Textbook Notes (362,814)
Canada (158,058)
Accounting (526)
ACC 410 (34)
Chapter 1

Chapter 1

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Ryerson University
ACC 410
Keith Whelan

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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