Chapter 1 Managerial Accounting the Business Environment Managerial

Chapter 1 Managerial Accounting & the Business Environment

Managerial Accounting and Financial Accounting Managerial accounting provides information for managers inside an organization who direct and control its operations. Mc. Graw-Hill/Irwin Financial accounting provides information to stockholders, creditors and others who are outside the organization. © The Mc. Graw-Hill Companies, Inc. , 2003

Differences Between Financial and Managerial Accounting Mc. Graw-Hill/Irwin © The Mc. Graw-Hill Companies, Inc. , 2003

The Changing Business Environment Growth of the internet Just-in-Time production Total Quality Management International competition Mc. Graw-Hill/Irwin Business environment changes in the past twenty years © The Mc. Graw-Hill Companies, Inc. , 2003

The Changing Business Environment New tools for managers! Just-In-Time Total Quality Management Process Reengineering Theory of Constraints Mc. Graw-Hill/Irwin © The Mc. Graw-Hill Companies, Inc. , 2003

Expanding Role of Managerial Accounting Increasing complexity and size of organizations Regulatory environment World-wide competition Factors that increase the need for managerial accounting information Increased emphasis on quality Rapid development and implementation of technology Mc. Graw-Hill/Irwin © The Mc. Graw-Hill Companies, Inc. , 2003

Importance of Ethics in Accounting Ethical accounting practices build trust and promote loyal, productive relationships with users of accounting information. Many companies and professional organizations, such as the Institute of Management Accountants (IMA), have written codes of ethics which serve as guides for employees. l Code of Conduct for Management Accountants Mc. Graw-Hill/Irwin © The Mc. Graw-Hill Companies, Inc. , 2003

IMA Code of Ethics for Management Accountants Four broad areas of responsibility: Maintain a high level of professional competence treat sensitive matters with confidentiality Maintain personal integrity Be objective in all disclosures Mc. Graw-Hill/Irwin © The Mc. Graw-Hill Companies, Inc. , 2003

CAREER OPPORTUNITIES IN MANAGEMENT ACCOUNTING Over 2/3’s of all professional accountants work as Management Accountants. Management Accounting has become a route to the top! Leadership + Accounting Credential = Potential for Success!!! Mc. Graw-Hill/Irwin © The Mc. Graw-Hill Companies, Inc. , 2003

The SRC Story Formerly International Harvestor Jack Stack. 98. 9% financed at 22%. The “Game of Business” Philosophy. Mc. Graw-Hill/Irwin © The Mc. Graw-Hill Companies, Inc. , 2003