acctba3 - chapter 1

7/18/2019 Acctba3 - Chapter 1

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2010 The McGraw-Hill Companies, Inc.

Managerial Accounting and the

Business EnvironmentChapter 1


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McGraw-Hill/Irwin Slide 2


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Internet Usage

The Internet fuels globalization

by providing companies ith greater

access to geographically dispersedcustomers! employees! and suppliers"

The Internet fuels globalization

by providing companies ith greater

access to geographically dispersedcustomers! employees! and suppliers"

As of #$$%! more than &%' of

the orld(s population as still

not connected to the Internet"

As of #$$%! more than &%' of

the orld(s population as still

not connected to the Internet"


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)trategy

A strategyis a *game plan+

that enables a company

to attract customersby distinguishing itselffrom competitors"

The focal point of a

company,s strategy should

be its target customers"

The focal point of a

company,s strategy should

be its target customers"


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Customer -alue .ropositions

Understand and respond to

individual customer needs"

Understand and respond to

individual customer needs"

CustomerIntimacy

)trategy

/perational

E0cellence

)trategy

eliver products and services

faster! more conveniently!

and at loer prices"

eliver products and services

faster! more conveniently!

and at loer prices"

.roduct

2eadership

)trategy/ffer higher 3uality products"

/ffer higher 3uality products"


7/40McGraw-Hill/Irwin Slide 7

2earning /b4ective 1

Understand the role ofUnderstand the role of

management accountantsmanagement accountants

in an organization"in an organization"



C o r p o r a t e O r g a n i z a t i o n C h a r t

P u r c h a s i n g P e r s o n n e l V i c e P r e s i d e n t

O p e r a t i o n s

T r e a s u r e r C o n t r o l l e r

C h i e f F i n a n c i a l

O f f i c e r

P r e s i d e n t

B o a r d o f D i r e c t o r s

/rganizational )tructure

Decentralization is the delegation of decision-Decentralization is the delegation of decision-

making authority throughout an organization.making authority throughout an organization.Decentralization is the delegation of decision-Decentralization is the delegation of decision-

making authority throughout an organization.making authority throughout an organization.



2ine and )taff 5elationships

2ine positions are directlyrelated to achievement ofthe basic ob4ectives of anorganization"

!ample" Productionsuper#isors in amanufacturing plant.

)taff positions supportand assist line positions"

!ample" Costaccountants in themanufacturing plant.



The Chief 6inancial /fficer 7C6/8

A member of the top management team

responsible for9 .roviding timely and relevant data to support planning

and control activities" .reparing financial statements for e0ternal users"

A member of the top management team

responsible for9 .roviding timely and relevant data to support planning

and control activities" .reparing financial statements for e0ternal users"



2earning /b4ective #

Understand the basicUnderstand the basic

concepts underlying 2eanconcepts underlying 2ean

.roduction! the Theory of.roduction! the Theory of

Constraints! and )i0Constraints! and )i0

)igma")igma"



.rocess Management

Business functions making up the #alue chainBusiness functions making up the #alue chain

.roduct Customer5: esign Manufacturing Mar;eting istribution )ervice

A businessprocess is a series of

steps that are folloed in order to

carry out some tas; ina business"



.rocess Management

There are three approaches toimproving business processes " " "

$ean

Production

Theory of

Constraints %TOC&

'i!

'igma



Traditional *.ush+ Manufacturing Company

6orecast )ales /rder components

.roduce goods in

anticipation of )ales

Ma;e )ales from

6inished



Traditional *push+manufacturing

Traditional *.ush+ Manufacturing Company

2argeinventories

6inished

goods

5a

materials

=or; in

process

(aterials )aitingto *e processed.(aterials )aitingto *e processed.

Completed productsa)aiting sale.

Completed productsa)aiting sale.

Partially completed productsre+uiring more )ork *efore

they are ready for sale.

Partially completed productsre+uiring more )ork *efore

they are ready for sale.



2ean .roduction

The lean thin;ing

model is a five

step approach"

The lean thin;ing

model is a five

step approach"

Identify valuein specific

products>services"

Identify value

in specific

products>services"

Identify thebusiness process

that delivers value"

Identify the

business process

that delivers value"

/rganize or;

arrangements around

the flo of the

business process"

/rganize or;

arrangements around

the flo of the

business process"

Create a pull

system that responds

to customer orders"

Create a pull

system that responds

to customer orders"

Continuously pursue

perfection in the

business process"

Continuously pursue

perfection in the

business process"



Customer places

an order

Create .roduction

/rder



2ean .roduction

2ean thin;ing can be used to improve business

processes that lin; companies together"

The term supply chain managementrefers to the

coordination of business processes across

companies to better serve end consumers"



A constraint7also called a bottlenec;8 is anything thatprevents you from getting more of hat you ant"

The Theory of Constraints is based on the observation thateffectively managing the constraint is the ;ey to success"

The constraint in a system is determinedThe constraint in a system is determined

by the step that has theby the step that has thesmallestsmallest capacity"

Theory of Constraints



,. ecognize that

the )eakest link

is no longer so.

,. ecognize that

the )eakest link

is no longer so.

. /dentify the

)eakest link.

. /dentify the

)eakest link.

0. 1llo) the)eakest link to

set the tempo.

0. 1llo) the)eakest link to

set the tempo.

2. Focus on

impro#ing

the )eakest

link.

2. Focus on

impro#ing

the )eakest

link.

Only actionsthat strengthen

the )eakest link

in the 3chain4

impro#e the

process.

Theory of Constraints



)i0 )igma

A process improvement method relying on customerfeedbac; and fact?based data gathering and analysis

techni3ues to drive process improvement"

A process improvement method relying on customerfeedbac; and fact?based data gathering and analysis

techni3ues to drive process improvement"

5efers to a process thatgenerates no more

than @" defects per million

opportunities"

5efers to a process thatgenerates no more

than @" defects per million

opportunities"

)ometimesassociated

ith the term zero

defects"

)ometimesassociated

ith the term zero

defects"



)i0 )igma



2earning /b4ective @

Understand theUnderstand the

importance of upholdingimportance of upholding

ethical standards"ethical standards"


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Code of Conduct for ManagementAccountants

The Institute of Management Accountant,s 7IMA8

)tatement of Ethical .rofessional .ractice

consists of to parts that offer guidelines for9 Ethical behavior"

5esolution for an ethical conflict"

The Institute of Management Accountant,s 7IMA8

)tatement of Ethical .rofessional .ractice

consists of to parts that offer guidelines for9 Ethical behavior"

5esolution for an ethical conflict"


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CompetenceCompetenceFollo) applica*le

la)s5 regulations

and standards.

Follo) applica*le

la)s5 regulations

and standards.

(aintain

professional

competence.

(aintain

professional

competence.

Pro#ide accurate5 clear5

concise5 and timely decision

support information.

Pro#ide accurate5 clear5

concise5 and timely decision

support information.

IMA


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ConfidentialityConfidentiality

Do not disclose confidentialDo not disclose confidential

information unless legallyinformation unless legally

o*ligated to do so.o*ligated to do so.

Do not disclose confidentialDo not disclose confidential

information unless legallyinformation unless legally

o*ligated to do so.o*ligated to do so.

nsure that su*ordinates donsure that su*ordinates do

not disclose confidentialnot disclose confidential

information.information.

nsure that su*ordinates donsure that su*ordinates do

not disclose confidentialnot disclose confidential

information.information.

Do not useDo not useconfidentialconfidential

information forinformation for

unethical or illegalunethical or illegal

ad#antage.ad#antage.

Do not useDo not useconfidentialconfidential

information forinformation for

unethical or illegalunethical or illegal

ad#antage.ad#antage.

IMA


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(itigate conflicts of

interest and ad#ise others

of potential conflicts.

(itigate conflicts of

interest and ad#ise others

of potential conflicts.

1*stain from acti#ities that

might discredit the

profession.

1*stain from acti#ities that

might discredit the

profession.

efrain fromconduct that

)ould pre6udice

carrying out

duties ethically.

efrain fromconduct that

)ould pre6udice

carrying out

duties ethically.

/ntegrity/ntegrity

IMA


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Communicate informationfairly and o*6ecti#ely.

Communicate informationfairly and o*6ecti#ely.

Disclose all rele#antinformation that could

influence a user7s

understanding of reports

and recommendations.

Disclose all rele#ant

information that could

influence a user7s

understanding of reports

and recommendations.

Credi*ilityCredi*ility

IMA


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Follo) employer7s esta*lished policies.For an unresol#ed ethical conflict"

iscuss the conflict ith immediate supervisor orne0t highest uninvolved manager"

If immediate supervisor is the CE/! consider theboard of directors or the audit committee"

Contact ith levels above the immediate supervisorshould only be initiated ith the supervisor,s

;noledge! assuming the supervisor is not involved"

Follo) employer7s esta*lished policies.

For an unresol#ed ethical conflict"

iscuss the conflict ith immediate supervisor orne0t highest uninvolved manager"

If immediate supervisor is the CE/! consider theboard of directors or the audit committee"

Contact ith levels above the immediate supervisorshould only be initiated ith the supervisor,s

;noledge! assuming the supervisor is not involved"

IMA


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Follo) employer7s esta*lished policies.

For an unresol#ed ethical conflict"

E0cept here legally prescribed! maintainconfidentiality"

Clarify issues in a confidential discussion ith anob4ective advisor"

Consult an attorney as to legal obligations"

Follo) employer7s esta*lished policies.For an unresol#ed ethical conflict"

E0cept here legally prescribed! maintainconfidentiality"

Clarify issues in a confidential discussion ith anob4ective advisor"

Consult an attorney as to legal obligations"

IMA


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Abandoning ethical standards in business ould

lead to a loer 3uality of life ith less

desirable goods and services at higher prices"

=hy ave Ethical )tandards

=ithout ethical standards in business! the

economy! and all of us ho depend on it for

4obs! goods! and services! ould suffer"

Ethical standards in business are essential for a

smooth functioning economy"

Ethical standards in business are essential for a

smooth functioning economy"


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Company Codes of Conduct

EmployeesEmployees CustomersCustomers )uppliers)uppliers

And to the communities in

hich the company operates"

And to the communities in

hich the company operates"

Broad?based statements of aBroad?based statements of a

company,s responsibilities to9company,s responsibilities to9

Broad?based statements of aBroad?based statements of a

company,s responsibilities to9company,s responsibilities to9


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Codes of Conduct on the International 2evel

In addition to integrity and ob4ectivity! resolution of ethicalconflicts! competence! and confidentiality! the I6AC,s code

deals ith the accountant,s ethical responsibilities in9

Ta0es!

Independence!

6ees and commissions!

Advertising and solicitation!

andling of monies! and

Cross?border activities"

In addition to integrity and ob4ectivity! resolution of ethicalconflicts! competence! and confidentiality! the I6AC,s code

deals ith the accountant,s ethical responsibilities in9

Ta0es!

Independence!

6ees and commissions!

Advertising and solicitation!

andling of monies! and

Cross?border activities"

The Code of Ethics for .rofessional

Accountants! issued by the International6ederation of Accountants 7I6AC8! governs the

activities of professional accountants orldide"

The Code of Ethics for .rofessional

Accountants! issued by the International6ederation of Accountants 7I6AC8! governs the

activities of professional accountants orldide"


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Corporate


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Enterprise 5is; Management

A process usedA process used

by a company toby a company to

proactively identifyproactively identifyand manage ris;"and manage ris;"

/nce a company identifies its ris;s! perhaps the

most common ris; management tactic is to reduce

ris;s by implementing specific controls"

/nce a company identifies its ris;s! perhaps the

most common ris; management tactic is to reduce

ris;s by implementing specific controls"

)hould I try to avoid the ris;!share the ris;! accept the

ris;! or reduce the ris;


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Enterprise 5is; Management


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Corporate )ocial 5esponsibility

C)5 e0tends beyond legal compliance

to include voluntary actions that satisfy

sta;eholder e0pectations"

C)5 e0tends beyond legal compliance

to include voluntary actions that satisfy

sta;eholder e0pectations"

Corporate social responsibility 7C)58 is a concepthereby organizations consider the needs

of all sta;eholders hen ma;ing decisions"

Corporate social responsibility 7C)58 is a concepthereby organizations consider the needs

of all sta;eholders hen ma;ing decisions"

Customers Employees Communities)uppliers )toc;holders

Environmental

: uman 5ights

Advocates


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Corporate )ocial 5esponsibility


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Certified Management Accountant

1 management accountant

)ho has the necessary +ualifications and

)ho passes a rigorous professional e!am earns

the right to *e kno)n as a Certified(anagement 1ccountant %C(1&.

1 management accountant

)ho has the necessary +ualifications and

)ho passes a rigorous professional e!am earns

the right to *e kno)n as a Certified(anagement 1ccountant %C(1&.

Information about becoming a CMA and the CMAInformation about becoming a CMA and the CMA

program can be accessed on the IMA,s ebsite atprogram can be accessed on the IMA,s ebsite at

"imanet"org"imanet"orgor by calling 1?%$$?D@%?#&"or by calling 1?%$$?D@%?#&"

Information about becoming a CMA and the CMAInformation about becoming a CMA and the CMA

program can be accessed on the IMA,s ebsite atprogram can be accessed on the IMA,s ebsite at

"imanet"org"imanet"orgor by calling 1?%$$?D@%?#&"or by calling 1?%$$?D@%?#&"
http://www.imanet.org/http://www.imanet.org/http://www.imanet.org/http://www.imanet.org/http://www.imanet.org/http://www.imanet.org/


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End of Chapter 1

acctba3 - chapter 1

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