Chapter 1 Flashcards
Identify managers four primary responsibilities
Planning
Directing
Controlling
Decision Making
What does planning involve?
Setting goals and objectives
-Determining how to achieve them
Directing pertains to overseeing what?
A company’s day-to-day operations
What does controlling involve?
Evaluating the results of business operations against the plan and making adjustments
TRUE or FALSE
Management engages in decision making while it plans, directs and controls operations
TRUE
Managerial versus Financial Accounting:
Who Are the Primary Users of the Information?
MA - Internal users such as Managers
FA - External users such as creditors, shareholders, government regulators
Managerial versus Financial Accounting:
What is the purpose of the information?
MA - Help managers in business operations and decision making
FA - Help external users make investing and lending decisions
Managerial versus Financial Accounting:
What is the primary accounting product?
MA - Any internal accounting report deemed worthwhile by management
FA - Financial statements
Managerial versus Financial Accounting:
What must be included in the report and how must it be formatted?
MA - Management determines what it wants to report. Only prepared when the benefit is expected to exceed the cost to prepare the report
FA - Standards are chosen between IFRS (international financial reporting standards) or ASPE (Accounting standards for Private Enterprises)
Managerial versus Financial Accounting:
What is the underlying basis of the information?
MA - Focuses on the future, and provides info on external and internal transactions
FA - Based on historical transactions with external parties
Managerial versus Financial Accounting:
What information characteristic is emphasized?
MA - The data must be relevant
FA - the data must be reliable and objective
Managerial versus Financial Accounting:
What business unit is the report about?
MA - Segments of the business (i.e departments, products, geographical regions)
FA - the company as a whoe
Managerial versus Financial Accounting:
How often are the reports prepared?
MA - Depends on managers needs. Some can be daily, wheras some may only be produced once
FA- Annually and Quarterly
Managerial versus Financial Accounting:
Does anyone verify the information?
MA- No independend audits. Company may have internal auditors
FA - Independent certified public accountants audit the annual financial statements
Managerial versus Financial Accounting:
Is the information required by an outside group/goverment agency?
MA - No
FA - Yes, each province has a securities commission that required publically traded companies to issue annual audited financial statements
Managerial versus Financial Accounting:
Is there any concern over how the reports will affect employee behaviour?
MA - Yes, management carefully considers begavioural implications when designeing the managerial accounting system
FA - The primary concern is about adequacy of disclosure
Shareholders elect a _________ to oversee the company
board of directors
An organizations baord only meets periodically, so it hires a ______ to manage on a daily basis
CEO (chief executive officer)
What other executives does the CEO hire?
COO (chief operating officer) and CFO (chief financial officer)
The treasurer and controller report directly to the ____
CFO
Click to review some of the important results of the SOX regulations
CEO/CFO take responsibility for the company’s financial statements, internal control system, and procedures for financial reporting
Audit commitee must be independent and should include a financial expert
New requirements for public accounting firsm, including limited non-audit services for audit clients and periodic quality review
Stiffer imprison,emt and monetary fines for white collar crimes
As a result of globalization, many companies have recently moved to adopt what reporting standard for publically traded companies?
International Financial Reporting Standard (IFRS)
____ uses a coding system to tag aspects of financial data. It also allows companies ot release information in a format that is eddiciently accessed, sorted and analyzed.
Extensible Business Reporting Language (XBRL)
