Although financial and managerial accounting differ in many ways, they are similar in that both rely on the same underlying financial data.
Managerial accounting is a branch of financial accounting and serves essentially the same purposes as financial accounting.
Managerial accounting places greater emphasis on the future than financial accounting, which is primarily concerned with the past.
Managerial accounting is not needed in a non-profit or governmental organization.
When carrying out their planning activities, managers select a course of action and specify how the action will be implemented.
When carrying out their planning activities, managers obtain feedback to ensure that the plan is actually carried out and is appropriately modified as circumstances change.
The controller occupies a line position in an organization.
Decentralization means the delegation of decision-making authority throughout an organization by allowing managers at various operating levels to make key decisions relating to their own area of responsibility.
A firm”s organization chart will normally show both the formal and informal lines of reporting and communication.
The Chief Financial Officer of an organization is responsible for ensuring that line operations run smoothly.
Traditionally, companies have maintained large amounts of raw materials, work in process, and finished goods inventories to act as buffers so that operations can proceed smoothly even if there are unanticipated disruptions.
Process Reengineering is generally considered to be a more radical approach to improvement than Total Quality Management.
Process Reengineering emphasizes a team approach involving front-line workers, whereas Total Quality Management is usually implemented using outside specialists and is imposed from above.
If ethical standards were not generally followed, one of the results would probably be fewer goods and services available in the marketplace.
The Standards of Ethical Conduct for Management Accountants promulgated by the Institute of Management Accountants specifically state that management accountants” sole ethical responsibility is to not break any laws.
