Managerial Accounting 2
The Manager and Management Accounting
BUSI 0028
Sem 2, 2012/13
Dr. Olivia Leung
© 2012 Pearson Education. All rights reserved.
Accounting Discipline Overview
Managerial accounting—measures, analyzes, and
reports financial and nonfinancial information to help managers make decisions to fulfill organizational goals. Managerial accounting need not be GAAP compliant. Financial accounting—focus on reporting to external
users including investors, creditors, and governmental agencies. Financial statements must be based on
GAAP.
© 2012 Pearson Education. All rights reserved.
2
Major Differences Between
Financial and Managerial Accounting
Managerial Accounting
Financial Accounting
Purpose
Decision making
Communicate financial position to outsiders
Primary Users
Internal managers
External users
Future‐oriented
Past‐oriented
Do not have to follow GAAP; cost vs. benefit
GAAP compliant;
CPA audited
Time Span
Ultra current to very long time horizons
Historical monthly, quarterly reports
Behavioral
Issues
Designed to influence employee behavior
Indirect effects on employee behavior
Focus/Emphasis
Rules
© 2012 Pearson Education. All rights reserved.
3
Strategy and Management Accounting
Strategy—specifies how an organization matches its
own capabilities with the opportunities in the marketplace to accomplish its objectives
Strategic cost management—the approaches and
activities of manages to use resources to increase value to customers and to achieve organizational goals generated from the organization’s strategies.
© 2012 Pearson Education. All rights reserved.
4
Strategy and Management Accounting
Management accounting helps answer important
questions such as:
Who are our most important customers, and how do we
deliver value to them?
What substitute products exist in the marketplace, and how do they differ from
BUSI 0028
Sem 2, 2012/13
Dr. Olivia Leung
© 2012 Pearson Education. All rights reserved.
Accounting Discipline Overview
Managerial accounting—measures, analyzes, and
reports financial and nonfinancial information to help managers make decisions to fulfill organizational goals. Managerial accounting need not be GAAP compliant. Financial accounting—focus on reporting to external
users including investors, creditors, and governmental agencies. Financial statements must be based on
GAAP.
© 2012 Pearson Education. All rights reserved.
2
Major Differences Between
Financial and Managerial Accounting
Managerial Accounting
Financial Accounting
Purpose
Decision making
Communicate financial position to outsiders
Primary Users
Internal managers
External users
Future‐oriented
Past‐oriented
Do not have to follow GAAP; cost vs. benefit
GAAP compliant;
CPA audited
Time Span
Ultra current to very long time horizons
Historical monthly, quarterly reports
Behavioral
Issues
Designed to influence employee behavior
Indirect effects on employee behavior
Focus/Emphasis
Rules
© 2012 Pearson Education. All rights reserved.
3
Strategy and Management Accounting
Strategy—specifies how an organization matches its
own capabilities with the opportunities in the marketplace to accomplish its objectives
Strategic cost management—the approaches and
activities of manages to use resources to increase value to customers and to achieve organizational goals generated from the organization’s strategies.
© 2012 Pearson Education. All rights reserved.
4
Strategy and Management Accounting
Management accounting helps answer important
questions such as:
Who are our most important customers, and how do we
deliver value to them?
What substitute products exist in the marketplace, and how do they differ from