1. 3310 – Chapter 1 Cost Accounting: Information for Decision Making

2. Value Creation in Organizations Value chain (Exhibit 1-1, page 4) 1.Research and development 2.Design 3.Purchasing 4.Production 5.Marketing and sales 6.Distribution 7.Customer service

3. Value Creation in Organizations Using cost information to increase value –Value chain –Supply chain –Distribution chain Identifying value-added activities Eliminating non-value-added activities

4. Accounting Systems CostFinancial InternalExternal Prepared for Prepared for managersinvestors and creditors Future-orientedHistorical SegmentedWhole company Any formatOften follows GAAP

5. Cost Data for Managerial Decisions Cost drivers Different costs for different purposes Cost control and evaluation Budgeting Different data for different decisions Cost-benefit approach

6. Trends Lean manufacturing and accounting ABC Performance measures Benchmarking Customer profitability analysis Outsourcing/insourcing Cost of quality

7. Key Financial Players in the Organization Chief Financial Officer (CFO) Treasurer Controller Internal auditor Cost accountant Other positions

8. Ethical Issues for Accountants Increased Importance IMA Code of Ethics (Appendix) –Competence –Confidentiality –Integrity –Credibility Resolution of Ethical Conflict (Appendix) Codes of Ethics – Company Codes of Conduct on the International Level

9. Sarbannes-Oxley Act of 2002 Executives (CEO and CFO) are now responsible for everything in their financial statements!!!! –They must both sign the financial statements and say that the financial statements do not omit “material” information. –They must disclose that they have evaluated the company’s internal controls. –They must notify the company’s auditors and the audit committee of the board of any fraud that involves management. Executives signing off on fraudulent statements will go to criminal jail (No country clubs!)

10. Certified Management Accountant (CMA) Exam NOW TWO PARTS ONLY: 1.Financial Planning, Performance & Control 2.Financial Decision Making

11. Homework Problems 1-40, 1-43 (2 points each) DUE THURSDAY, AUGUST 27