Managers carry out three major activities in an organization: Planning, Directing, and Controlling.
Planning involves establishing a basic strategy, selecting a course of action, and specifying how the action will be implemented.
Setting up objectives is an example of planning
Directing and motivating involves mobilizing people to carry out plans and run routine operations.
Directing refers to the execution phase of the plan
Controlling involves ensuring that the plan is actually carried out and is appropriately modified as circumstances change.
Comparing actual performance with set plans or standards is an example of controlling
An example of controlling is deciding what corrective actions to take should there be any deviation (variance) between actual and planned performance.
The main difference between financial accounting and management accounting is the intended user of the information.
GAAP is the guiding principal for finacc, while there is nothing specified for manacc.
As compare to finacc, manacc is subjective.
Under manacc, there is no unifying model or equation.
Manacc is extensive and detailed, while finacc focuses mainly on business as a whole.
Cost accounting is a subset of both finacc and manacc.
Controllership is the process by which management assures itself that the company resources are obtained and utilized according to plans that are in line with the company's set objectives.
Controller is responsible for supervising the personnel in the accounting department and for preparing the information and reports used in both managerial and financial accounting.
Treasurer is responsible for raising capital, safeguarding the organization's asset, management of investments, credit policy and insurance coverage.
A controller who is responsible with accounting, must not hold at the same time the position of a treasurer, who is primarily concerned with custody of funds.
Investor relation is a function undermined by the treasurer.
Professional ethics for managerial accountants entails competence, confidentiality, integrity, and credibility/objectivity.
Mitigating actual conflicts of interest falls under the concept of integrity.
A managerial accountant maintains his credibility when he discloses all relevant information that could reasonably be expected to influence an intended user's understanding of the reports, analyses, or recommendations.
Management by exception is a technique of highlighting those which vary significantly from plans and standards in line with the management principle that executive time should be spent on items that are non-routine and are identified as top priority.
Line function exercises direct downward authority over line departments.
Staff function refers to the authority to advise but not to command others; it is exercised laterally or upwards.