Professional Documents
Culture Documents
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Learning Objectives (1 of 3)
Describe the relationships among financial, management, and cost accounting Identify the sources of authoritative pronouncements for the practice of cost accounting Identify the sources of ethical standards for cost accounting
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Learning Objectives (2 of 3)
Describe a mission statement and why it is important to organizational strategy Explain what accountants must understand about an organizations structure and business environment in order to perform effectively in that organization
Learning Objectives (3 of 3)
Describe a value chain and the major value chain functions Describe how a balanced scorecard is used to implement an organizations strategy Describe why ethics is so important in an organization
Accounting
Accountants
Financial accountants provide information to external parties investors, creditors, regulators
Managerial accountants provide information to internal users - managers Cost accountants provide information to both internal and external users product
cost information
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Management
Meet internal information needs Does not have to comply with GAAP
Accounting Differences
Financial
External focus Whole organization Historical Quantitative Monetary Verifiable GAAP Formal recordkeeping
Accounting Differences
Financial
External focus Whole organization Historical Quantitative Monetary Verifiable GAAP Formal recordkeeping
Managerial
Internal focus Segments or divisions Current/projected Quantitative/qualitative Monetary and nonmonetary Timely/reasonable estimate Benefits exceed costs Formal and informal 9 recordkeeping
FINANCIAL ACCOUNTING
Internal parties
Planning, controlling, decision making Evaluating performance Includes upstream and downstream costs Disaggregated
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Professional Ethics
Earnings management--deliberate accounting adjustments to hit profit targets Often adjustments involve cost accountingproduct costs and inventory valuations Stretching legitimate accounting techniques Outright fraud
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Organizational Strategy
1. Develop Mission Statement 2. Implement strategy 3. Deploy resources to create value for customers and shareholders 4. Recognize that each organization is uniquethus unique strategies must be developed
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Organizational Strategy
1. Develop Mission Statement 2. Implement strategy
Establish appropriate measures of accomplishment Develop, implement, and monitor necessary information systems
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Organizational Strategy
Five factors core competencies organizational structure management style and organizational culture organizational constraints environmental constraints
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Organizational Strategies
Core competency critical function or activity providing a competitive advantage Cost leadership strategy - undercut competitor prices Product differentiation strategy - superior quality products or unique services sold at a premium
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Organizational Structure
Distribution of authority and responsibility in an organization Authority right to use resources to accomplish a task or achieve an objective Responsibility obligation to accomplish a task or achieve an objective
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Organizational Structure
Line manager works directly toward attaining organizational goals Staff employees give assistance and advice to line managers Treasurer and Controller
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Value Chain
Set of value-adding functions and processes that convert inputs into products/services
Research and Development Product Design Supply Production Marketing Distribution Customer Service
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Balance Scorecard
Four perspectives Learning and Growth Internal Business Customer Value Financial
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Balanced Scorecard
Learning and Growth Customer Value
Internal Business
Financial
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Balanced Scorecard
Learning and Growth
Use the organizations intellectual capital to adapt to changing customer needs or to influence new customers needs and expectations through product or service innovations
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Balanced Scorecard
Learning and Growth Internal Business
Things to do well to meet customer needs and expectations
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Balanced Scorecard
Learning and Growth Internal Business
Things to do well to meet customer needs and expectations
Customer Value
How well the organization is doing relative to important customer criteria
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Balanced Scorecard
Learning and Growth Internal Business
Things to do well to meet customer needs and expectations
Customer Value
How well the organization is doing relative to important customer criteria
Financial
Address stockholders/stakeholders concerns about profitability and organizational growth
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Balanced Scorecard
Four perspectives Learning and Growth Internal Business Customer Value Financial Performance
Measures Short-term and long-term Internal and external Financial and nonfinancial
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Ethics in Multinationals
Foreign Corrupt Practices Act prohibits bribes to obtain/retain business Organization of Economic Cooperation and Development Convention crime to offer, promise, give bribes to obtain/retain internal business deals
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Questions
What is the relationship among financial, management, and cost accounting? How is the balanced scorecard used to implement an organizations strategy? Where can an accountant find ethical standards for cost accountants?
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