McGraw-Hill/Irwin Slide 2 Learning Objective 1 Understand the role of management accountants in an organization.
McGraw-Hill/Irwin Slide 3 Organizational Structure Decentralization is the delegation of decision- making authority throughout an organization.
McGraw-Hill/Irwin Slide 4 Line and Staff Relationships Line positions are directly related to achievement of the basic objectives of an organization. Example: Production supervisors in a manufacturing plant. Staff positions support and assist line positions. Example: Cost accountants in the manufacturing plant.
McGraw-Hill/Irwin Slide 5 The Chief Financial Officer (CFO) A member of the top management team responsible for: Providing timely and relevant data to support planning and control activities. Preparing financial statements for external users. A member of the top management team responsible for: Providing timely and relevant data to support planning and control activities. Preparing financial statements for external users.
McGraw-Hill/Irwin Slide 6 Learning Objective 2 Understand the basic concepts underlying Lean Production, the Theory of Constraints, and Six Sigma.
McGraw-Hill/Irwin Slide 7 Process Management Business functions making up the value chain Product Customer R&D Design Manufacturing Marketing Distribution Service A business process is a series of steps that are followed in order to carry out some task in a business.
McGraw-Hill/Irwin Slide 8 Process Management There are three approaches to improving business processes... Lean Production Theory of Constraints (TOC) Six Sigma
McGraw-Hill/Irwin Slide 9 Lean Production Lean thinking can be used to improve business processes that link companies together. The term supply chain management refers to the coordination of business processes across companies to better serve end consumers.
McGraw-Hill/Irwin Slide 10 A constraint (also called a bottleneck) is anything that prevents you from getting more of what you want. The Theory of Constraints is based on the observation that effectively managing the constraint is the key to success. The constraint in a system is determined by the step that has the smallest The constraint in a system is determined by the step that has the smallest capacity. Theory of Constraints
McGraw-Hill/Irwin Slide 11 Six Sigma A process improvement method relying on customer feedback and fact-based data gathering and analysis techniques to drive process improvement. Refers to a process that generates no more than 3.4 defects per million opportunities. Sometimes associated with the term zero defects.
McGraw-Hill/Irwin Slide 12 Learning Objective 3 Understand the importance of upholding ethical standards.
McGraw-Hill/Irwin Slide 13 Code of Conduct for Management Accountants The Institute of Management Accountant’s (IMA) Statement of Ethical Professional Practice consists of two parts that offer guidelines for: Ethical behavior. Resolution for an ethical conflict. The Institute of Management Accountant’s (IMA) Statement of Ethical Professional Practice consists of two parts that offer guidelines for: Ethical behavior. Resolution for an ethical conflict.
McGraw-Hill/Irwin Slide 14 Competence Follow applicable laws, regulations and standards. Maintain professional competence. Provide accurate, clear, concise, and timely decision support information. IMA Guidelines for Ethical Behavior Recognize and communicate professional limitations that preclude responsible judgment.
McGraw-Hill/Irwin Slide 15 Confidentiality Do not disclose confidential information unless legally obligated to do so. Ensure that subordinates do not disclose confidential information. Do not use confidential information for unethical or illegal advantage. IMA Guidelines for Ethical Behavior
McGraw-Hill/Irwin Slide 16 Mitigate conflicts of interest and advise others of potential conflicts. Abstain from activities that might discredit the profession. Refrain from conduct that would prejudice carrying out duties ethically. Integrity IMA Guidelines for Ethical Behavior
McGraw-Hill/Irwin Slide 17 Communicate information fairly and objectively. Disclose all relevant information that could influence a user’s understanding of reports and recommendations. Credibility IMA Guidelines for Ethical Behavior Disclose delays or deficiencies in information timeliness, processing, or internal controls.
McGraw-Hill/Irwin Slide 18 Abandoning ethical standards in business would lead to a lower quality of life with less desirable goods and services at higher prices. Why Have Ethical Standards? Without ethical standards in business, the economy, and all of us who depend on it for jobs, goods, and services, would suffer. Ethical standards in business are essential for a smooth functioning economy.
McGraw-Hill/Irwin Slide 19 Company Codes of Conduct Employees Customers Suppliers And to the communities in which the company operates. Broad-based statements of a company’s responsibilities to:
McGraw-Hill/Irwin Slide 20 Corporate Governance The system by which a company is directed and controlled. Board of Directors Top Management Stockholders To pursue objectives of Incentives and monitoring for
McGraw-Hill/Irwin Slide 21 Enterprise Risk Management A process used by a company to proactively identify and manage risk. Once a company identifies its risks, perhaps the most common risk management tactic is to reduce risks by implementing specific controls. Should I try to avoid the risk, share the risk, accept the risk, or reduce the risk?
McGraw-Hill/Irwin Slide 22 Corporate Social Responsibility CSR extends beyond legal compliance to include voluntary actions that satisfy stakeholder expectations. Corporate social responsibility (CSR) is a concept whereby organizations consider the needs of all stakeholders when making decisions. Corporate social responsibility (CSR) is a concept whereby organizations consider the needs of all stakeholders when making decisions. CustomersEmployeesCommunitiesSuppliersStockholders Environmental & Human Rights Advocates