Matakuliah
Tahun
: F0254 / Akuntansi Manajemen
: 2007
Managerial Accounting & the Business
Environment
Pertemuan 01
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Managerial Accounting and Financial
Accounting
Managerial accounting
provides information
for managers inside an
organization who
direct and control
its operations.
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Financial accounting
provides information
to stockholders,
creditors and others
who are outside
the organization.
Work of Management
Planning
Directing and
Motivating
Controlling
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Exh.
1-1
Planning and Control Cycle
Formulating longand short-term plans
(Planning)
Comparing actual
to planned
performance
(Controlling)
Decision
Making
Measuring
performance
(Controlling)
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Begin
Implementing
plans (Directing
and Motivating)
Differences Between Financial and
Managerial Accounting
Financial Accounting
Managerial Accounting
External persons who
make financial decisions
Managers who plan for
and control an organization
Historical perspective
Future emphasis
3. Verifiability
versus relevance
Emphasis on
verifiability
Emphasis on relevance
for planning and control
4. Precision versus
timeliness
Emphasis on
precision
Emphasis on
timeliness
5. Subject
Primary focus is on
the whole organization
Focuses on segments
of an organization
6. Requirements
Must follow GAAP
and prescribed formats
Need not follow GAAP
or any prescribed format
1. Users
2. Time focus
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Organizational Structure
Decentralization is the delegation of decision-making authority
throughout an organization.
Corporate Organization Chart
Board of Directors
President
Purchasing
Personnel
Vice President
Operations
Chief Financial
Officer
Treasurer
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Controller
Line and Staff Relationships
Line position are directly
related to achievement of the
basic objectives of an
organization.
– Example: Production
supervisors in a
manufacturing plant.
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Staff positions support and
assist line positions.
– Example: Cost accountants
in the manufacturing plant.
The Changing Business Environment
•
•
•
•
Growth of the internet
Just-in-Time production
Total Quality Management
International competition
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Business environment
changes in the past
twenty years
The Changing Business Environment
New tools for
managers!
Just-In-Time
Total Quality
Management
Process Reengineering
Theory of Constraints
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Just-in-Time (JIT) Systems
Receive
customer
orders.
Complete products
just in time to
ship customers.
Schedule
production.
Receive materials
just in time for
production.
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Complete parts
just in time for
assembly into products.
JIT Consequences
Improved
plant layout
Reduced
setup time
Zero production
defects
Flexible
workforce
JIT purchasing
Fewer, but more ultrareliable suppliers.
Frequent JIT deliveries in small lots.
Defect-free supplier deliveries.
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Benefits of a JIT System
Reduced
inventory
costs
Freed-up funds
Greater
customer
satisfaction
Higher quality
products
Increased
throughput
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More rapid
response to
customer orders
Total Quality Management
Where are we?
Benchmarking
Do we need
to change
the plan?
Where do we want to go?
Plan
Act
is
Check
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How are we doing?
Do
How do
we start?
Continuous
Improvement
Process Reengineering
A business process
is diagrammed
in detail.
Every step in
the business
process must
be justified.
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Anticipated results:
Process is simplified.
Process is completed
in less time.
Costs are reduced.
Opportunities for
errors are reduced.
The process is
redesigned to include
only those steps that make
our product more valuable.
Theory of Constraints
A sequential process of identifying and removing constraints
in a system.
Restrictions or barriers that impede
progress toward an objective
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Theory of Constraints
Only actions
that strengthen
the weakest link
in the “chain”
improve the
process.
2. Identify
process
constraints
1. Measure
process
capacity
3. Use
bottlenecks
effectively.
4. Coordinate
processes
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Theory of Constraints
Process
Capacity
A measure of a
process’s ability
to transform
resources into
value products
and services.
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System
Constraint
The point in a
system that
limits the overall
output of the
system. Often
called the
“bottleneck.”
International Competition
•
Meeting world-class competition demands a worldclass management accounting system.
• Managers must make decisions to plan, direct, and
control a world-class organization.
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E-Commerce
During 2001, many dot.com businesses
failed that might have benefited from the
application of managerial accounting
tools:
– cost concepts (Chap. 2)
– cost estimation (Chap. 5)
– cost-volume-profit (Chap. 6)
– activity-based costing (Chap. 8)
– budgeting (Chap. 9)
– decision-making (Chap. 13)
– capital budgeting (Chap. 14)
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Importance of Ethics in Accounting
• Ethical accounting practices build trust and
promote loyal, productive relationships with users
of accounting information.
• Many companies and professional organizations,
such as the Institute
of Management Accountants (IMA),
have written codes of ethics which
serve as guides for employees.
– Code of Conduct for Management Accountants
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IMA Code of Ethics for Management
Accountants
Four broad areas of
responsibility:
•
•
•
•
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Maintain a high level of
professional competence
treat sensitive matters with
confidentiality
Maintain personal integrity
Be objective in all disclosures
IMA Code of Ethics for Management
Accountants
Follow applicable laws,
regulations and
standards.
Maintain
professional
competence.
Competence
Prepare complete and clear
reports after appropriate
analysis.
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IMA Code of Ethics for Management
Accountants
Do not disclose confidential
information unless legally
obligated to do so.
Do not use
confidential
information for
personal
advantage.
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Confidentiality
Ensure that subordinates do
not disclose confidential
information.
IMA Code of Ethics for Management
Accountants
Avoid conflicts of interest
and advise others of
potential conflicts.
Do not subvert
organization’s
legitimate
objectives.
Integrity
Recognize and
communicate personal and
professional limitations.
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IMA Code of Ethics for Management
Accountants
Avoid activities that could
affect your ability to
perform duties.
Refrain from
activities
that could
discredit the
profession.
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Integrity
Communicate
unfavorable as well as
favorable information.
Refuse gifts
or favors
that might
influence
behavior.
IMA Code of Ethics for Management
Accountants
Communicate information
fairly and objectively.
Objectivity
Disclose all information
that might be useful to
management.
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IMA Code of Ethics for Management
Accountants
Resolution of Ethical Conflict
Follow established policies.
For unresolved ethical conflicts:
– Discuss the conflict with immediate
superior.
– If immediate superior is the CEO, consider
the board of directors or the audit
committee.
– Except where legally prescribed, maintain
confidentiality.
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IMA Code of Ethics for Management
Accountants
Resolution of Ethical Conflict
Clarify issues in a confidential
discussion with
an objective advisor.
Consult an attorney as to legal
obligations.
The last resort is to resign.
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End of Chapter 1
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