accountin nformation

8/8/2019 Accountin nformation

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AccountingInformation System

Mrs Bengi IssaCPA(T), Msc. Fin. Mgt


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DefinitionManagement accounting measures,analyzes and reports financial and non-

financial information that helps managersmake decisions to fulfill the goals of anorganizations.

Managers use management accountinginformation to choose, communicate andimplement strategy, coordinate product

design, production and marketingdecisions.

Focuses on internal reporting


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Roles of mgt. accountantForecasting and planning,

Variance analysis,Monitoring costs

Preparation of certain financial reports,reconciliations of the financial data to sourcesystems,

value creation,

Ensure success of the business.


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Managementaccounting

Financialaccounting

Rules ofmeasurement andreporting

Internal measures andreports do not have tofollow internationalstandards but arebased on cost benefitanalysis

Financialstatements mustbe prepared inaccordance withInternationalStandards and becertified by theexternal,independentauditors


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Managementaccounting

Financialaccounting

Time span andtype of report

Varies from hourlyinformation to 15

to 20 years with

financial and nonfinancial reports

Annual andquarterly financial

reports, primarily

on the company asa whole

Behavioral

implications

Designed to

influence the

behavior of

managers and

other employees

Primarily reports

economic events

but also influences

behavior because

managers

compensation is

often based on

reported financial

results.


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Designing AccountingInformation System

Planning

Analysis

Design

Implementation and

Support


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Planning


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Analysis


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Design


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Implementation


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Support


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Management accounting andthe business environmentCharacterized by increasing competitionand a relentless drive for continuous

improvement.Several approaches have been developedto assist organizations in meeting these

challenges-including:just-in-time (JIT),

total quality management(TQM),process reengineering, and

the theory of constraints (TOC).
http://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#JIThttp://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#TQMhttp://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#Process%20Reengineeringhttp://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#Theory%20of%20Constraintshttp://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#Theory%20of%20Constraintshttp://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#Process%20Reengineeringhttp://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#TQMhttp://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#JIT


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JITEmphasizes the importance ofreducing inventories to the barest

minimum possible.This reduces working capital

requirements,Frees up space,

Reduces throughput time,

Reduces defects, and

Eliminates waste.
http://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch14s_kt.html#Working%20Capitalhttp://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#Throughput%20Timehttp://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#Throughput%20Timehttp://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch14s_kt.html#Working%20Capital


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TQMinvolves focusing on the customer, andit employs systematic problem solvingusing teams made up of front-line

workers.

Specific TQM tools include benchmarking

and the plan-do-check-act (PDCA) cycle.

By emphasizing teamwork,

TQM can avoid the organizationalinfighting that might otherwise blockimprovement.
http://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#Benchmarkinghttp://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#PDCAhttp://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#PDCAhttp://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#Benchmarking


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The theory of constraintsIt emphasizes the importance of

managing the organization'sconstraints.

Since the constraint is whatever isholding back the organization,

improvement efforts usually must be

focused on the constraint in order to

be really effective.
http://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#Constrainthttp://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#Constraint


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Process Reengineeringinvolves completely redesigning a

business process in order to eliminatenon-value-added activities and

to reduce opportunities for errors.

Process Reengineering relies more on

outside specialists than TQM and

is more likely to be imposed by top

management.
http://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#Business%20Processhttp://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#Business%20Process


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Organizational ChartIt depicts who works for whom in the

organization and which units performstafffunctions rather than line

functions.
http://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#Staffhttp://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#Linehttp://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#Linehttp://www.mhhe.com/business/accounting/garrison/Student/olc/garrison9emgracct_s/ch01s_kt.html#Staff


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Ethical standardsServe a very important practical function in anadvanced market economy.

Without widespread adherence to ethical

standards, the economy would slow down

dramatically.

Ethics are the lubrication that keep a marketeconomy functioning smoothly.

The Standards of Ethical Conduct forPractitioners of Management Accounting and

Financial Management provide sound, practical

guidelines for resolving ethical problems thatmight arise in an organization.


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Ethical standardsEthics build trust promote loyal and

productive relationships.There are code of ethics for

management accountants

Code of ethics


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