The Accountant’s Role in the Organization

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CHAPTER 1

THE ACCOUNTANT’S ROLE IN THE ORGANIZATION

LEARNING OBJECTIVES

1. Describe how cost accounting supports management accounting and financial accounting

2. Understand how management accountants affect strategic decisions

3. Distinguish between the planning and control decisions of managers

4. Distinguish among the problem-solving, scorekeeping, and attention-directing roles of management accountants

5. Identify four themes managers need to consider for attaining success

6. Describe the set of business functions in the value chain

7. Describe three ways management accountants support managers

8. Understand how management accounting fits into an organization’s structure

9. Understand what professional ethics mean to management accountants

CHAPTER OVERVIEW

Chapter 1 is an important foundation chapter. The theme of the text, Cost Accounting: A Managerial Emphasis, 11/E, is the major role that accounting plays in management decision making. Accounting provides information managers need when making decisions. Financial accounting provides information to external managers while modern cost accounting yields insights into what managers and accountants do within an organization. Management accountants provide financial and nonfinancial information to help managers decide how best to deal with challenges and opportunities.

Management accounting is successful when it provides information that improves managers’ strategic, planning, and control decisions. The use of accounting in the planning and control process is introduced and highlighted in the text example.

A framework for understanding management accounting systems in providing managers information is developed in the chapter. The goals, roles, activities, and guidelines of management accounting systems are described through understanding what managers do.

An introduction and discussion of professional ethics including standards of ethical conduct for management accountants is presented.

CHAPTER OUTLINE

Learning Objective 1:
Describe how cost accounting supports management accounting and financial accounting

I. Accounting systems: processing information from economic events into useful information for managers and others

A. Purpose of cost accounting: to provide information

1. Identifying and measuring financial and other information related to the acquisition or consumption of an organization’s resources

2. Providing users of economic information (managers) useful reports and access to needed information

B. Cost accounting: provides information relating to cost of acquiring and utilizing resources for both management and financial accounting

1. Management accounting: focus on internal reporting for decision making of managers in fulfilling organization’s goals

a. Emphasis on the organization—the future and influencing behavior of managers and employees

b. Concern with development and implementation of strategies and policies

2. Financial accounting: focus on external reporting for decision making of those outside the organization

a. Emphasis on financial statements

b.Strict adherence to GAAP

3. Cost management

a. Approaches and activities of managers in planning and control

b. Integral part of general management strategies and their implementation

Do multiple choice 1.Assign Exercise 1-16.

Learning Objective 2:
Understand how management accountants affect strategic decisions

II. Strategic decisions and management accounting: key to a company’s success in creating value for customers while differentiating itself from its competitors

A. Providing information about the sources of competitive advantage

1. Strategy: how an organization uses what it has to get what it wants within the marketplace

2. Two broad strategies used

a....
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