ACCT 2020 Chapter Notes - Chapter 1: Internal Audit, Management Accounting, Financial Statement

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15 May 2017
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ACCT 2020 Chapter 1 Notes
Managerial Accounting
VS
Financial Accounting
For internal management
For Stockholders and potential
investors
Forms of information depends on
manager’s needs (for efficiency and
effectiveness)
Forms of information: balance sheet,
statement of cash flows, income
statements
*gather*summarizes*reports*
Complies to GAAP
Based on past and future
Based on Past Transactions
Manager’s 3 Primary Responsibilities:
1. Planning
2. Directing
3. Controlling
Planning: setting goals and objectives for the company and determining how to achieve them
(think budgets)
Directing: overseeing day to day operations. Including:
Product Cost Reports
Product Sales Information
Managerial Accounting Reports
Controlling: Evaluating the business's results against the plan and making adjustments to
reach the goal (think feedback)
Budget: the quantitative expression of a plan
Basic Structure of Corporations
Board of Directors: elected by stockholders to oversee a large company. The board members
only meet periodically.
CEO/ Chief Executive Officer: Manage the company on a daily basis
COO/ Chief Operating Officer: Responsible for the company’s operations such as research,
development, production, and distribution.
CFO/ Chief Financial Officer: Responsible for all the company’s financial concerns.
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Treasurer: Reports directly to the CFO and primarily responsible for raising funds (stocks and
bonds) and investing funds.
Controller: Reports directly to CFO and responsible for general financial and managerial
accounting and tax reporting.
Internal Audit Function: Ensure the company’s internal controls and risk management policies
are functioning properly. Reports directly to Audit committee.
Audit Committee: Oversees internal audit function and annual audit (by independent CPAs.)
Cross-Functional Teams: employees representing various functions for the company. Good
for decisions because many view points are offered. Management accountants are usually
leaders. The team usually reports to a vice president.
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Document Summary

Forms of information: balance sheet, statement of cash flows, income statements. Forms of information depends on manager"s needs (for efficiency and effectiveness) Manager"s 3 primary responsibilities: planning, directing, controlling. Planning: setting goals and objectives for the company and determining how to achieve them (think budgets) Controlling: evaluating the business"s results against the plan and making adjustments to reach the goal (think feedback) Board of directors: elected by stockholders to oversee a large company. Ceo/ chief executive officer: manage the company on a daily basis. Coo/ chief operating officer: responsible for the company"s operations such as research, development, production, and distribution. Cfo/ chief financial officer: responsible for all the company"s financial concerns. Treasurer: reports directly to the cfo and primarily responsible for raising funds (stocks and bonds) and investing funds. Controller: reports directly to cfo and responsible for general financial and managerial accounting and tax reporting. Internal audit function: ensure the company"s internal controls and risk management policies are functioning properly.

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