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19 Cards in this Set
- Front
- Back
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Managerial responsibility: Making Decisions
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Choosing courses of action,
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Managerial responsibility: Planning
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Setting goals and objectives and determining how to achieve them. BUDGETS=PLANNING
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Managerial responsibility: Directing
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Overseeing day-to-day operations. Uses sales and costs reports to adjust strategies.
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Managerial responsibility: Controlling
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EVALUATING RESULTS of business operations against the plan and making adjustments to the plan. BUDGET VARIANCES- difference between actual costs and the budget.
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Sarbanes-Oxley Act of 2002 (SOX)
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Caused by accounting scandals of Enron and WorldCom. Publicly traded companies must comply with SOX. Requires the CFO and CEO to take responsibility for financial statements, internal control system, and financial procedures. Audit committee must be independant and have a financial expert. Stiffer imprisonment and monetary fines for white-collar crimes. Limits non-audit services for audit clients and periodic quality review for CPA firms.
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ISO 9001:2000
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A certification a firm can earn by complying with the quality management standards set forth by the ISO and undergoing extensive audits of their quality management processes. This gives them a competitive advantage.
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Cost-benefit Analysis
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Used to decide which quality improvement initiatives to undertake.
Expected Value - Costs = Benefit(Cost) |
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Expected Value
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Benefit x Probability
Add all the probabilities (extremely successful, moderately successful, etc) to get the average extra benefits |
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Board of directors
What are their responsibilities, who do they report to, who reports to them? |
Oversee the company. Elected by stockholders. Meets only periodically so they hire the CEO. They report to the stockholders. CEO and audit committee report to the board of directors.
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CEO
What are their responsibilities, who do they report to, who reports to them? |
In charge of day-to-day operations. Reports to the board of directors. COO, CFO, and internal audit report to the CEO
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CFO
What are their responsibilities, who do they report to, who reports to them? |
Responsible for all the company's financial concerns. Reports to the CEO. Treasurer, controller, and internal audit all report to the CFO.
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COO
What are their responsibilities, who do they report to, who reports to them? |
Responsible for the company's operations such as R&D, production, and distribution. No one reports to them, and they report to the CEO.
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Treasurer
What are their responsibilities, who do they report to, who reports to them? |
Responsible for RAISING CAPITAL (by issuing stocks and bonds) and investing funds. Reports to the CFO, no one reports to them.
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Controller
What are their responsibilities, who do they report to, who reports to them? |
Responsible for general financial and managerial ACCOUNTING, and for tax reporting. Reports to the CFO, no one reports to them.
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Internal Audit Function
What are their responsibilities, who do they report to, who reports to them? |
The NYSE requires that listed companies have one. They ensure that the company's internal controls and risk management policies are functioning properly. Reports to the internal audit committee, CEO, and CFO. No one reports to them.
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Audit Committee
What are their responsibilities, who do they report to, who reports to them? |
Subcommittee of the board of directors. Oversees the internal audit function and the annual audit of the financial statements by independent CPAs. Only meets periodically which is why the internal audit function also reports to the CFO and CEO.
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Where do managerial accountants work within the company?
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They used to report to the controller, but now most companies have cross-functional teams where they are located in several areas of the company.
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Institute of Management Accountants (IMA)
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Professional association for management accountants. They publish a monthly journal called "Strategic Finance". Includes two professional certificates: Certified Management Accountant (CMA) and Certified Financial Manager (CFM). CMA is more managerial, CFM is more financial.
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Competence, Integrity, Credibility, Confidentiality
What organization are these regulations of? Include examples |
Regulations of the IMA
Competence: Continue to develop skills, don't pretend you know how to do something Integrity: Avoid conflicts of interest, refrain from engaging in an action that would prejudice carrying out actions ethically. Credibility: Don't bias information and reports presented to management, Confidentiality: Don't disclose company information |
