Textbook Notes (378,694)
CA (167,230)
Ryerson (11,569)
Accounting (557)
ACC 410 (34)
Chapter 1

Chapter 1

4 Pages
85 Views

Department
Accounting
Course Code
ACC 410
Professor
Keith Whelan

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Chapter 1 The Role of Accounting Information in Ethical Management Decision-Making
Uncertainties issues and information about which we have doubt
Biases preconceived notions adopted without careful thought
Decision Quality refers to the characteristics of a decision that affect the likelihood of
achieving a positive outcome
Organizational vision core purpose and ideology of the organization, which guides the
organizations overall direction and approaches toward its various stakeholder groups
Vision statement theoretical description of what the organization should become
Mission statement high-level declaration of the organizations purpose
Core values statement summary of the beliefs that define the organizations
culture
Code of conduct statement describes the organizations social or environmental
responsibilities
Organizational Core Competencies an organizations strengths relative to competitors
Examples productivity, skills, knowledge, technologies, reputation, growth
opportunities
Organizational vision and core competencies are closely related
Organizational Strategies tactics managers use to take advantage of core competencies
while working toward the organizational vision
Examples Long-term goals, organizational structure, financial structure, long-term
resource allocation (investments/divestments, nature of operations, products or
services and markets)
Operating Plans involve specific short-term decisions that shape an organizations day-to-
day activities
Examples drawing cash from a bank line of credit, hiring an employee, ordering
materials
Actual Operations various actions taken and results achieved over a period of time
Examples customer orders received, revenues earned, number of employees hired
Collected and measured by organizations information system; then used to monitor
and motivate performance
Cost accounting involves the process of tracing, recording, analyzing, and determining the
cost of an organizations project, process or activity
Helps understand costs to make decisions (reduce company costs and improve
profits/productivity)
Management Accounting and Financial Accounting (internal) process of gathering,
summarizing, and reporting financial and nonfinancial information used internally by
managers to make decisions
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Description
Chapter 1 – The Role of Accounting Information in Ethical Management Decision-Making Uncertainties – issues and information about which we have doubt Biases – preconceived notions adopted without careful thought Decision Quality – refers to the characteristics of a decision that affect the likelihood of achieving a positive outcome Organizational vision – core purpose and ideology of the organization, which guides the organization’s overall direction and approaches toward its various stakeholder groups • Vision statement – theoretical description of what the organization should become • Mission statement – high-level declaration of the organization’s purpose • Core values statement – summary of the beliefs that define the organization’s culture • Code of conduct statement – describes the organization’s social or environmental responsibilities Organizational Core Competencies – an organization’s strengths relative to competitors • Examples – productivity, skills, knowledge, technologies, reputation, growth opportunities • Organizational vision and core competencies are closely related Organizational Strategies – tactics managers use to take advantage of core competencies while working toward the organizational vision • Examples – Long-term goals, organizational structure, financial structure, long-term resource allocation (investments/divestments, nature of operations, products or services and markets) Operating Plans – involve specific short-term decisions that shape an organization’s day-to- day activities • Examples – drawing cash from a bank line of credit, hiring an employee, ordering materials Actual Operations – various actions taken and results achieved over a period of time • Examples – customer orders received, revenues earned, number of employees hired • Collected and measured by organization’s information system; then used to monitor and motivate performance Cost accounting – involves the processof tracing, recording, analyzing, and determining the cost of an organization’s project, process or activity • Helps understand costs to make decisions (reduce company costs and improve profits/productivity) Management Accounting and Financial Accounting (internal) – processof gathering, summarizing, and reporting financial and nonfinancial information used internally by managers to make decisions www.notesolution.com • Not bound by GAAP • Helps managers plan, control and measure performance • Future oriented and reports on segment of an organization Financial accounting (external) – processof preparing and reporting financial information that is used most frequently by decision makers outside the organization, such as stakeholders and creditors • Prepared in accordance to GAAP • Historical fact and primarily concerned with organization as whole Strategic Cost Management – simultaneous focus on reducing costs and strengthening an organization’s strategic position • Balanced scorecard – formal approach used to help organizations translate their vision into objectives that can be measured and monitored using both financial and nonfinancial performance measures Internal and External Reports - External Report – document that presents information for use outside an organization • Shareholder Reports, Other Stakeholder Reports, Government Reports - Internal Report – document that represents information for use only inside an organization • Support Organizational Strategies, Support Oper
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