CHAPTER 1
MANAGEMENT, THE
CONTROLLER, AND COST
ACCOUNTING
LEARNING OBJECTIVES
• Model the management process as three
interrelated activities: planning, organizing,
and control
• Identify and distinguish three kinds of plans:
short range, long range, and strategic
• Identify and differentiate the task in which
management is aided by information about
costs and benefit
• Identify which of management accountant’s
ethical responsibilities apply to a particular
ethical issue
• State the role of pronouncements of the
Cost Accounting Standard Board
Management
3 plans
Controller & cost
accounting
Management process
PLANNING
the construction of a detail
operating program, is the
process of sensing external
opportunities and threat,
determining desirable
objectives, and employing
resources to accomplish
these objectives
ORGANIZING
Is the establishment of
framework within which
activities are to be
performed - interalated
among uit
CONTROL
Is the management’s
systematic effort to achieve
objectives - monitored to see that
results stay within desired boundaries
BACK
Three kinds of plans
•Short-range plan -
budget - daily cash
•Long-range plan - 3-5
years
•Strategic plans unsystematic
process that begins with identifying an external example
threat or opportunity BACK
Controller
Coordinates management’s
participation in planning and
controlling the attainment of
objectives, in determining the
effectiveness of policies, and
creating organizational structures
and processes
Observing methods of planning and
control throughout the enterprise
and for proposing improvements in
them
THE ROLE OF COST ACCOUNTING
Furnish management with
necessary tool for planning and
controlling activities, improving
quality & efficiency, & making
both routine and strategic
decisions.
THE ROLE COST ACCOUNTING (Cont’)
The collection, presentation, and
analysis of information regarding
costs & benefit helps management
accomplish the tasks:
• Creating and executing plans &
budgets for operating under expected
competitive & economic conditions
• Establishing costing methods that
permit control of activities,
reductions of costs, and
improvements of quality
THE ROLE COST ACCOUNTING (Cont’)
• Controlling physical quantities of
inventory, and determining the cost
of each product or service produced
for pricing and for evaluating the
performance of a product,
department, or division
• Determining company costs and
profit for an annual accounting
period or a shorter period
• Choosing among two or more short-
run or long-run alternatives that
might alter revenue or costs
Ethic and professional
• 1983-1997 modif IMA (Institute of Manag
Accountant issued standard ethical
conduct for practitioner of manag acc n
financial manag. Honesty, Fairness,
Objectivity, and Responsibility
• CMA certified Management Accounting
• CFM certified Finance Manager
