Introduction to ManAcc

• 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.