Managerial Accounting Overview - Arts

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(Hilton, 2001). ▫ What is a key characteristic of management accounting information established by this definition? ▫ Is the emphasis on financial or non-.
Chapter 1: Objectives „ „

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Definition of management accounting Uses of management accounting information Management accounting & ethics

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Management Accounting „

“the process of identifying, measuring, analyzing, interpreting, and communicating information in pursuit of an organization’s goals.” (Hilton, 2001) „

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What is a key characteristic of management accounting information established by this definition? Is the emphasis on financial or nonfinancial information? Is the emphasis on objective or subjective information?

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Uses of management accounting information „

Road Riders Limited is considering

the addition of a triathlon bike to their extensive line of road bicycles. Assuming that the bike has already been designed, what management accounting information should management seek to help them plan whether or not to produce and sell the bike? 3

Uses of management accounting information „

Assume Road Riders Limited has introduced the new triathlon bike. What management accounting information should managers have to help them direct the activities for this line of business on a day-to-day basis?

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Uses of management accounting information „

How would you motivate the product manager responsible for the triathlon bike to achieve the organization’s goals of profitability, high quality and customer satisfaction?

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Management Accounting & Ethics „

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Suppose part of your responsibilities at Road Riders Limited is to prepare the annual expense budget for the accounting department. Your boss insists that you submit a budget showing expenses you know are much higher than the actual amounts will be. He says “we’ll all look good when we come in under budget and we’ll be sure to get our performance bonuses.” Is your boss behaving ethically? What are the consequences for the organization if you do what you are told? 6

What’s the Big Picture? „

Financial Accounting: „

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Auditing: „

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Record transactions, summarize, report via F/S & notes (GAAP) Understand client, assess risk, audit procedures, audit report (GAAS)

Tax: „

F/S net income, apply tax rules, compute taxes owing/refund (Tax Act) 7