Unit 15Introduction to ManageriaAccounting
Unit 15 Introduction to Managerial Accounting
Managerial Accounting is a field ofaccounting that provides economic andfinancial information for managers andotherinternalusers: A company may use it to analyze pastcontrol present, plan future and participatein decision-making for the purpose ofachieving the goal of profit maximizationbased on sound internal management2
2 • Managerial Accounting is a field of accounting that provides economic and financial information for managers and other internal users. • A company may use it to analyze past, control present, plan future and participate in decision-making for the purpose of achieving the goal of profit maximization based on sound internal management
I . Managerial Accounting vsFinancial Accounting. Similarity> Each field of accounting deals with the economicevents of an enterpriseFor example, cost.Unit cost of manufacturing aproduct;Total cost of goods manufacturedand sold> Both managerial accounting and financialaccounting require that the results of an entity'seconomic events should be quantified and becommunicated to interested parties3
3 • Similarity ➢ Each field of accounting deals with the economic events of an enterprise. For example, cost. Unit cost of manufacturing a product; Total cost of goods manufactured and sold ➢ Both managerial accounting and financial accounting require that the results of an entity’s economic events should be quantified and be communicated to interested parties. Ⅰ. Managerial Accounting vs Financial Accounting
I . Managerial Accounting vs FinancialAccountingFinancial AccountingManagerial AccountingMain usersExternal users, such asInternal users suchas managersstockholders,creditors,customers,and employees.and regulatoryagenciesPurposesGeneral informationforall usersSpecificallyforinternal decision-aboutthepasthistoricalmaking and forecasting,etc.transactionsPrincipleFollowing GAAPGobeyondGAAP and meetinternal needsInformationHighlycondensedinformation ofRelevantly accurate information.Timeliness, pertinence,companyas awholeapplicabilityarestressedFrequencyGenerally prepared regularly at theFrequentinternal reportsend of each accounting periodsuitablefor management needsAuditingIndependent audit byCPAInternalauditwithinthebusiness4
4 Ⅰ. Managerial Accounting vs Financial Accounting Financial Accounting Managerial Accounting Main users External users, such as stockholders, creditors, customers, and regulatory agencies Internal users such as managers and employees. Purposes General information for all users about the past historical transactions Specifically for internal decisionmaking and forecasting, etc. Principle Following GAAP Go beyond GAAP and meet internal needs Information Highly condensed information of company as a whole Relevantly accurate information. Timeliness, pertinence, applicability are stressed. Frequency Generally prepared regularly at the end of each accounting period Frequent internal reports suitable for management needs Auditing Independent audit by CPA Internal audit within the business
I. Managerial Accounting andDecision-makingManagement accountant has a widerange of responsibility involvingprofessional knowledge and skill in thepreparation and the presentation ofinformation to all levels of management inthe organization structure.5
5 Ⅱ. Managerial Accounting and Decision-making • Management accountant has a wide range of responsibility involving professional knowledge and skill in the preparation and the presentation of information to all levels of management in the organization structure
ManagementaccountingMonitoring&DirectingPlanningControllingCostingStrategyPositioningProductionSpecialBudgetinganalysis6
6 Management accounting Planning Directing Monitoring & Controlling Strategy Positioning Budgeting Costing Production Special analysis
1. PlanningPlanning requires management to look into the future toestablish objectivesPlanningStrategyPositioningBudgeting
7 1. Planning Planning Strategy Positioning Budgeting Planning requires management to look into the future to establish objectives
(1) StrategyAbusiness usually spends a great dealof management time and effort todevelop its strategy because of itsimportance.Specific strategy generally includedthree categories: mission, goal,objective. They are based on corePlanningvalue.PositioningBudgetingStrategy8
8 (1) Strategy • A business usually spends a great deal of management time and effort to develop its strategy because of its importance. • Specific strategy generally included three categories: mission, goal, objective. They are based on core value. Planning Strategy Positioning Budgeting
Mission: organization's purpose and direction. A mission isa very big, long-term end-result or achievement.: Goals: They are the ends toward which effort and actionare directed or coordinated.Objectives:Specific objectives make sure strategies areachieved guided and correctly. SMART RuleCore values: the key rules that the business will apply withinclude fair trade,ethics, customer service, employmentenvironmentalawareness,etc.MissionCoreCoreGoalvaluesvaluesObjective9
9 Mission Goal Objective Core values Core values • Mission: organization’s purpose and direction. A mission is a very big, long-term end-result or achievement. • Goals: They are the ends toward which effort and action are directed or coordinated. • Objectives: Specific objectives make sure strategies are achieved guided and correctly. SMART Rule • Core values: the key rules that the business will apply with include fair trade, ethics, customer service, employment, environmental awareness, etc
University of Washington School of Public Health(SPH)Mission:To promote population health, prevent illness, disability,andinjury,and ensure efficient, effective,and equitablehealth caresystems througheducation,research,and service.Goals:Educate innovative,effective,and culturallycompetentpublichealthresearchers,faculty,andpractitioners.Advanceknowledgeinthepublichealthsciencesthroughresearch and discovery.Contributeto soundpublichealthpoliciesandincreasetherecognitionofthe importance of public health throughdisseminationandcommunitycollaboration.10
10 University of Washington School of Public Health (SPH) • Mission: – To promote population health, prevent illness, disability, and injury, and ensure efficient, effective, and equitable health care systems through education, research, and service. • Goals: – Educate innovative, effective, and culturally competent public health researchers, faculty, and practitioners. – Advance knowledge in the public health sciences through research and discovery. – Contribute to sound public health policies and increase the recognition of the importance of public health through dissemination and community collaboration