Managerial Accounting

University of San Carlos

Chapter 1
Managerial Accounting and the Business Environment

Strategy
- Is a “game plan” that enables a company to attract customers by distinguishing itself
from competitors
- The focal point of a company`s should be its target customers

Customer Value Propositions

1. Customer intimacy strategy - understand and respond to individual customer needs
2. Operational excellence strategy - deliver products and services, faster, more
conveniently, and at lower prices
3. Product leadership strategy - offer higher quality products

Organizational structure
- Decentralization is the delegation of decision-making authority throughout an
organization

Two (2) Relationships in an Organization:

1. Line Relationships - line positions are directly related to achievement of the basic
objectives of an organization
Ex. Production supervisors in a manufacturing plant
2. Staff Relationships - staff positions support and assist line positions
Ex. Cost accountants in the manufacturing plant
Managerial Accounting
University of San Carlos
Managerial Accounting
University of San Carlos

IMA Guidelines for Ethical Behavior

1. Competence
- Recognize and communicate professional limitations that preclude responsible
judgment
- Follow applicable laws, regulations and standards
- Provide accurate, clear, concise, and timely decision support information
- Maintain professional competence
2. Confidentiality
- Do not disclose confidential information unless legally obligated to do so
- Ensure that subordinates do not disclose confidential information
- Do not use confidential information for unethical or illegal advantage
3. Integrity
- Mitigate conflicts of interest and advise others of potential conflicts
- Abstain from activities that might discredit the profession
- Refrain from conduct that would prejudice carrying out duties ethically
4. Credibility
- Communicate information fairly and objectively
- Disclose delays or deficiencies information timeliness, processing, or internal
controls
- Disclose all relevant information that could influence a user's understanding of
reports and recommendations
Managerial Accounting
University of San Carlos