MANAGERIAL ACCOUNTING

MANAGERIAL ACCOUNTING
 Managerial accounting is concerned with providing information to managers for use within the organization.

FACETS OF MANAGERIAL ACCOUNTING

 Reports to managers inside the organization for planning, controlling and decision making
 It emphasizes on the following:
 Decisions affecting the future
 Relevance
 Timeliness
 Segment reports

THREE PILLARS OF MANAGERIAL ACCOUNTING

 Planning- involves establishing goals and specifying how to achieve them
 Controlling – involves gathering feedback to ensure that the plan is being properly executed or modified as
circumstances change
 Decision making- involves selecting a course of action from competing alternatives

RELATING MANAGERIAL ACCOUNTING TO OPERATIONS MANAGEMENTS

 PLANNING
1. How many units should we plan to produce next period
2. How much should we budget for the next period utility expense
 CONTROLLING
1. Did we spend more or less than expected for the units we actually produced
2. Are we achieving our goal or reducing the number of defective units produce
 DECISION MAKING
1. Should we transfer production of a component part to an overseas supplier
2. Should we redesign our manufacturing process to lower inventory levels

CONTEXT OF MANAGERIAL ACCOUNTING TO BIG Data

BIG Data
 It refers to large collection of data that are gathered from inside or outside a company to provide opportunities
for on-going reporting and analysis.
1. Structured big data – memos and reports
2. Unstructured big data- videos, pictures, audio and other digital forms

5 V’S OF Data
 Variety- data formats in which information is restored. i.e., traditional forms and digital forms, social media,
webpage, sensor-enabled feedback, internet based audio and video files.
 Volume- continuously expanding quantity of data that companies must gather, cleanse, organize and analyze.
 Velocity- rate at which data is received and acted on by organization
  Value- the time and money organizations expend to analyze big data needs to result in insights that are valued
by stakeholders
 Velocity- users expect their data to be accurate and trustworthy

DATA ANALYTICS
 The process of analyzing data with the aid of specialized systems and software to draw conclusions about the
information they contain
 Managers communicate the findings through data visualizations
 Descriptive analytics- what happened
 Diagnostics analytics- why did it happened
 Predictive analytics- what will happen
 Prescriptive analytics- what should be done

ETHICS IN MANAGERIAL ACCOUNTING

1. To maintain high level of professional competence
2. To treat sensitive matters with confidentiality
3. To maintain personal integrity
4. To disclose information in a credible fashion

STRATEGY IN MANAGERIAL ACCOUNTING

Strategy
 Is a game plan that enables a company to attract customers by distinguishing itself from competitors
 It is centered on customer value propositions
Enterprise Risk Management
 Process used by company to identify those risks and develop responses in order to meet goals.
 In managerial accounting, companies use controls to reduce the business risks
 CORPORATE SOCIAL RESPONSIBILITY
 Corporate social responsibility- organizations consider the needs of all stakeholders when making decisions.
 Companies extend beyond legal compliance to include voluntary actions that satisfy stakeholder expectations
PROCESS MANAGEMENT PERSPECTIVE
 Business process- series of steps followed in order to carry out tasks in business
 These steps spans departmental boundaries requiring managers to cooperate across functional
departments
 Value chain- consists of major business functions that add value to company’s products and
services

LEADERSHIP
 Pursuing strategic goal and making optimal decisions
 Leaders need to understand intrinsic motivation, extrinsic incentives and cognitive basis