Introduction to Management Accounting Global Edition, 16E By Charles T. Horngren
Email: Richard@qwconsultancy.com
Chapter 1 Managerial Accounting, the Business Organization, and Professional Ethics LEARNING OBJECTIVES: When your students have finished studying this chapter, they should be able to:
1.
Explain why accounting is essential for decision makers and managers.
2.
Describe the major users and uses of accounting information.
3.
Explain the role of budgets and performance reports in planning and control.
4.
Describe the cost-benefit and behavioral issues involved in designing an accounting system.
5.
Discuss the role accountants play in the company’s value-chain functions.
6.
Identify current trends in management accounting.
7.
Explain why ethics and standards of ethical conduct are important to accountants.
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CHAPTER 1:
ASSIGNMENTS
CRITICAL THINKING EXERCISES 28. 29. 30. 31.
Finance and Management Accounting Accounting’s Position in the Organization: Controller and Treasurer Marketing and Management Accounting Production and Management Accounting
EXERCISES 32. 33. 34. 35. 36. 37. 38.
Management Accounting and Financial Accounting Planning and Control, Management by Exception Line Versus Staff and Value Chain Responsibility Microsoft’s Value Chain Objectives of Management Accounting Cost-Benefit of the Ethical Environment Early Warning Signs of Ethical Conduct
PROBLEMS 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49.
Management and Financial Accounting Use of Accounting Information in Hospitals Costs and Benefits Importance of Accounting Changes in Accounting Systems Value Chain Role of Controller The Accountant’s Role in an Organization Ethics and Accounting Personnel Ethical Issues Hundred Best Corporate Citizens
CASES 50. 51. 52.
Line and Staff Authority Professional Ethics and Toxic Waste Information in Nike’s 10k Report
EXCEL APPLICATON EXERCISE 53.
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Budgets and Performance Evaluation
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COLLABORATIVE LEARNING EXERCISE 54.
The Future Management Accountant
INTERNET EXERCISE 55.
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Institute of Management Accountants (http://www.imanet.org)
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CHAPTER 1: I.
OUTLINE
Accounting and Decision Making A.
{L. O. 1}
Users of Accounting Information In general, users of accounting information fall into two general categories. 1. Internal managers who use information for day-to-day operating decisions and for long-range strategic decisions, and 2. External parties, such as investors and government authorities, who use the information for making decisions about the company. The internal managers make use of Management Accounting information whereas the external parties make use of Financial Accounting information. See EXHIBIT 1-1 for the major distinctions between these two types of accounting information. Accounting System—a formal mechanism for gathering, organizing, and communicating information about an organization’s activities. A good accounting system helps an organization achieve its goals and objectives by helping to answer three types of questions. 1. 2. 3.
B.
Scorecard Questions (Am I doing well or poorly?)—accumulation and classification of data, Attention-Directing Questions (Which problems should I look into?)— focuses on operating problems and opportunities, and Problem-Solving Questions (Of the several ways of doing the job, which one is best?)—quantifies the likely results of possible courses of action for long-range planning.
Influences on Accounting Systems An accounting system is a formal mechanism for gathering, organizing, and communicating information about an organization’s activities. Reports for external users are bound by generally accepted accounting principles (GAAP) and legal requirements. In the European Union and more than 100 countries worldwide, companies must comply with International Financial Reporting Standards (IFRS). Internal accounting reports are not restricted by GAAP. Costs of developing and operating a system dictate an internal accounting system‘s design. Many
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