Accounting 2 study guide

Accounting 2 study guide - What are managers 4 primary...

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What are managers 4 primary responsibilities? Financial accounting focuses on providing stockholders and creditors with info. Financial statements, uses info from past, data reliable Managerial accounting focuses on providing internal management with info. To run company, focuses on future, helps fulfill responsibilities, data relevant 1. Planning – setting goals for company and determining how to achieve them. Translate plans into budgets (expansion plans) 2. Directing – overseeing day-to-day operations, uses product cost reports, sales info to run daily business operations (adjust menus and marketing strategies) 3. Controlling – evaluating results of business operations and make adjustment to plans to keep company on track to achieve goals, uses performance reports to compare against budget and uses to feedback 4. Making Decisions – continuously doing this when plan, direct, and control operation How do management accountants fit into the company’s organizational structure? Board of Directors – elected by stockholders to oversee the company, non employee (meets only periodically) Chief executive officer (CEO) – hired by board to manage company on a daily basis Chief Operating officer (COO) – hired by CEO for company operations like R&D, production, and distribution Chief Financial officer (CFO) – hired by CEO handles financial concerns - Treasurer – report to CFO, responsible for raising capital (thru stocks and bonds) and investing funds - Controller – report to CFO, responsible for general financial accounting, managerial accounting, and tax reporting Internal Audit function – required by NYSE to ensure company’s internal controls and risk management policies are functioning properly reports to senior exec for admin matter and to subcommittee of board of directors called Audit Committee (also oversees financial statements by independent CPAs, so that management will not bias their work) Management accountants used to work for controller but now located throughout, cross-functional teams, they act as internal consultants or business advisors. They need to have theses skills: knowledge of financial and managerial accounting, analytical skills, business knowledge, ability to work on a team, oral and written communication knowledge What are the ethical standards for managerial accountants? Institute of Management Accountants (IMA) – professional association for management accountants to advance profession through certification, practice development, education, and networking. Publishes monthly general, Strategic Finance.
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