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Brewer/Garrison/Noreen

Brewer/Garrison/Noreen. Introduction to Managerial Accounting. Second Edition. Prologue. Managerial Accounting and the Business Environment. The Changing Business Environment. A more competitive environment emphasizing: Global competition Lower prices and costs

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Brewer/Garrison/Noreen

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  1. Brewer/Garrison/Noreen Introduction to Managerial Accounting Second Edition

  2. Prologue Managerial Accounting and the Business Environment

  3. The Changing Business Environment • A more competitive environment emphasizing: • Global competition • Lower prices and costs • Higher quality products • More product choices Business environment changes in the past twenty years

  4. New tools for managers! The Changing Business Environment • Just-In-Time • Total Quality Management • Process Reengineering • Theory of Constraints

  5. Complete productsjust in time toship customers. Scheduleproduction. Receive materialsjust in time forproduction. Complete partsjust in time forassembly into products. Just-in-Time (JIT) Systems Receivecustomerorders.

  6. Just-in-Time (JIT) Reducedinventorycosts Greatercustomersatisfaction Higher quality products Less warehousespace needed More rapidresponse tocustomer orders Zero defects

  7. Total Quality Management (TQM) Where are we? Where do we want to go? Benchmarking Plan Do we need to change the plan? How do we start? Act Do is ContinuousImprovement Check How are we doing?

  8. Every step inthe businessprocess mustbe justified. • The process isredesigned to includeonly those steps that makeour product more valuable. Process Reengineering • A business processis diagrammedin detail.

  9. Every step inthe businessprocess mustbe justified. • The process isredesigned to includeonly those steps that makeour product more valuable. Process Reengineering • A business processis diagrammedin detail. • Anticipated results: • Process is simplified. • Process is completed in less time. • Costs are reduced. • Opportunities for errors are reduced.

  10. Restrictions or barriers that impedeprogress toward an objective Theory of Constraints (TOC) A sequential process of identifying and removing constraintsin a system.

  11. International Competition Meeting world-class competition demands a world-class management accounting system.

  12. Organizational Structure An organization is a group of peopleunited for a common purpose.

  13. Decentralization Delegation of decision-making authority throughout an organization. Decentralizationdecision–making Decentralizationdecision–making

  14. Line positions are directly related to achievement of the basic objectives of an organization. Example: Production supervisors in a manufacturing plant. Staff positions support and assist line positions. Example: Cost accountants in the manufacturing plant. Line and Staff Relationships

  15. The Chief Financial Officer (CFO) The CFO is: • A member of top management. • Responsible for providing timely and relevant data for planning and control activities. • Responsible for external financial reporting.

  16. Professional Ethics • Ethical practices in business build trust and promote productive relationships. They are necessary for the functioning of a market economy. • Many companies and professional organizations, such as the Instituteof Management Accountants (IMA),have written codes of ethics whichserve as guidelines for employees.

  17. IMA’s Standard of Ethical Conduct Competence Confidentiality Integrity Objectivity Resolution of Ethical Conflict

  18. Follow applicable laws, regulations and standards. Maintain professional competence. Prepare complete and clear reports after appropriate analysis. IMA’s Standard of Ethical Conduct Competence

  19. Do not disclose confidential information unless legally obligated to do so. Do not use confidential information for personal advantage. Ensure that subordinates do not disclose confidential information. IMA’s Standard of Ethical Conduct Confidentiality

  20. Avoid activities that could affect your ability to perform duties. Refrain from activities that could discredit the profession. Avoid conflicts of interest and advise others of potential conflicts. Do not subvert organization’s legitimate objectives. Refuse gifts or favors that might influence behavior. Integrity Communicate unfavorable as well as favorable information. Recognize and communicate personal and professional limitations. IMA’s Standard of Ethical Conduct

  21. Communicate information fairly and objectively. Objectivity Disclose all information that might be useful to management. IMA’s Standard of Ethical Conduct

  22. IMA’s Standard of Ethical Conduct Resolution of Ethical Conflict • Follow established policies. • For unresolved ethical conflicts: • Discuss the conflict with immediate superior. • If immediate superior is the CEO, consider the board of directors or the audit committee. • Except where legally prescribed, maintain confidentiality.

  23. IMA’s Standard of Ethical Conduct Resolution of Ethical Conflict • Clarify issues in a confidential discussion withan objective advisor. • Consult an attorney as to legal obligations. • The last resort is to resign.

  24. Company Many companies have adopted formal ethics codes of conducts that provide broad guidelines for proper behavior. International The International Federation of Accountants’ (IFAC) Guidelines on Ethics for Professional Accountants governs the activities of all accountants throughout the world. Other Codes of Conduct

  25. Certified Management Accountant (CMA) Rigorous ProfessionalExam Greater Responsibilities Higher Compensation

  26. End of Prologue

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