acg 2071 UCF Exam 1 B.D.
Managers Three Responsibilities - ANS--planning: setting goals and objectives for the company
and determining how to achieve them. Ex. Management decides to increase sale growth 10%
-directing: overseeing the company's day-to-day operations. Uses product cost reports, product
sales info, and other managerial accounting reports to run daily business operations. Ex.
Management uses info on product costs to determine sales prices. Ex. to lower product costs,
management moves production to mexico (also control). Ex. management reviews hourly sales
reports to determine the level of staffing needed to service customers.
-controlling: evaluating the results of business operations against the plan and making
adjustments to keep the company pressing toward its goals. Ex. Management conducts
variance analysis by comparing budget to actual. Ex. to lower product costs, management
moves production to Mexico.
financial accounting - ANS--aimed toward producing annual and quarterly consolidated financial
statements that will be used by investors and creditors to make decisions.
focuses on providing stockholders and creditors with the information they need to make
investment and lending decisions. Balance sheet, income statement, equity, cashflows.
-external : creditors stockholders, govt regulations
-GAAP must be included in report
-info based on historical transactions
-reports annually and quarterly
-data must be reliable and objective
managerial accounting - ANS--to plan, direct, control
providing internal management with the information it needs to run the company efficiently and
effectively. Info takes many forms depending on the management's needs.
-internal; managers
-management determines what it wants to report and it it wants it formatted.
-some past, but focuses on future
-data must be relevant
Role of managerial accountants in a company and how it has changed - ANS--organizational
structure: stockholders elect board of directors to oversee company, and they hire COO
(operations such as research and development) and CFO (all company's financial concerns)
-used to work in accounting departments and reported directly to the controller, now half are
throughout the company and work on cross fcn teams.
-computers have changed, used to do accounting routine tasks, now management views them
as internal consultants or business advisors. now spend more time planning, analyzing, and
interpreting accounting data and provide decision report.
, CFO - ANS-coo: chief operating officer companys operations such as research and
development, production and distribution
-CFO: all company's financial concerns
-treasurer:raising capitial through issuing stocks and bonds and investing fonds
-controller: general financial accounting, managerial accounting, and tax reporting.
-internal audit fcn: ensure that the company's internal controls and risk management policies are
fcn properly
-audit committee: internal audit fcn as well as the annual audit of the financial statements by
independent CPAs.
Sarbanes-Oxley Act - ANS--DEFINITION of 'Sarbanes-Oxley Act Of 2002 - SOX'
An act passed by U.S. Congress in 2002 to protect investors from the possibility of fraudulent
accounting activities by corporations. The Sarbanes-Oxley Act (SOX) mandated strict reforms to
improve financial disclosures from corporations and prevent accounting fraud. SOX was
enacted in response to the accounting scandals in the early 2000s. Scandals such as Enron,
Tyco, and WorldCom shook investor confidence in financial statements and required an
overhaul of regulatory standards.
-SOX is to restore trust in publicly traded corporations, their management, their financial
statements, and their auditors.
-enhances internal control and financial reporting requirements and establishes new regulatory
requirements for publicly traded companies and their independent auditors
Internal Financial Reporting Standards -IFRS - ANS--International Financial Reporting
Standards (IFRS) is a set of accounting standards developed by an independent, not-for-profit
organization called the International Accounting Standards Board (IASB).
-The goal of IFRS is to provide a global framework for how public companies prepare and
disclose their financial statements. IFRS provides general guidance for the preparation of
financial statements, rather than setting rules for industry-specific reporting.
Extensible Business Reporting Language -XBRL - ANS--enables companies to release financial
and business information in a format that can be quickly, efficiently, and cost-effectively
accessed, sorted, and analyzed over the internet.
-uses a standardized costing system to "tag" each piece of reported financial and business data
so that it can be read by computer programs, rather than human eyes
Business Trends that affect Management Accounting: Sustainability, Shifting Economy, Global
Marketplace, Lean Operations, TQM - ANS--Sustainability: the ability to meet the needs of the
present without compromising the ability of future generations to meet their own needs. do onto
other what you would do to you
-shifting economy: in North america industry is shifting from manufacturing to service
companies. Managerial accounting has expanded to meet the needs of service
Managers Three Responsibilities - ANS--planning: setting goals and objectives for the company
and determining how to achieve them. Ex. Management decides to increase sale growth 10%
-directing: overseeing the company's day-to-day operations. Uses product cost reports, product
sales info, and other managerial accounting reports to run daily business operations. Ex.
Management uses info on product costs to determine sales prices. Ex. to lower product costs,
management moves production to mexico (also control). Ex. management reviews hourly sales
reports to determine the level of staffing needed to service customers.
-controlling: evaluating the results of business operations against the plan and making
adjustments to keep the company pressing toward its goals. Ex. Management conducts
variance analysis by comparing budget to actual. Ex. to lower product costs, management
moves production to Mexico.
financial accounting - ANS--aimed toward producing annual and quarterly consolidated financial
statements that will be used by investors and creditors to make decisions.
focuses on providing stockholders and creditors with the information they need to make
investment and lending decisions. Balance sheet, income statement, equity, cashflows.
-external : creditors stockholders, govt regulations
-GAAP must be included in report
-info based on historical transactions
-reports annually and quarterly
-data must be reliable and objective
managerial accounting - ANS--to plan, direct, control
providing internal management with the information it needs to run the company efficiently and
effectively. Info takes many forms depending on the management's needs.
-internal; managers
-management determines what it wants to report and it it wants it formatted.
-some past, but focuses on future
-data must be relevant
Role of managerial accountants in a company and how it has changed - ANS--organizational
structure: stockholders elect board of directors to oversee company, and they hire COO
(operations such as research and development) and CFO (all company's financial concerns)
-used to work in accounting departments and reported directly to the controller, now half are
throughout the company and work on cross fcn teams.
-computers have changed, used to do accounting routine tasks, now management views them
as internal consultants or business advisors. now spend more time planning, analyzing, and
interpreting accounting data and provide decision report.
, CFO - ANS-coo: chief operating officer companys operations such as research and
development, production and distribution
-CFO: all company's financial concerns
-treasurer:raising capitial through issuing stocks and bonds and investing fonds
-controller: general financial accounting, managerial accounting, and tax reporting.
-internal audit fcn: ensure that the company's internal controls and risk management policies are
fcn properly
-audit committee: internal audit fcn as well as the annual audit of the financial statements by
independent CPAs.
Sarbanes-Oxley Act - ANS--DEFINITION of 'Sarbanes-Oxley Act Of 2002 - SOX'
An act passed by U.S. Congress in 2002 to protect investors from the possibility of fraudulent
accounting activities by corporations. The Sarbanes-Oxley Act (SOX) mandated strict reforms to
improve financial disclosures from corporations and prevent accounting fraud. SOX was
enacted in response to the accounting scandals in the early 2000s. Scandals such as Enron,
Tyco, and WorldCom shook investor confidence in financial statements and required an
overhaul of regulatory standards.
-SOX is to restore trust in publicly traded corporations, their management, their financial
statements, and their auditors.
-enhances internal control and financial reporting requirements and establishes new regulatory
requirements for publicly traded companies and their independent auditors
Internal Financial Reporting Standards -IFRS - ANS--International Financial Reporting
Standards (IFRS) is a set of accounting standards developed by an independent, not-for-profit
organization called the International Accounting Standards Board (IASB).
-The goal of IFRS is to provide a global framework for how public companies prepare and
disclose their financial statements. IFRS provides general guidance for the preparation of
financial statements, rather than setting rules for industry-specific reporting.
Extensible Business Reporting Language -XBRL - ANS--enables companies to release financial
and business information in a format that can be quickly, efficiently, and cost-effectively
accessed, sorted, and analyzed over the internet.
-uses a standardized costing system to "tag" each piece of reported financial and business data
so that it can be read by computer programs, rather than human eyes
Business Trends that affect Management Accounting: Sustainability, Shifting Economy, Global
Marketplace, Lean Operations, TQM - ANS--Sustainability: the ability to meet the needs of the
present without compromising the ability of future generations to meet their own needs. do onto
other what you would do to you
-shifting economy: in North america industry is shifting from manufacturing to service
companies. Managerial accounting has expanded to meet the needs of service
