3. WHAT IS MANAGERIAL ACCOUNTING?
The process of identification, measurement, accumulation, analysis, preparation, interpretation, and communication of financial information used by management to plan, evaluate, and control within an organization and to assure appropriate use of and accountability for its resources.
Institute of Management Accountants, Statement on Management Accounting #1A, 1981

4. AGAIN I ASK, WHAT IS MANAGERIAL ACCOUNTING?
A profession that involves partnering in management decision making, devising planning and performance management systems, and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization’s strategy.
Institute of Management Accountants, Statement on Management Accounting, Definition of Management Accounting, 2008

5. IN SIMPLER TERMS…
Exhibit 1-1

6. MANAGERIAL ACCOUNTING vs. FINANCIAL ACCOUNTING
An internal rather than external focus

7. MANAGERIAL ACCOUNTING vs. FINANCIAL ACCOUNTING
An internal rather than external focus
Lack of mandated rules
GAAP

8. MANAGERIAL ACCOUNTING vs. FINANCIAL ACCOUNTING
An internal rather than external focus
Lack of mandated rules
Focus on operating segments
© geopaul/iStockphoto

9. MANAGERIAL ACCOUNTING vs. FINANCIAL ACCOUNTING
An internal rather than external focus
Lack of mandated rules
Focus on operating segments
Focus on the future
© Michelle Hillmer/iStockphoto

10. MANAGERIAL ACCOUNTING vs. FINANCIAL ACCOUNTING
An internal rather than external focus
Lack of mandated rules
Focus on operating segments
Focus on the future
Emphasis on timeliness
© Mirjana Jovic/iStockphoto

11. WHAT DO MANAGERS DO?
Planning
Controlling
Evaluating
Decision Making

12. PLANNING IS… What: Who: When:
Setting strategic and operational goals and objectives
Translating these into specific activities
Allocating resources for their achievement
Who:
Upper and middle managers
When:
Strategic: annually, with a 5 to 10 year horizon
Operational: monthly, quarterly, or annually

13. CONTROLLING IS… What: Who: When: Monitoring day-to-day operations
Exerting managerial influence on operations to conform to plans
Taking corrective action as needed
Who:
Managers and line workers
When:
In real time – hourly, daily, weekly

14. EVALUATING IS… What: Who: When:
Comparing actual results to planned results
Assessing individual performance
Taking corrective action as needed
Who:
Managers
When:
Weekly, monthly, quarterly, or annually

15. DECISION MAKING IS… What: Who: When:
Using information to choose the best alternative from available options made in pursuit of a particular goal or objective
Who:
Managers and line workers
When:
As needed

16. MANAGER PRACTICE SESSION 1
Think of yourself as the manager in your approach to this managerial accounting course.
What is your plan (goal) for the course?
How will you control your day-to-day operations?
How will you evaluate your performance?
What decisions will you make?

18. STRATEGY DETERMINES INFORMATION NEEDS
An organization needs to set strategies first and then determine the information required to monitor achievement of those strategies
Different strategies require different information sets
Product differentiation vs. low-cost production
Market share: build, hold, harvest, or divest
Many tools are available to provide this information and assist in decision making activities

19. THE BALANCED SCORECARD
Developed in the early 1990s to provide a multidimensional assessment of strategic achievement
Measures go beyond traditional financial indicators of success

20. SUPPLY CHAIN MANAGEMENT
A network of trading partners (customers and suppliers)
From raw material creation to end user
Get the right products to the right location, in the right quantities, at the right time, at the right cost
Identify the supply chain trading partners involved in getting your textbook for this course into your hands.

21. JUST-IN-TIME (JIT) INVENTORY
An inventory management philosophy that attempts to minimize the amount of inventory on hand
Requires frequent deliveries of small lots of materials
Requires a complementary quality program since there is no extra inventory to replace defective components

22. ENTERPRISE RESOURCE PLANNING (ERP) SYSTEMS
An information system that integrates the organization’s data into a single system
Facilitates the sharing of information across the organization to support decision making activities

24. WHAT IS ETHICAL BEHAVIOR?
Knowing right from wrong, and then doing the right thing
Ethical behavior is not necessarily the same thing as legal behavior
Unethical behavior can result in catastrophic results
Top managers in the organization must model ethical behavior for the rest of the organization

25. IMA Statement of ethical professional practice
Overarching principles: Honesty, Fairness, Objectivity, Responsibility
Four standards
Competence
Confidentiality
Integrity
Credibility
Steps to resolve ethical conflict

26. UNETHICAL BEHAVIOR IS AROUND
Sources: Ethics Resource Center, National Business Ethics Survey: How Employees View Ethics in Their Organizations and National Business Ethics Survey: An Inside View of Private Sector Ethics, 2007