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Managerial Accounting: An Overview
Managerial Accounting: An Overview
An Overview
Chapter 1
PowerPoint Authors:
Susan Coomer Galbreath, Ph.D., CPA
Charles W. Caldwell, D.B.A., CMA
Jon A. Booker, Ph.D., CPA, CIA
Cynthia J. Rooney, Ph.D., CPA
Copyright2012byTheMcGrawHillCompanies,Inc.Allrightsreserved.
1-2
Work of Management
Planning
Planning
Controlling
Controlling
Decision
Decision
Making
Making
1-4
Planning
Establish
Establish Goals.
Goals.
Specify
Specify How
How Goals
Goals
Will
Will Be
Be Achieved.
Achieved.
Develop
Develop Budgets.
Budgets.
1-5
Controlling
The
The control
control function
function gathers
gathers feedback
feedback to
to
ensure
ensure that
that plans
plans are
are being
being followed.
followed.
Feedback
Feedback inin the
the form
form ofof performance
performance reports
reports
that
that compare
compare actual
actual results
results with
with the
the budget
budget
are
are an
an essential
essential part
part of
of the
the control
control function.
function.
1-6
Decision Making
Decision making
making involves
involves
making
making aa selection
selection among
competing
competing alternatives.
alternatives.
What
What should
should
we
we be
be selling?
selling?
Who
Who should
should
we
we be
be serving?
serving?
How
How should
should
we
we execute?
execute?
1-7
Planning
Planning
Controlling
Controlling
Planning
Planning
Controlling
Controlling
Planning
Planning
Controlling
Controlling
Accounting Majors
Many accounting graduates
begin working for public
accounting firms. However,
most leave at some point to
work in other organizations.
CMA Exam
Part 1 Financial Planning, Performance and Control
Planning, budgeting, and forecasting
Performance management
Cost management
Internal controls
Professional ethics
Information
Information about
about becoming
becoming aa CMA
CMA and
and the
the CMA
CMA program
program can
can be
be accessed
accessed
on
on the
the IMAs
IMAs website
website at
at www.imanet.org
www.imanet.org or
or by
by calling
calling 1-800-638-4427.
1-800-638-4427.
1-19
The
The focal point
point of a
companys
companys strategy
strategy should
should
be its
its target
target customers.
customers.
1-20
Product
Leadership Offer higher quality products.
Strategy
1-21
by a company to
proactively identify
and manage risk.
Once
Once aa company
company identifies
identifies its risks, perhaps
perhaps the
most
most common
common riskrisk management
management tactictactic is
is to reduce
reduce
risks
risks by
by implementing
implementing specific
specific controls.
controls.
1-22
Process Management
A business
process is a series of
steps that are followed in order to
carry out some task in
a business.
Product Customer
R&D Design Manufacturing Marketing Distribution Service
Lean Production
Lean Production
Traditional Manufacturing
Lean Production
Because lean thinking only allows production in
response to customer orders, the number of units
produced tends to equal the number of units sold.
Theory of Constraints
A constraint (also called a bottleneck) is anything that
prevents you from getting more of what you want.
The Theory of Constraints (TOC) is based on the observation
that effectively managing the constraint is the key to success.
Theory of Constraints
Only actions
that
2. Allow the strengthen the
weakest link to weakest link in
set the tempo. the chain
improve the
process.
3. Focus on
1. Identify the improving
weakest link. the weakest
link.
4. Recognize that
the weakest link
is stronger.
1-29
Measurement Skills
A good manager
complements an
understanding of
strategy, risks, and
business processes with
data-driven analysis.
Measurement Skills
What
What net
net income
income should
should my
my company
company report
report
to
to its
its stockholders?
stockholders?
Measure
Measure and
and report
report historical
historical data
data that
that
complies
complies with
with applicable
applicable rules.
rules.
How
How will
will my
my company
company serve
serve its
its customers?
customers?
Measure
Measure and
and analyze
analyze mostly
mostly non-financial,
non-financial,
process-oriented
process-oriented data.
data.
Will
Will my
my company
company need
need to
to borrow
borrow money?
money?
Measure
Measure and
and analyze
analyze estimated
estimated future
future cash
cash
flows.
flows.
1-31
Measurement Skills
Leadership Skills
Six Skills of an Effective Leader
1. Technical competence
2. High integrity
3. Understand how to implement organizational
change
4. Strong communication skills
5. Capable of motivating and mentoring other
people
6. Effectively manage team-based decision
processes
1-33
Maintain
Maintain Follow
Follow applicable
applicable
professional
professional Competence laws,
laws, regulations
regulations
competence.
competence. and
and standards.
standards.
Provide
Provide accurate,
accurate, clear,
clear,
concise,
concise, and
and timely
timely decision
decision
support
support information.
information.
1-35
Do
Do not
not use
use
confidential
confidential
information
information forfor Confidentiality
Confidentiality
unethical
unethical or
or illegal
illegal
advantage.
advantage.
Ensure
Ensure that
that subordinates
subordinates do
do
not
not disclose
disclose confidential
confidential
information.
information.
1-36
Disclose
Disclose delays
delays or
or
deficiencies
deficiencies inin information
information
Credibility
Credibility timeliness,
timeliness, processing,
processing, or or
internal
internal controls.
controls.
Disclose
Disclose all
all relevant
relevant
information
information that
that could
could
influence
influence aa users
users
understanding
understanding of of reports
reports
and
and recommendations.
recommendations.
1-38
Environmental
Customers Employees Suppliers Communities Stockholders & Human Rights
Advocates