Chapter 1 these goals Managers plan by setting goals and objective for the company and devising strategies for achieving Then they direct the day to day operations of the company in light of the goals and objectives They control the company by comparing actual results to plans and then using that feedback to adjust plans and operations Throughout all aspects of these duties management is making critical business decisions Management uses information on product costs to determine sales prices Directing To lower product costs management moves production to Mexico Controlling Management conducts variance analysis by comparing budget to actual Controlling Management reviews hourly sales reports to determine the level of staffing needed to service customers Directing Management decides to increase sales growth by 10 next year Planning Management creates a sales budget for the upcoming quarter Planning Top management selects a location for a new store Planning Management is designing a new sales incentive program for the upcoming year Planning The stores manager posts the employee time schedule for the next week so that employees know when they are working Directing The manager of the Service Department investigates why the actual hours spent on a recent repair job exceeded the standard for that type of repair by more than 20 Controlling US companies must follow GAAP or IFRS in their financial accounting systems When managers evaluate the company s performance compared to the plan they are performing the Financial accounting develops reports for external parties such as creditors and shareholders controlling role of management Managers are decision makers inside a company Financial accounting provides information on a company s past performance to external parties Managerial accounting systems are not restricted by GAAP or IFRS but are chosen by comparing the cost versus the benefits of the system Choosing goals and the means to achieve them is the planning function of management Managerial accounting systems are chosen by comparing the costs vs the benefits of the system and are not restricted by GAAP or IFS Financial accounting develops reports for external parties such as creditors and shareholders Managerial accounting systems report on various segments or business units of the company Financial accounting statements of public companies are audited annually by CPAs CPAs audit the financial accounting statements of public companies Companies must follow GAAP or IFRS in their financial accounting systems Decision makers inside a company are the managers Choosing goals and the means to achieve them is the planning function of management Managerial accounting systems report on various segments or business units of the company When managers evaluate the company s performance compared to the plan they are performing the controlling role of management Information on a company s past performance is provided to external parties by financial accounting Providing earnings information to your brother before it is publicly announced violates confidentiality standard Stealing from your employer is a violation of the integrity standard Skipping continuing education sessions could violate the requirement to maintain professional competence If your company paid for you to attend the conference skipping the sessions also violates the integrity standard Failing to read specifications of the software package before purchasing it violates the competence standard Failing to provide job description information to management because you fear it may be used to cut a position in your department violates the credibility standard The SEC is expected to require the adoption of IFRS for all publicly traded companies within the next few years which differed from the GAAP that companies are currently required to use ERP serves the information needs of people accounting as well as people in marketing and in the warehouse XBRL is a language that utilizes a standard coding system companies use to tag each piece of financial and business information in a format that can quickly and efficiently accessed over the internet Directing is the management process of overseeing the company s day to day operations Typically the treasurer and the controller report directly to the CFO The Sarbanes Oxley Act of 2002 was enacted to restore trust in publicly traded corporations their Firms acquire the ISO 9001 2008 certification to demonstrate their commitment to quality management their financial statements and their auditors Planning is the management process of setting goals and objective for the company and determining how to achieve them The CEO manages the company on a daily basis Sustainability is the ability to meet the needs of the present without compromising the ability of future generations to meet their own needs The role of internal audit function is to ensure that the company s internal controls and risk management policies are functioning properly The goal of TQM is to delight customers by providing them with superior products and services Controlling is the management process of evaluating the results of business operations against the plan and making adjustments to keep the company pressing towards its goals The triple bottom line focuses on people planet and profit Lean thinking is both a philosophy and a business strategy of operating without waste Throughput time is the time between buying raw materials and selling the finished products Chapter 2 Direct materials are stored in raw materials inventory Kmart is a merchandising company Manufacturers sell from their stock of finished goods inventory Partially completed units are kept in the work in process inventory Merchandisers inventory consists of freight in and the cost of merchandise Manufacturing companies carry three types of inventories raw materials inventory work in Service companies generally have no inventory Intel computer chips is a manufacturing company process inventory and finished goods inventory H and R Block is a service company Two types of merchandising companies include retailers and wholesalers Relevant Quantitative Information difference in salaries costs of food costs of transportation benefits costs of housing Relevant Qualitative Information difference in future career development opportunities proximity to family and friends difference in lifestyle weather job description Relevant information always pertains to the future and differs