Test 1 ACCT
Who uses information from an accounting system?
internal managers and external parties use accounting information. a) internal reporting is used by managers for planning and controlling operations, special decision making, and long range planning. b) external reporting is used by stockholders, investors, taxing authorities, govt regulators, and other interested parties.
The emphasis of financial accounting and management accounting differ- explain.
the emphasis of financial accounting has traditionally been on historical data presented in the external reports. Management accounting is more future-oriented and emphasizes planning, control, and decision-making.
Is less sharply defined. There is a heavier use of economics, decision sciences, and and behavioral sciences.
is the recording (including accumulation and classification of data) for later evaluation of performance
is the reporting and interpretation of information for the purpose of focusing on inefficiencies of operation, opportunities for improvement, and imperfections and operation problems.
is analysis of alternative course of action to evaluate the best course of action.
Does GAAP assist in development of management accounting systems?
NO. GAAp applies to financial reporting for external users. Internal accounting reports are not restricted by GAAP
Does the foreign corrupt practices act apply to bribes paid outside the united states?
Yes, though the act covers more than foreign brides. The Foreign Corrupt Practices Act applies to all publicly held companies and covers the quality of internal accounting control and other matters as well as bribes
why is sarbnes oxley act controversial?
Many managers believe the costs of applying the sarbanes oxley act are greater than the benefits. esp true about mandated auditing of companies internal control systems
Give 3 examples of service organizations. What distinguishes service organizations from other organizations?
Public accounting firms, law firms, management consultants, real estate firms, transportation companies, banks, insurance companies, and hotels are examples of service organizations. Service organizations tend to be labor intensive, have outputs that are difficult to define and measure, and have both inputs and outputs that are difficult or impossible to store.
What two major considerations affect the design of all accounting systems? explain each
two considerations are cost-benefit balance and behavioral effects. Cost benefit balance refers to how well an accounting system helps achieve managements goals in relation to the cost of the system. The behavioral- effects consideration specifies that an accounting system should be judged by how it will affect the behavior (that is, decision of managers)
is a quantitative expressions of a plan of action
compares actual results with the results of the budget
measures difference between actual results and budget
management by exception
management directs more attention to those areas that seem to be more out of control and less to those areas that seem to function as planned. Helps managers to decide where to put effort efficiently.
Why are accountants concerned with products life cycle?
information that is relevant for decisions about a product depends on the products life cycle stage. Therefore, to prepare and interpret information, accountants should be aware about the current stage of a products life cycle.
Name six primary business functions (excluding support functions) that make up the value chain. explain each
1) research and development – generation and experimentation with new ideas for products, services, or processes. 2)Product, service, and process design – detailed design and engineering of products, services, or processes. 3) Production – use of resources to produce a product or service. 4) Marketing – informing customers of the value and features of products and services. 5) Distribution – delivering products or services to customers. 6) Customer service – support provided to customers after a sale.
directly responsible for the production and sales of goods or services.
have an advisory function – they support line managers
What are some of the changes for flatter organizations management roles?
management accountats are the information specialists. In non-heirarchal companies, they are more directly involved with managers and are often parts of crossfunctional teams
Does every company have both treasurer and controller?
Treasurer is concerned with companys financial matters, the controller with operating matters. In large org, enough seperate duties to have both. In small org, typically done by one person.
describe the two parts of the qualifying examination for becoming CPA
1) financial planning , performance, and control. 2) Financial decision making
How are changes in technology affecting management accounting?
changes in tech are affecting mang acct by making accountants responsible for using computer systems and integrate their acct systems into ERP systems, and use XRBL to communicate information electronically.
What is the essence of the JIT philosophy?
Essence of JUST IN TIME philosophy is the elimination of waste, accomplished by reducing the time products spend in the production process and trying to eliminate the time spent in activities that do not add value to the product
4 Standard of ethical conduct for management accountants
1) competence – develop knowledge and obey laws, regulations, and technical standards; and perform appropriate analyses. 2) confidentiality – refrain from disclosing or using confidential info. 3) Integrity – avoid conflicts of interest, refuse gifts that might influence actions, recognize limitations and avoid activities that might discredit the profession. 4) credibility – communicate information fairly, objectively, and within confidentialy constraints