ACT 5733 Advanced

Managerial Accounting

Chapter 1 Introduction
and Ethics

ACT 5733 - Chapter 1 - Felo

Session Outline
Course overview
Comparing financial & managerial
accounting
Four course themes
Managerial accounting guidelines
Professional ethics

ACT 5733 - Chapter 1 - Felo

Financial vs. Managerial
Required?
Purpose of information
Target audience
Rules of measurement and reporting
Report structure / frequency

ACT 5733 - Chapter 1 - Felo

Strategic Questions to Consider
Who are our most important customers?
How can we deliver value to customers?
What substitute products exist?
How do they differ from our offerings?
What is our most critical capability?
Will cash be available to fulfill goals?
Management accounting should provide
information to answer these questions

ACT 5733 - Chapter 1 - Felo

Value-Chain Analysis
Steps where customer value is added
R&D
Design
Production
Marketing and sales
Distribution
Customer service
Administration
Management accounting provides information
about each area

ACT 5733 - Chapter 1 - Felo

Supply-Chain Analysis
Focuses on production and distribution
Flow of goods, services, & information from
initial sources of materials & services to the
delivery of products and services to customers,
regardless of whether those activities occur
inside or outside the organization
Management accounting provides information
about strategies to add value across supply
chain

ACT 5733 - Chapter 1 - Felo

Key Success Factors
Are we on track to achieve our goals?
Cost and efficiency
Quality
Timeliness
Innovation
Sustainability
Focus depends on strategy of organization
Management accounting provides information
about these factors

ACT 5733 - Chapter 1 - Felo

Key MA Guidelines
Cost-benefit analysis

Behavioral & technical considerations

Different costs for different purposes

ACT 5733 - Chapter 1 - Felo

IMA Statement of Ethical
Professional Practice
Ethical principles

Ethical standards

Resolving ethical conflicts

ACT 5733 - Chapter 1 - Felo

IMA Ethical Principles
Overarching principles expressing values
and standards
Honesty
Fairness
Objectivity
Responsibility

ACT 5733 - Chapter 1 - Felo

IMA Ethical Standards
Competence
Confidentiality
Integrity
Credibility

ACT 5733 - Chapter 1 - Felo

Resolving Ethical Conflicts
Follow company policies
Discuss with immediate supervisor (unless
he/she is involved)
Follow chain of command up to BOD
Discuss with IMA Ethics Counselor or other
impartial observer
Consult attorney

ACT 5733 - Chapter 1 - Felo