Professional Documents
Culture Documents
An electronic
presentation by
Douglas Cloud
Pepperdine University
1 -2
Introduction:
CHAPTER
The Role,
History, and
Direction of
Management
Accounting
1 -4
Objectives
Discuss the need for management accounting
After studying this
information.
chapter, you should
Differentiate between management accounting
be able to:
and financial accounting.
Provide a brief historical description of
management accounting.
Identify the current focus of management
accounting.
Continued
1 -5
Objectives
5. Describe the role of management accountants in
an organization.
6. Explain the importance of ethical behavior for
managers and management accountants.
7. List three forms of certification available to
management accountants.
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Management Accounting
Information System
Collecting Special Reports
Measuring Product Costs
Storing Customer Costs
Analyzing Budgets
Reporting Performance Reports
Economic Managing Personal Communication
Events
Inputs Processes Outputs
Users
1 -8
Management Process
Management Process
Management Process
Management Process
Feedback is information
that can be used to
evaluate or correct the
steps being taken to
implement a plan.
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Management Process
Differentiate Between
Management Accounting and
Financial Accounting
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Management Accounting Financial Accounting
Targeted Users
Management
accounting
focuses on
providing
information for
internal users.
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Targeted Users
Financial
accounting focuses
on provided
information for
ABC external users.
Company
Annual
Report
1 -17
Management Accounting Financial Accounting
Types of Information
For
Themanagement
restrictions imposed
accounting,
on
the
financial
financial
accounting
or nonfinancial
tend to
produce
information
objective
may be and
much
verifiable
more
financial
subjectiveinformation.
in nature.
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Management Accounting Financial Accounting
Time Orientation
Management
accounting strongly
emphasizes providing
information about
future events.
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Time Orientation
Financial
accounting records
and reports events
that have already
happened.
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Management Accounting Financial Accounting
Degree of Aggregation
Management
accounting provides
measures and internal
reports used the
evaluate performance of
entities, product lines,
departments, and
managers.
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Degree of Aggregation
Financial
accounting focuses
on overall firm
performance.
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Management Accounting Financial Accounting
Breadth
It includes aspects of managerial
Management accounting is much
economics, industrial engineering,
broader than financial accounting.
and management science.
Historical Description of 1 -29
Management Accounting
1880 - 1925 Most of the product-costing and internal
accounting procedures used in this century
were developed
1925 Emphasis of inventory costing for external
reporting
1950s/60s Effort to improve the managerial
usefulness of traditional cost systems
1980s/90s Significant efforts have been made to
radically change the nature and practice of
management accounting
1 -30
Planting and
Value Chain: Cultivating
Apple Industry
Harvesting Firm
B
Distribution of
Apples
Firm
A Applesauce
Production Firm
C
Product Disposal Applesauce
Distribution
The role of
management
accountants in an
organization is
one of support.
Partial Organization Chart, 1 -38
Manufacturing Company
President
Line Function Staff Function
Production Financial
Vice President Vice President
Production
Supervisor Controller Treasurer
Ethical
Behavior
Michael Josephson’s* Ten Ethical Values:
Honesty Caring for others
Integrity Respect for others
Promise keeping Responsible
citizenship
Fidelity
Pursuit of excellence
Fairness
Accountability
*Michael Josephson, “Teaching Ethical Decision Making and Principled
Reasoning”
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Professional Certifications
The CMA
Chapter One
The End
1 -43