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1 C 1 - MANAGERIAL ACCOUNTING AND THE BUSINESS ENVIRONMENT notes-c1.doc Written by Professor Gregory M. Burbage, MBA, CPA, CMA, CFM © CHAPTER LEARNING OBJECTIVES: MAJOR: - Complete knowledge of JIT, TQM, Process Reengineering & Theory of Constraints. - Terminology (ALL CHAPTERS!) MINOR: - Identify and explain what managers do. - Explain basic differences between managerial and financial accounting. - Understand an organization chart. - Be familiar with a code of ethics. MANAGEMENT ACCOUNTING OVERVIEW MANAGERIAL VS. FINANCIAL ACCOUNTING FINANCIAL - information for outsiders (stockholders/creditors) and GAAP requirements must be followed. MANAGERIAL - information for insiders (management), therefore not bound by GAAP. MANAGERS - (1) plan, (2) direct & motivate and, (3) control. I.e., Plan, Do and Review. PLANNING - short and long-term goals are set and budgets are prepared. DIRECTING & MOTIVATING - assemble resources (human and other) and place them into service; then oversee activities, making decisions as necessary. I.e., the day-to-day activities of running the business. CONTROLLING - analyze feedback (reports and other information) to assess need for minor or major adjustments. Comparing the actual results with budgets. DIFFERENCES BETWEEN MANAGERIAL AND FINANCIAL ACCOUNTING: Managerial Financial User: internal external Emphasis: planning (future) reports (past) Data: relevant/flexible precise as possible Timing: speedy less speedy Segment: parts whole Basis: financial, economic, finance, financial (GAAP) human behavior, etc. Rules: form of info as needed GAAP I.e., no rules to follow Required: No Yes ORGANIZATIONAL STRUCTURE
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