ACCT2000_Sam Ieng_Ch. 01
The Manager and Management Accounting
Financial vs. Management Accounting
Financial Accounting
Management Accounting
Communicate financial
position to OUTSIDERS
Decision making for
INTERNAL MANAGERS
Focus
Past-oriented
Future-oriented
Rules
GAAP compliant;
CPA audited
Do not have to follow GAAP;
cost vs. benefit
Time span
Historical monthly, quarterly
reports
Ultra current to very long time
horizons
Behavioral issues
Indirect effects on employee
behavior
Designed to influence
employee behavior
Purpose & primary
users
Strategy & Management accounting
Strategy: specifies how an organization matches its own capabilities with the opportunities in the
marketplace to accomplish its objectives
Management accounting & Value
Value: the usefulness customers gain from a company’s products/services
Value chain: sequence of business functions in which customer usefulness is added to products/services
 R & D / Design / Production / Marketing / Distribution / Customer service
Key success factors: the dimensions of performance customers expect and that are key to the success
of a company
 cost and efficiency; quality; time; innovation; sustainability
Planning & Control
Planning: selects goals, predicts results, decides how to attain goals, and communicates this to the
organization
Control: executes the plan, evaluates performance, and provides feedback and learning to help future
decision making
Management accounting guidelines
-
Cost-benefit approach: benefits > costs
Behavioral and technical considerations
Different costs for different purposes
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ACCT2000_Sam Ieng_Ch. 01
Professional ethics
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