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Managerial Accounting:

An Overview
Chapter 01

PowerPoint Authors:
Susan Coomer Galbreath, Ph.D., CPA
Charles W. Caldwell, D.B.A., CMA
Jon A. Booker, Ph.D., CPA, CIA
Cynthia J. Rooney, Ph.D., CPA
McGraw-Hill/Irwin

Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

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Financial and Managerial


Accounting: Seven Key Differences

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Work of Management
Planning
Planning

Controlling
Controlling
Decision
Decision
Making
Making

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Planning
Establish
Establish Goals.
Goals.

Specify
Specify How
How Goals
Goals
Will
Will Be
Be Achieved.
Achieved.

Develop
Develop Budgets.
Budgets.

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Controlling
The
The control
control function
function gathers
gathers feedback
feedback to
to
ensure
ensure that
that plans
plans are
are being
being followed.
followed.
Feedback
Feedback in
in the
the form
form of
of performance
performance reports
reports
that
that compare
compare actual
actual results
results with
with the
the budget
budget
are
are an
an essential
essential part
part of
of the
the control
control function.
function.

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Decision Making
Decision making
making involves
involves
making
making aa selection
selection among
competing
competing alternatives.
alternatives.
What
What should
should
we
we be
be selling?
selling?

Who
Who should
should
we
we be
be serving?
serving?

How
How should
should
we
we execute?
execute?

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Certified Management Accountant


A management
management accountant
accountant
who
who has
has the
the necessary qualifications
qualifications
and
and who
who passes a rigorous professional
exam
exam earns
earns the
the right
right to
to be
be known
known as
as aa
Certified
Certified Management
Management Accountant
Accountant
(CMA).
(CMA).

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Strategic Management Skills


A strategy
is a game plan
that enables a company
to attract customers
by distinguishing itself
from competitors.
The
The focal point
point of a
companys
companys strategy
strategy should
should
be its
its target
target customers.
customers.

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Enterprise Risk Management


A process used
by a company to
proactively identify
and manage risk.

Should I try to avoid the


risk, accept the risk, or
reduce the risk?

Once
Once aa company
company identifies
identifies its risks, perhaps
perhaps the
most
most common
common risk
risk management
management tactic
tactic is
is to reduce
reduce
risks
risks by
by implementing
implementing specific
specific controls.
controls.

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Process Management
A business
process is a series of
steps that are followed in order to
carry out some task in
a business.

R&D

Product
Design

Customer
Manufacturing Marketing Distribution Service

Business functions making up the value chain

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Lean Production

Customer places
an order

Create Production
Order

Generate component
requirements

Goods delivered
when needed

Production begins
as parts arrive

Components
are ordered

Lean Production is often called Just-In-Time (JIT) production.

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Theory of Constraints
A constraint (also called a bottleneck) is anything that
prevents you from getting more of what you want.
The Theory of Constraints (TOC) is based on the observation
that effectively managing the constraint is the key to success.

The constraint in a system is determined


by the step that has the smallest capacity.

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Measurement Skills
A good manager
compliments an
understanding of
strategy, risks, and
business processes with
data-driven analysis.
The key to effective analysis is to understand that
the question you are addressing defines what you
measure and how you analyze the data.

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Measurement Skills
The primary purpose
of this course is to
teach measurement
skills that managers
use to support
planning, controlling,
and decision making
activities.

Planning
Planning

Controlling
Controlling
Decision
Decision
Making
Making

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End of Chapter 01

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