ACCT 2242

• Primary responsibilities of managers:

  • Planning: setting goals and objectives, forecasting, and developing models
  • Directing: managing operations, processes, and resources
  • Controlling: assessing operations, solving problems, and measuring performance
  • Decision Making: central to all areas, using information for interpretation, presentation, and action
• Management accountants' responsibilities:

  • Planning: setting goals and objectives, resource allocation, forecasting, and developing models
  • Directing: managing operations, monitoring activity, and resolving issues
  • Controlling: evaluating results, making adjustments, developing policy, and measuring performance
  • Decision Making: requires communication and relevant, timely information grounded in values
• Differences between managerial and financial accounting:

  • Internal vs. External focus
  • Unregulated vs. Regulated
  • Use for planning, directing, and controlling vs. investing/lending decisions
  • No independent review vs. 3rd party audit
  • Different frequencies of reporting
  • Scope of reporting
• Organizational structure and management accounting:

  • Structure varies based on size
  • Role of management accountants as internal consultants and advisors
  • Shift from data gatherers to analysts and interpreters due to technology advancements
• Skills required of managerial accountants:

  • Analytical skills
  • Communication skills
  • Technology proficiency
  • Business acumen
• Role of CPA and ethics in managerial accounting:

  • CPA sets and enforces standards
  • Importance of ethical behavior and resolving ethical dilemmas
  • Trust in accountants generated by ethical behavior
• Ethics - 'Doing the right thing; always'
• Morals are different from ethics - internal v external
• Ethics are evident in behavior - our ethics are judged by other people
• Ethical dilemmas can occur in all areas of life and can be particularly prevalent in financial work
• Resolve ethical issues by following policy, reporting the issue, and not compromising
• CPA Guidelines for Ethical Behaviour
• Adherence to Rules of Professional Conduct
• Compilation of allowed and disallowed behaviours
• No ownership interest in an audit client
• Enabling Competencies
• Adherence to laws and professional standards for knowledge and behaviour
• Having the requisite knowledge to perform certain tasks
• Assessing the Situation
• Recognition of ethical issues that may arise in work to be performed
• Planning and identifying possible conflicts of interest
• Integrative Analysis
• Anticipation of issues and identification of possible alternatives
• Scrutinizing ethical constraints to determine the best way forward
• Conclude/Advise and Communicate
• A clear and transparent decision based on the ethical analysis
• Regulatory & Business Trends
• SOX - financial scandals and the regulatory reaction
• IFRS - global standards for global companies
• Shifting economy - service and technology taking over from production and resources
• 1. commerce - the online revolution
• XBRL - automation & big-data
• Sustainability & CSR - better business models
• Blockchain - not just the future of money
• Sarbanes-Oxley Act of 2002 (SOX)
• To restore trust in publicly traded corporations, management, financial statements, and auditors
• Added CEO/CFO responsibilities (and liability) for financial statements, internal control structure, and procedures for financial reporting
• Requires Independent audit committee
• New requirements for public accounting firms (Auditors)
• Increased white-collar crime penalties