1. TheRole of Managerial Accounting in a Dynamic Business EnvironmentBYBABASAB PATIL

2. LearningObjective 1 3. Define Managerial Accounting

Managerial accountingis the process of

Identifying

Measuring

Analyzing

Interpreting

Communicating information

4. LearningObjective 2 5. Managing Resources, Activities, and People

An organization . . .

Acquires Resources Hires People Organized set of activities Decision Making Planning Directing Controlling 6. LearningObjective 3 7. How Managerial Accounting Adds Value to the Organization

Providing information for decision making and planning.

Assisting managers in directing and controlling activities.

Motivating managers and other employees towards organizations goals.

Measuring performance of subunits, activities, managers, and other employees.

Assessing the organizations competitive position.

8. The Balanced Scorecard How do welook to owners? How do customers see us? How can we continue to improve? In which activities must we excel? Financial Perspective GoalsMeasures Customer Perspective GoalsMeasures Operations Perspective GoalsMeasures Innovation Perspective GoalsMeasures 9. LearningObjective 4 10. Managerial versus Financial Accounting Accounting System (accumulates financial and managerial accounting data in the cost accounting system) Managerial Accounting Information for decision making, planning, and controlling an organizations operations. Financial Accounting Published financial statements and other financial reports. Internal Users External Users 11. Managerial versus Financial Accounting 12. LearningObjective 5 13.

A staff position supports and assists line positions.

• Example:A cost accountant in the manufacturing plant.

Line and Staff Positions

Aline positionis directly involved in achieving the basic objectives of an organization.

• Example:A production supervisor in a manufacturing plant.

14. LearningObjective 6 15. Controller

The chief managerial and financial accountant responsibility for:

• Supervising accounting personnel

• Preparation of information and reports, managerial and financial

• Analysis of accounting information

• Planning and decision making

16. Treasurer

Responsible for raising capital and safeguarding the organizations assets.

• Supervises relationships with financial institutions.

• Work with investors and potential investors.

• Manages investments.

• Establishes credit policies.

• Manages insurance coverage

17. Internal Auditor

Responsible for reviewing accounting procedures, records, and reports in both the controllers and the treasurers area of responsibility.

• Expresses an opinion to top management regarding the effectiveness of the organizations accounting system.

18. LearningObjective 7 19. Major Themes in Managerial Accounting Managerial Accounting Information and Incentives Costs and Benefits Evolution and Adaptation Behavioral Issues 20. Evolution and Adaptation in Managerial Accounting E-Business Service vs.Manufacturing Firms Emergence of New Industries Global Competition Focus on the Customer Cross-Functional Teams Product Life Cycles Time-BasedCompetition Information and Communication Technology Just-in-Time Inventory Total Quality Management Continuous Improvement Change 21.

Objectives

Measure the cost of resources consumed.

Identify and eliminate non-value-added costs.

Cost Management Systems Cost Management System 22.

Objectives

Determine efficiency and effectiveness of major activities.

Identify and evaluate new activities that can improve performance.

Cost Management Systems Cost Management System 23. LearningObjective 8 24. Strategic Cost Management and the Value Chain Product Design Research and Development Securing raw materials and other resources Production Marketing Distribution Customer Service Start 25. Theory of Constraints

A sequential process ofidentifying and removing constraints in a system.

Restrictions or barriers that impede progress toward an objective 26. LearningObjective 9 27. Ethical Climate of Business

The corporate scandals experienced over the last few years have shown us thatu nethical behavior in business is wrong in a moral sense and can be disastrous in the economy.In addition to Sarbanes-Oxley, there will likely be more reforms in corporate governance and accounting.

28. LearningObjective 10 29. Managerial Accounting as a Career

Professional Organizations

Institute of Management Accountants (IMA) Publishes Management Accounting and research studies. Administers Certified Management Accountant program Develops Standards of Ethical Conduct for Management Accountants 30. Professional Ethics

Competence

Confidentiality

Integrity

Credibility

31. End of Chapter 1