Managerial Accounting Chapter 1
Focuses on providing internal mgmt. with information it needs to run the company efficiently and effectively (internal accounting)
Comparing and evaluating actual results with planned results and taking corrective action
Setting goals & objectives and determining how to achieve them
How do managerial accounting and financial accounting differ? (managerial)
-future time frame
-segmented format of data (financial statements)
-no mandatory rules
How do managerial accounting and financial accounting differ? (financial)
-past time frame
-whole format of data (financial statements)
-GAAP, some by SEC (regulatory environment)
Cross Functional Teams
Employees representing various functions of the company
Role and Responsibilities of the Managerial Accountant
-internal advisor for organization, provide all sorts of info
-need to oversee operations, skills needed- problem solving, analytical, accounting, understand how the business operations
-more knowledge over just accounting
-work in team
-oral and written communication
The goal of managerial accounting is to provide accurate financial records for external reporting? T or F
Financial and managerial accounting are similar in that both:
useful for making decisions
important to build loyalty to employees
knowledge, skills, and training to do the job
-education doesn’t end when you graduate (new technology)
keep business stuff private to the company
-do what’s right when no one is looking, difference in ethics
-acceptable to take gift from supplier? depends on code of conduct of that business
open and fair, disclosure of relevant information
Core ethical values include:
-pursuit of excellence
If an organization ha a published code of conduct, its employees will not become involved in unethical behavior? T or F
Integrity is measured in terms of what s right and just. What is a question that a CPA can ask to test decisions?
Have I retained my integrity?
Which of the following statements best describes the differences between financial and managerial accounting?
Managerial accounting tends to focus on relevant, subjective, future-oriented information while financial accounting relies primarily on objective, reliable, and historical information.
Suppose you have decided that you would to like to purchase a new car, and have several choices for financing the new car. You can pay cash, take out a loan from the bank, or borrow money from your parents. You choose to borrow money from your parents. This is an example of:
Name the one management accounting objective that best describes monitoring actual results to see whether the objectives set in the planning stage re being met and, if necessary, taking corrective action to adjust the objectives or implementation of the plan
Managerial accounting focuses on detailed information about product lines, departments, etc. a compared to financial accounting. T or F
Which of the following management responsibilities often involves the use of budgets?
the quantitative expression of a plan
-get analyzed before determining if expansion makes sense
raising capital by issuing stocks and bonds and investing, cash controller
internal audit function
assessing effectiveness of company’s internal controls and risk management policies
subcommittee of Board of directors responsible for overseeing internal audit function and annual financial statement audit by independent CPA’s
Board of Directors
oversee company (meet periodically)
-managerial and financial accounting knowledge
-how business functions
-oral and written skills
-strong excel skills
Institute of Managerial Accountants (IMA)
professional association in U.S.
Certified Management Accountant (CMA)
exam focuses on economic and business finance
American Institute of Certified Public Accountants (AICPA)
World’s largest association joined with England’s Chartered Institute of Managerial Accountants (CIMA)
Chartered Global Managerial Accountant (CGMA)
recognize unique business and accounting skills set possessed by those CPA’s who fill, or have filled, accounting role within an organization
The IMA’s overarching ethical principles include the following:
The IMA’s ethical standards include:
Managerial accounting differs from financial accounting in that managerial accounting…
emphasizes data relevance over data objectivity
Which corporate position is responsible for raising capital and investing funds?
Which of the following organizations is the professional association for management accountants?
Which of the following professional standards requires management accountants to mitigate conflicts of interest?