Chapter 1

OVERVIEW OF MANAGEMENT
ACCOUNTING

MA. Le Hoang Oanh

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LEARNING OBJECTIVES
Knowing formation and development of managerial
accounting
Explaining why managers need managerial accounting
information
Understanding the work of management and the role of
managerial accounting
Identify the differences between financial accounting and
management accounting
Be aware of professional ethics of management accountants

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THE FORMATION AND DEVELOPMENT
OF ACCOUNTING MANAGEMENT

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THE FORMATION AND DEVELOPMENT OF
MANAGERIAL ACCOUNTING
…… Period 1 1956 Period 2 1980
Goals
Goals
Simplify information, provide
information for cost controlling Provide information to
and product pricing planning and controlling
à Focus on definition
of product costing How?
process & financial control Analyse for decision making &
How? responsibility accounting
- Cost accounting Restrictions
- Collecting & processing Based on three theoretical
economic & financial information assumptions
[ROI (1920, Donalson B)]

Technical activities Indirect management activities4

 THE FORMATION AND DEVELOPMENT OF
MANAGERIAL ACCOUNTING manager accountant is important to provide relevant in4 for manager
1980 1995 P4 today
customers are very important for company
P3 make dimond card to classify customers
who brings big profit for company=> Big
customer
so that company sells at lower price and gives them discount

Goals
Goals
- Create value for customers,
- Provide info for planning,
& shareholdersnếu thấy lợi nhuận lớn
Nhà đầu tư sẽ mua cổ phiếu

controlling and decision making

- Improve the internal
- Focus on reducing
business process
consumption of resources
Sell at a lower price than competitors=> Reduce cost=> save money

How How
Process analyses Evaluating the
Cost management factors creating value

Component of management Component of management5

process process
ROLE OF MANAGERIAL ACCOUNTING

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MANAGERS’ ROLES

strategy
Formulating long and
short-term plans
(Planning) 1

Comparing actual Implementing

and planned plans
Decision making
performance (Directing &
(Controlling) Motivating)

Mesuring performance
(Controlling)

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ROLES OF M.A INFORMATION IN THE MANAGEMENT

Decision information
Managers
making

inf Financial
Business past
accounting
activities

Other departments
Managerial
& parties outside
information accounting
the organization
other departments
competitors
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ROLES OF MANAGERIAL ACCOUNTING
MA is the process of
identifying, measuring, Providing information about the
analyzing, interpreting & org’s and competitors’ financial
communicating information status, operating status; market
for the pursuit of an conditions, customer tastes and
organization's goals. technical initiatives
Providing Providing inf to
inf about Planning build & develop
actual & a logical human
planned resource structure
Cont. Dir & and daily inf.
performance Decision
as well as making Moti Inf has to feedback
their on the effectiveness
differences and quality of work
Controlling has been done

Providing inf related 9

to business strategies
COMPARISION OF FINANCIAL AND
MANAGERIAL ACCOUNTING

khấu hao xe: reducing balanced method

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COMPARISION OF Manager
FINANCIAL AND MANAGERIAL ACCOUNTING
MANAGERIAL ACC FINANCIAL ACC
Reports to those inside Reports to those outside the
the org for planning, org external users
Objects using Investment
directing & motivating &
information controlling performance
creditor
Supplier
evaluation tax

Emphasis is on decisions Emphasis is on summaries

affecting the future of financial consequences of
thông tin non financial in4 or past activities
financial in4 are both important
Measured in physical unit, Measured in unit of
Characteristics unit of time and unit of currency
of information currency
Relevance and flexibility Objectivity and verifiability
of data are emphasied of data are emphasized

Timeliness of inf is Precision of inf is required 11

required
COMPARISION OF FINANCIAL AND MANAGERIAL
ACCOUNTING
MANAGERIAL ACC FINANCIAL ACC
Information Need not follow GAAP Must follow GAAP and
handling and accounting accounting standards
principles standards
Scope to - Each part of product, Entire enterprise
provide inf each product, each
group of product, each
business area,…
- Entire enterprise
Reports Not mandatory Mandatory for
not compulsory
external reports
Reporting Often (as managers Periodically
period require)
big company 12
 Đạo đức nghề nghiệp

PROFESSIONAL ETHICS OF
MANAGERIAL ACCOUNTANTS

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PROFESSIONAL ETHICS OF MANAGERIAL ACCOUNTANTS

năng lực bảo mật

Competence Confidentiality

IMA’S STANDARDS OF ETHICAL CONDUCT

khách quan chính trực được tín nhiệm

Objective Integrity

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PROFESSIONAL ETHICS OF MANAGERIAL ACCOUNTANTS

Competence

Maintain an appropriate level of proffesional

competence by on going development of their going = update
Knowledge and skills
Perfom their professional duties in according
with relevant laws, regulations,
and technical standards

Prepare complete and clear reports and

Recommendations after appropriate analyses
of relevant and reliable inf

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PROFESSIONAL ETHICS OF MANAGERIAL ACCOUNTANTS

Refrain from disclosing

confidential inf acquired in Refrain from using or
the course of their work appearing to use
except when authorized, confidential inf for
unless legally obligated to unethical of illegal
do so advantage either
personally or 3rd
parties

Confidentiality
Thấy cty kia cbi phá sản
take over cty kia = cách mua
stock với giá lower và bán lại
với giá cao hơn

Inform subordinates as appropriate regarding

the confidentiality of inf acquired in the
course of their work and monitor their
activities to assure the maintenance of that 16
confidentiality
PROFESSIONAL ETHICS OF MANAGERIAL ACCOUNTANTS

Avoid actual or Refrain from engaging in any

apparent conflicts activity that would prejudice
of interest and their ability to carry out their
advise all duties ethically
appropriate parties
of any potential
conflict
Integrity
Refrain from
engaging or
supporting any
Refuse any gift, favor, or activity that
hospitality that would influence would discredit
or would appear to influence their the profession
actions 17
PROFESSIONAL ETHICS OF MANAGERIAL ACCOUNTANTS

Communicate
inf fairly &
objectively Objectivity

manager can easily understand

Disclose fully all relevant inf that could reasonably

be expected to influence an intended user understanding
of the reports comments and recommendations presented
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End of Chapter 1

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