Вы находитесь на странице: 1из 22


B.COM (HONS); Msc. ACC & Fin, ACCA(UK) Level II Assistant Professor of Business Email: mbukeya@auaf.edu.af or mosesbukenya@yahoo.com

Moses Bukenya

Define Managerial Accounting

Managerial accounting is the process of Identifying Measuring Analyzing Interpreting Communicating information

Managing Resources, Activities, and People

An organization . . .


Acquires Resources

Organized set of activities

Decision Making



Hires People

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.

The Balanced Scorecard

How do we look to owners?

Financial Perspective Goals Measures

In which activities must we excel?

Customer Perspective Goals Measures

How do customers see us?

Operations Perspective Goals Measures

Innovation Perspective Goals Measures

How can we continue to improve?

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. Internal Users Financial Accounting Published financial statements and other financial reports.

External Users

Managerial versus Financial Accounting

Financial Accounting Interested parties, outside the organization. Required and must conform to generally accepted accounting principles. Regulated by the Financial Accounting Standards Board, and, to a lesser degree, the Securities and Exchange Commission. Source of Data The organization's basic accounting system, plus Almost exclusively drawn from the organization's various other sources, such as rates of effective basic accounting system, which accumulates products manufactured, physical quantities of financial information. material and labor used in production, occupancy rates in hotels and hospitals, and average take-off delays in airlines. Nature of Reports and Reports often focus on subunits within the Reports focus on the enterprise in its entirety. Procedures organization, such as departments, divisions, Based almost exclusively on historical transaction geographical regions, or product lines. Based on a data. combination of historical data, estimates, and projections of future events. Managerial Accounting Users of Information Managers, within the organization. Regulation Not required and unregulated, since it is intended only for management.

Managerial versus Financial Accounting

Managerial Accounting Financial Accounting Audit Not subjected to This must be subjected both requirements audit. to external and internal Level of Highly detailed. audits. Highly aggregated or details summarized. Measures Also users non- Exclusively in monetary financial terms (Financial measures) measures.

Standardizati No standard Has standard formats of on formats. presentation.

Line and Staff Positions

A line position is directly involved in achieving the basic objectives of an organization.
Example: A production supervisor in a manufacturing plant.

A staff position supports and assists line positions.

Example: A cost accountant in the manufacturing plant.

The chief managerial and financial accountant is responsible for: Supervising accounting personnel Preparation of information and reports, managerial and financial Analysis of accounting information Planning and decision making

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

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.

Major Themes in Managerial Accounting

Behavioral Issues Costs and Benefits

Information and Incentives

Evolution and Adaptation

Managerial Accounting

Evolution and Adaptation in Managerial Accounting

E-Business Service vs. Manufacturing Firms Product Life Cycles Time-Based Competition

Emergence of New Industries

Global Competition


Information and Communication Technology

Just-in-Time Inventory
Total Quality Management Continuous Improvement

Focus on the Customer Cross-Functional Teams

Cost Management Systems

Measure the cost of resources consumed. Identify and eliminate nonvalue-added costs. Determine efficiency and effectiveness of major activities. Identify and evaluate new activities that can improve performance.

Cost Management System

Strategic Cost Management and the Value Chain

Product Design Production Research and Development Securing raw materials and other resources Marketing Distribution Customer Service


Theory of Constraints
A sequential process of identifying and removing constraints in a system. Restrictions or barriers that impede progress toward an objective

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

Ethical Climate of Business

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

Professional Ethics



End of Chapter 1