Managerial Accounting

Chapter 1 Managerial accountingis the process of identifying, measuring, analyzing, interpreting, and communicating information in pursuit of an organizations goals. Managerial accounting is an integral part of the management process, and managerial accountants are important strategic partners in an organizations management team. Four fundamental management processes that help organizations attain their goals Decision making, Planning(developing a detailed financial and operational description of anticipated operations)., Directing operational activities (means running the organization on a day-to-day basis), Controlling(ensuring that the organization operates in the intended manner and achieves its goals) Managerial accountants add value to an organization by pursuing five major objectives (1) Providing information for decision making and planning, and proactively participating as part of the management team in the decision-making and planning processes (2) Assisting managers in directing and controlling operational activities (3) Motivating managers and other employees toward the organizations goals (4) Measuring the performance of activities, subunits, managers, and other employees within the organization (5) Assessing the organizations competitive position, and working with other managers to ensure the organizations long-run competitiveness in its industry Managerial vs. Financial Accounting The focus of managerial accounting is on the needs of managers within the organization, rather than interested parties outside the organization. Financial Accounting is the use of accounting information for reporting to parties outside the organization. See Exhibit 1-3 Roles of CFO or Controller The CFO or controller usually is responsible for supervising the personnel in the accounting department and for preparing the information and reports used in both managerial and financial accounting. As the organizations chief managerial accountant, the CFO or controller often...