Cost

• Management accounting involves coordinating, ranking, and implementing activities to meet the organization's objectives as perceived by the management accountant
• The management accountant tailors the application of processes to the organization to achieve its short-term and long-term objectives effectively
• Management accountants are involved in functions like controllership, treasury, financial analysis, planning, budgeting, cost accounting, internal audit, systems, and general accounting
• Management accountants may hold titles such as controller, treasurer, budget analyst, cost analyst, and accountant
• The accounting function is typically "staff", providing specialized services like budgeting, controlling, pricing, and special decisions to line managers and other staff managers
• Line authority allows commanding action or giving orders to subordinates, held by line managers responsible for attaining business objectives efficiently
• Staff authority, exercised laterally or upward, involves advising but not commanding others, with staff managers supporting line departments in areas like personnel, purchasing, engineering, and accounting
• The chief accounting officer, usually the controller, fills a staff role in the company, contrasting with the line roles of sales and production executives
• Most rules in ethical standards are motivated by practical considerations; not following them could lead to consequences like decisions based on incomplete information and deterioration of operations
• If employees can't be trusted with confidential information, top managers might be reluctant to distribute it, leading to decisions based on incomplete data and operational decline
• If employees accept bribes from suppliers, contracts might go to those who pay the highest bribe rather than the most competent, potentially compromising quality
• If CEOs routinely lie in financial statements, investors and creditors would have little basis for informed decisions, leading to slower economic growth and higher prices
• The Institute of Management Accountants (IMA) developed the Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management, providing general guidelines for ethical behavior and specific guidance on handling ethical misconduct within an organization
• The treasurer in a firm is responsible for funds procurement, banking, custody of funds, investment of funds, and various operating responsibilities like credit and collection, inventory management, and compliance with legal and regulatory provisions
• Qualifications of an effective controller include technical foundation in accounting and finance, understanding of planning and organizing principles, industry knowledge, communication skills, and the ability to motivate others
• In organizational structures, the role of finance is typically assigned to the Chief Financial Officer (CFO) or the Vice President-Finance who reports to the President
• The financial vice-president's key subordinates are the Treasurer and the Controller
• Basic functions of controllership include planning, control, reporting, accounting, and other primary responsibilities like managing taxes and relationships with auditors
• The controller is an integral part of the top management team and needs strong accounting skills as well as skills required of high-level executives
• The controller's authority is staff authority in advising other departments but has line authority within their own department
• The CFO oversees financial operations and responsibilities usually include controllership, treasury, risk management, taxation, internal audit, and sometimes information systems
• The controller, also known as the chief accounting officer, is primarily responsible for management accounting and financial accounting