WSU ACCTG 231 - Financial and Managerial Accounting: 7 Key Differences (5 pages)

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ACCTG 231 Lecture 1 Managerial Accounting An Overview Outline of Current Lecture I Financial and Managerial Accounting Seven Key Differences II Work of Management III Managerial Accounting Activities IV Accounting Majors V Certified Management Accountant VI CMA Exam VII Strategic Management VIII Customer Value Propositions IX Enterprise Risk Management X Process Management XI Lean Production Current Lecture I Financial and Managerial Accounting Seven Key Differences Financial Accounting Managerial Accounting 1 Users External persons who make financial decisions Managers who plan for and control an organization 2 Time Focus Historical perspective Future emphasis 3 Verifiability vs Emphasis on objectivity and relevance verifiability Emphasis on relevance 4 Precision vs Timeliness Emphasis on precision Emphasis on timeliness 5 Subject Primary focus is on companywide reports Focus on segment reports 6 Rules Must follow GAAP IFRS and prescribed formats Not bound by GAAP IFRS or any prescribed format 7 Requirement Mandatory for external Not mandatory These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute reports II III Work of Management Planning o Establish Goals Specify how goals will be achieved Develop budgets Controlling o The control function gathers feedback to ensure that plans are being followed o Feedback in the form of performance reports that compare actual results with the budget are an essential part of the control function Decision Making o Decision making involves making a selection among competing alternatives What should we be selling Who should we be serving How should we execute Managerial Accounting Activities Marketing Majors o Planning How much should we budget for TV print and Internet advertising How many salespeople should we plan to hire to serve a new territory o Controlling Is the budgeted price cut increasing unit sales as expected Are we