Chapter 1: Introduction to
Managerial Accounting
Tags
1.1 - What is Managerial Accounting?
What is management accounting?
A profession that involves partnering in management decision making,
devising planning and performance management systems, and providing
expertise in financial reporting and control to assist management in the
formulation and implementation of an organization's strategy
Managers' Three Primary Responsibilities
What are managers' three primary responsibilities?
1. Planning
2. Directing
3. Controlling
What is decision making?
Identifying possible courses of action and choosing among them
What is planning?
One of management's primary responsibilities
Setting goals and objectives for the company and deciding how to achieve
them
What is a budget?
Quantitative expression of a plan that helps managers coordinate and
implement the plan
What is directing?
Chapter 1: Introduction to Managerial Accounting 1
, One of management's primary responsibilities
Running the company on a day-to-day basis
What is controlling?
One of management's primary responsibilities
Evaluating the results of business operations against the plan and making
adjustments to keep the company pressing toward its goals
1.2 - What Role Do Management Accountants Play?
The Role of Management Accountants
What do management accountants do?
Use an immense amount of critical thinking, insight, and judgment to
capture the reality of today's complex economic events
Accounting within the Organizational Structure
What is a board of directors?
the body elected by shareholders to oversee the company
What is a chief executive officer (CEO)?
The position hired by the board of directors to oversee the company on a
daily basis
What is a chief operating officer (COO)?
The position responsible for overseeing the company's operations
What is a chief financial officer (CFO)?
The position responsible for all of the company's financial concerns
What is a treasurer?
The position responsible for raising the firm's capital and investing funds
What is a controller?
Chapter 1: Introduction to Managerial Accounting 2
, The position responsible for general financial accounting, managerial
accounting, and tax reporting
What is an internal audit function?
The corporate function charged with assessing the effectiveness of the
company's internal controls and risk management policies
What is an audit committee?
A subcommittee of the board of directors that is responsible for
overseeing both the internal audit function and the annual financial
statement audit by independent CPAs
What is a cross-functional team?
Corporate teams whose members represent various functions of the
organization, such as R&D, design, production, marketing, distribution, and
customer service
Professional Associations
What is the Institute of Management Accountants (IMA)?
The professional organization that promotes the advancement of the
management accounting profession
What is a Certified Management Accountant (CMA)?
A professional certification issued by the IMA to designate expertise in the
areas of managerial accounting, economics, and business finance
What is the American Institute of Certified Public Accountants (AICPA)?
The world's largest association representing the accounting profession
Together with the Chartered Institute of Management Accountants,
offers the Chartered Global Management Accountant (CGMA)
designation
What is a Chartered Global Management Accountant (CGMA)?
A designation available to qualifying American Institute of Certified Public
Accountants (AICPA) members that is meant to recognize the unique
Chapter 1: Introduction to Managerial Accounting 3
, business and accounting skill set possessed by those CPAs who work, or
have worked, in business, industry, or government
Professional Ethics
What are the four main ethical standards required of management
accountants by the IMA?
1. Maintain their professional competence
2. Preserve the confidentiality of the information they handle
3. Uphold their integrity
4. Perform their duties with credibility
1.3 - What Business Trends and Regulations Affect
Management Accounting?
Big Data, Data Analytics, and Critical Thinking
What are enterprise resource planning (ERP) systems?
Software systems that can integrate all of a company's worldwide
functions, departments, and data into a single system
Critical Thinking
What is critical thinking?
Improving the quality of thought by skillfully analyzing, assessing, and
reconstructing it
What is cost-benefit analysis?
Weighing costs against benefits to help make decisions
Lean Thinking and Focus on Quality
What is lean thinking?
A philosophy and business strategy of operating without waste
What is Six Sigma?
Chapter 1: Introduction to Managerial Accounting 4
Managerial Accounting
Tags
1.1 - What is Managerial Accounting?
What is management accounting?
A profession that involves partnering in management decision making,
devising planning and performance management systems, and providing
expertise in financial reporting and control to assist management in the
formulation and implementation of an organization's strategy
Managers' Three Primary Responsibilities
What are managers' three primary responsibilities?
1. Planning
2. Directing
3. Controlling
What is decision making?
Identifying possible courses of action and choosing among them
What is planning?
One of management's primary responsibilities
Setting goals and objectives for the company and deciding how to achieve
them
What is a budget?
Quantitative expression of a plan that helps managers coordinate and
implement the plan
What is directing?
Chapter 1: Introduction to Managerial Accounting 1
, One of management's primary responsibilities
Running the company on a day-to-day basis
What is controlling?
One of management's primary responsibilities
Evaluating the results of business operations against the plan and making
adjustments to keep the company pressing toward its goals
1.2 - What Role Do Management Accountants Play?
The Role of Management Accountants
What do management accountants do?
Use an immense amount of critical thinking, insight, and judgment to
capture the reality of today's complex economic events
Accounting within the Organizational Structure
What is a board of directors?
the body elected by shareholders to oversee the company
What is a chief executive officer (CEO)?
The position hired by the board of directors to oversee the company on a
daily basis
What is a chief operating officer (COO)?
The position responsible for overseeing the company's operations
What is a chief financial officer (CFO)?
The position responsible for all of the company's financial concerns
What is a treasurer?
The position responsible for raising the firm's capital and investing funds
What is a controller?
Chapter 1: Introduction to Managerial Accounting 2
, The position responsible for general financial accounting, managerial
accounting, and tax reporting
What is an internal audit function?
The corporate function charged with assessing the effectiveness of the
company's internal controls and risk management policies
What is an audit committee?
A subcommittee of the board of directors that is responsible for
overseeing both the internal audit function and the annual financial
statement audit by independent CPAs
What is a cross-functional team?
Corporate teams whose members represent various functions of the
organization, such as R&D, design, production, marketing, distribution, and
customer service
Professional Associations
What is the Institute of Management Accountants (IMA)?
The professional organization that promotes the advancement of the
management accounting profession
What is a Certified Management Accountant (CMA)?
A professional certification issued by the IMA to designate expertise in the
areas of managerial accounting, economics, and business finance
What is the American Institute of Certified Public Accountants (AICPA)?
The world's largest association representing the accounting profession
Together with the Chartered Institute of Management Accountants,
offers the Chartered Global Management Accountant (CGMA)
designation
What is a Chartered Global Management Accountant (CGMA)?
A designation available to qualifying American Institute of Certified Public
Accountants (AICPA) members that is meant to recognize the unique
Chapter 1: Introduction to Managerial Accounting 3
, business and accounting skill set possessed by those CPAs who work, or
have worked, in business, industry, or government
Professional Ethics
What are the four main ethical standards required of management
accountants by the IMA?
1. Maintain their professional competence
2. Preserve the confidentiality of the information they handle
3. Uphold their integrity
4. Perform their duties with credibility
1.3 - What Business Trends and Regulations Affect
Management Accounting?
Big Data, Data Analytics, and Critical Thinking
What are enterprise resource planning (ERP) systems?
Software systems that can integrate all of a company's worldwide
functions, departments, and data into a single system
Critical Thinking
What is critical thinking?
Improving the quality of thought by skillfully analyzing, assessing, and
reconstructing it
What is cost-benefit analysis?
Weighing costs against benefits to help make decisions
Lean Thinking and Focus on Quality
What is lean thinking?
A philosophy and business strategy of operating without waste
What is Six Sigma?
Chapter 1: Introduction to Managerial Accounting 4
