vary
from company to company
- This may range from being a mere chief accountant,
a bookkeeper to a key officer or executive who aids in
management planning and control
The Controller:
Chief Management Accountant
Two Basic Roles
1. Accumulation and reporting of accounting
information to all levels of management
2. Directing management’s attention to problems and
assisting them in solving such problems
Controllership
- Function of business management which combines
the responsibility for accounting, reporting,
measuring, auditing, taxes, operating controls and
other related areas
Qualifications of The Controller
1. A general understanding of the industry to which
his company belongs
2. A thorough knowledge of his own company
3. An understanding of the basic problems of
production, marketing, finance and personnel
management
4. An understanding of the basic problems of
organization planning and control
Qualifications of The Controller
5. The ability to analyze and interpret accounting and
statistical data
6. Communication skills
7. A thorough knowledge of accounting concepts,
principles and procedures
The Controller and
Certified Public Accountant
- The field of public accounting which is carried on by
certified public accountants serve different clients on
accounting and management matters. This covers
management services by CPAs.
- Private accounting covers the work of the
management accountant or the controller.
- Despite the difference in activities, reports and
beneficiaries of services between public accounting
and private accounting, the CPA and the controller
employ the same body of accounting knowledge in
their work.