Summary Management Accounting
Chapter 1 Managerial accounting, the business organization, and professional ethics
Management accounting: process or activity within an enterprise organization in which one is engaged in collecting,
organizing, analysing, and reporting (financial) information for planning and control by management. Unlike external
reporting is management accounting focusing on internal planning and control activities.
Management by exception: concentrating more on areas that deviate from the plan and less on areas that conform with
plans and are presumed to be running smoothly.
The value chain of business functions
Managers must recognize activities that are necessary for a company to create goods or services that it sells. These
activities comprise the value chain, the set of business functions or
activities that add value to the products or services of an organization.
It includes the following:
• Research and development: generation of ideas related to
new products, services, or processes
• Design: detailed design and engineering of products, services,
or processes
• Production: coordination and assembly of resources to
produce a product or deliver a service
• Marketing: methods by which customers learn about the
value and features of products or services (for example,
advertising or selling activities)
• Distribution: mechanisms by which a company delivers
products or services to the customer
• Customer service: support activities provided to the customer
Ethical conduct
The field that deals with human conduct in relation to what is morally good and bad, right, and wrong. It is the application
of values to decision making. These values include honesty, fairness, responsibility, respect, and compassion. Ethical
conduct includes:
- Competence: be a professional
- Confidentiality: keep information confidential
- Integrity: take your responsibility
- Credibility: fair and objective
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Chapter 1 Managerial accounting, the business organization, and professional ethics
Management accounting: process or activity within an enterprise organization in which one is engaged in collecting,
organizing, analysing, and reporting (financial) information for planning and control by management. Unlike external
reporting is management accounting focusing on internal planning and control activities.
Management by exception: concentrating more on areas that deviate from the plan and less on areas that conform with
plans and are presumed to be running smoothly.
The value chain of business functions
Managers must recognize activities that are necessary for a company to create goods or services that it sells. These
activities comprise the value chain, the set of business functions or
activities that add value to the products or services of an organization.
It includes the following:
• Research and development: generation of ideas related to
new products, services, or processes
• Design: detailed design and engineering of products, services,
or processes
• Production: coordination and assembly of resources to
produce a product or deliver a service
• Marketing: methods by which customers learn about the
value and features of products or services (for example,
advertising or selling activities)
• Distribution: mechanisms by which a company delivers
products or services to the customer
• Customer service: support activities provided to the customer
Ethical conduct
The field that deals with human conduct in relation to what is morally good and bad, right, and wrong. It is the application
of values to decision making. These values include honesty, fairness, responsibility, respect, and compassion. Ethical
conduct includes:
- Competence: be a professional
- Confidentiality: keep information confidential
- Integrity: take your responsibility
- Credibility: fair and objective
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