Instructor Manual: Mowen/Hansen/Heitger, Managerial Accounting: The Cornerstone of Business Decision-Making, 9e, 9798214041902;
Chapter 01: Introduction to Managerial Accounting
Instructor Manual For
MOWEN/HANSEN/HEITGER, MANAGERIAL ACCOUNTING: T HE CORNERSTONE OF BUSINESS
DECISION -M AKING, 9E, 9798214041902; CHAPTER 01: INTRODUCTION TO M ANAGERIAL
ACCOUNTING
TABLE OF CONTENTS
Purpose and Perspective of the Chapter ................................................................................................... 2
Chapter Objectives ..................................................................................................................................... 2
Complete List of Chapter Activities and Assessments............................................................................. 2
Key Terms.................................................................................................................................................... 2
What's New in This Chapter ...................................................................................................................... 3
Chapter Outline .......................................................................................................................................... 4
Discussion Questions................................................................................................................................. 10
1
© 2026 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part. 1
, Instructor Manual: Mowen/Hansen/Heitger, Managerial Accounting: The Cornerstone of Business Decision-Making, 9e, 9798214041902;
Chapter 01: Introduction to Managerial Accounting
PURPOSE AND PERSPECTIVE OF THE CHAPTER
The purpose of this chapter is to explain the benefit of managerial accounting and how it provides
managers with information that improves decisions and creates organizational value.
CHAPTER OBJECTIVES
The following objectives are addressed in this chapter:
01.01. Explain the meaning of managerial accounting.
01.02. Explain the differences between managerial accounting and financial accounting.
01.03. Explain the current focus of managerial accounting.
01.04. Describe the role of managerial accountants in an organization.
01.05. Explain the importance of ethical behavior for managers and managerial accountants.
01.06. Identify three forms of certification available to managerial accountants.
COMPLETE LIST OF CHAPTER ACTIVITIES AND ASSESSMENTS
Please see the Educator Guide for a complete list of activities and assessments.
[return to top]
KEY TERMS
Certified Internal Auditor (CIA) has passed a comprehensive examination designed to ensure
technological competence and has at least two years of experience.
Certified Management Accountant (CMA) has passed a rigorous qualifying examination, met an
experience requirement, and participates in continuing education.
Certified Public Accountant (CPA) has passed a national examination and must be licensed by the state
in which he or she wishes to practice accounting (e.g., in audit, tax).
Continuous improvement searching for ways to increase the overall efficiency and productivity of
activities by reducing waste, increasing quality, and managing costs.
Controller the chief accounting officer in an organization.
Controlling the managerial activity of monitoring a plan‘s implementation and taking corrective action as
needed.
Decision-making the process of choosing among competing alternatives.
2
© 2026 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part. 2
, Instructor Manual: Mowen/Hansen/Heitger, Managerial Accounting: The Cornerstone of Business Decision-Making, 9e, 9798214041902;
Chapter 01: Introduction to Managerial Accounting
Ethical behavior choosing actions that are right, proper, and just.
Financial accounting a type of accounting focused primarily on the creation of financial information for
external users.
Lean accounting, an accounting practice that organizes costs according to the value chain to help
managers eliminate waste and, ultimately, reduce costs and improve financial performance.
Line positions positions that have direct responsibility for the basic objectives of an organization.
Managerial accounting a type of accounting focused primarily on providing internal users with the
necessary financial and nonfinancial information to help them make the best possible decisions for the
company.
Planning a management activity that involves the detailed formulation of action to achieve a particular
end.
Quality product or service a product or service that meets or exceeds customer expectations.
Sarbanes-Oxley Act (SOX) passed in response to revelations of misconduct and fraud by several well-
known firms, this legislation established stronger governmental regulation of public companies in the
United States, from enhanced oversight to increased auditor independence and tightened regulation of
corporate governance.
Staff positions positions that are supportive in nature and have only indirect responsibility for an
organization’s basic objectives.
Total quality management a management philosophy in which manufacturers strive to create an
environment that will enable workers to manufacture perfect (zero-defect) products.
Treasurer the individual responsible for the finance function; raises capital and manages cash and
investments.
Value chain, the set of activities required to design, develop, produce, market, and deliver products and
services, as well as provide support services to customers.
[return to top]
WHAT'S NEW IN THIS CHAPTER
See the Transition Guide for a list of improvements in this chapter from the previous edition.
[return to top]
3
© 2026 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part. 3
, Instructor Manual: Mowen/Hansen/Heitger, Managerial Accounting: The Cornerstone of Business Decision-Making, 9e, 9798214041902;
Chapter 01: Introduction to Managerial Accounting
CHAPTER OUTLINE
In the outline below, each element includes references (in parentheses) to related content. ―CH.##‖
refers to the chapter objective; ―PPT Slide #‖ refers to the slide number in the PowerPoint deck for this
chapter (provided in the PowerPoints section of the Instructor Resource Center). Introduce the chapter
and use the Ice Breaker (PPT Slide 3) if desired. Review learning objectives for Chapter 01. (PPT Slide
2).
I. The Meaning of Managerial Accounting (01.01, PPT Slides 4–9)
a. Managerial accounting is the provision of accounting information for a company‘s
internal users and is not bound by generally accepted accounting principles
(GAAP).
b. Managerial accounting has three broad objectives:
To provide information for planning the organization‘s actions
To provide information for controlling the organization‘s actions
To provide information for making effective decisions
c. Managers and empowered workers need comprehensive, up-to-date information
for the activities—planning, controlling, and decision making.
d. The detailed formulation of action to achieve a particular end is the
management activity called planning. Planning requires setting objectives and
identifying methods to achieve those objectives.
e. The managerial activity of monitoring a plan‘s implementation and taking
corrective action as needed is referred to as controlling. Control is usually
achieved by comparing actual performance with expected performance. This
information can be used to evaluate or correct the steps being taken to implement
a plan.
f. The process of choosing among competing alternatives is called decision-
making.
g. Discussion Activity 1: 10 minutes in total (PPT Slides 10–11)
Who needs the managerial accounting information in an organization?
Answer: Managerial accounting information is needed by a number of
individuals. In particular, managers and empowered workers need
comprehensive, up-to-date information for the following activities: (1) planning,
(2) controlling, (3) decision-making.
II. Financial Accounting and Managerial Accounting (01.02, PPT Slides 12–16)
a. There are two basic kinds of accounting information systems: financial
accounting and managerial accounting. The company‘s accounting system should
be designed to provide both financial and managerial accounting information.
b. Financial accounting is primarily concerned with producing information
(financial statements) for external users, including investors, creditors,
customers, suppliers, government agencies, and labor unions. This
information has a historical orientation and is used for such things as
4
© 2026 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part. 4
Chapter 01: Introduction to Managerial Accounting
Instructor Manual For
MOWEN/HANSEN/HEITGER, MANAGERIAL ACCOUNTING: T HE CORNERSTONE OF BUSINESS
DECISION -M AKING, 9E, 9798214041902; CHAPTER 01: INTRODUCTION TO M ANAGERIAL
ACCOUNTING
TABLE OF CONTENTS
Purpose and Perspective of the Chapter ................................................................................................... 2
Chapter Objectives ..................................................................................................................................... 2
Complete List of Chapter Activities and Assessments............................................................................. 2
Key Terms.................................................................................................................................................... 2
What's New in This Chapter ...................................................................................................................... 3
Chapter Outline .......................................................................................................................................... 4
Discussion Questions................................................................................................................................. 10
1
© 2026 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part. 1
, Instructor Manual: Mowen/Hansen/Heitger, Managerial Accounting: The Cornerstone of Business Decision-Making, 9e, 9798214041902;
Chapter 01: Introduction to Managerial Accounting
PURPOSE AND PERSPECTIVE OF THE CHAPTER
The purpose of this chapter is to explain the benefit of managerial accounting and how it provides
managers with information that improves decisions and creates organizational value.
CHAPTER OBJECTIVES
The following objectives are addressed in this chapter:
01.01. Explain the meaning of managerial accounting.
01.02. Explain the differences between managerial accounting and financial accounting.
01.03. Explain the current focus of managerial accounting.
01.04. Describe the role of managerial accountants in an organization.
01.05. Explain the importance of ethical behavior for managers and managerial accountants.
01.06. Identify three forms of certification available to managerial accountants.
COMPLETE LIST OF CHAPTER ACTIVITIES AND ASSESSMENTS
Please see the Educator Guide for a complete list of activities and assessments.
[return to top]
KEY TERMS
Certified Internal Auditor (CIA) has passed a comprehensive examination designed to ensure
technological competence and has at least two years of experience.
Certified Management Accountant (CMA) has passed a rigorous qualifying examination, met an
experience requirement, and participates in continuing education.
Certified Public Accountant (CPA) has passed a national examination and must be licensed by the state
in which he or she wishes to practice accounting (e.g., in audit, tax).
Continuous improvement searching for ways to increase the overall efficiency and productivity of
activities by reducing waste, increasing quality, and managing costs.
Controller the chief accounting officer in an organization.
Controlling the managerial activity of monitoring a plan‘s implementation and taking corrective action as
needed.
Decision-making the process of choosing among competing alternatives.
2
© 2026 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part. 2
, Instructor Manual: Mowen/Hansen/Heitger, Managerial Accounting: The Cornerstone of Business Decision-Making, 9e, 9798214041902;
Chapter 01: Introduction to Managerial Accounting
Ethical behavior choosing actions that are right, proper, and just.
Financial accounting a type of accounting focused primarily on the creation of financial information for
external users.
Lean accounting, an accounting practice that organizes costs according to the value chain to help
managers eliminate waste and, ultimately, reduce costs and improve financial performance.
Line positions positions that have direct responsibility for the basic objectives of an organization.
Managerial accounting a type of accounting focused primarily on providing internal users with the
necessary financial and nonfinancial information to help them make the best possible decisions for the
company.
Planning a management activity that involves the detailed formulation of action to achieve a particular
end.
Quality product or service a product or service that meets or exceeds customer expectations.
Sarbanes-Oxley Act (SOX) passed in response to revelations of misconduct and fraud by several well-
known firms, this legislation established stronger governmental regulation of public companies in the
United States, from enhanced oversight to increased auditor independence and tightened regulation of
corporate governance.
Staff positions positions that are supportive in nature and have only indirect responsibility for an
organization’s basic objectives.
Total quality management a management philosophy in which manufacturers strive to create an
environment that will enable workers to manufacture perfect (zero-defect) products.
Treasurer the individual responsible for the finance function; raises capital and manages cash and
investments.
Value chain, the set of activities required to design, develop, produce, market, and deliver products and
services, as well as provide support services to customers.
[return to top]
WHAT'S NEW IN THIS CHAPTER
See the Transition Guide for a list of improvements in this chapter from the previous edition.
[return to top]
3
© 2026 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part. 3
, Instructor Manual: Mowen/Hansen/Heitger, Managerial Accounting: The Cornerstone of Business Decision-Making, 9e, 9798214041902;
Chapter 01: Introduction to Managerial Accounting
CHAPTER OUTLINE
In the outline below, each element includes references (in parentheses) to related content. ―CH.##‖
refers to the chapter objective; ―PPT Slide #‖ refers to the slide number in the PowerPoint deck for this
chapter (provided in the PowerPoints section of the Instructor Resource Center). Introduce the chapter
and use the Ice Breaker (PPT Slide 3) if desired. Review learning objectives for Chapter 01. (PPT Slide
2).
I. The Meaning of Managerial Accounting (01.01, PPT Slides 4–9)
a. Managerial accounting is the provision of accounting information for a company‘s
internal users and is not bound by generally accepted accounting principles
(GAAP).
b. Managerial accounting has three broad objectives:
To provide information for planning the organization‘s actions
To provide information for controlling the organization‘s actions
To provide information for making effective decisions
c. Managers and empowered workers need comprehensive, up-to-date information
for the activities—planning, controlling, and decision making.
d. The detailed formulation of action to achieve a particular end is the
management activity called planning. Planning requires setting objectives and
identifying methods to achieve those objectives.
e. The managerial activity of monitoring a plan‘s implementation and taking
corrective action as needed is referred to as controlling. Control is usually
achieved by comparing actual performance with expected performance. This
information can be used to evaluate or correct the steps being taken to implement
a plan.
f. The process of choosing among competing alternatives is called decision-
making.
g. Discussion Activity 1: 10 minutes in total (PPT Slides 10–11)
Who needs the managerial accounting information in an organization?
Answer: Managerial accounting information is needed by a number of
individuals. In particular, managers and empowered workers need
comprehensive, up-to-date information for the following activities: (1) planning,
(2) controlling, (3) decision-making.
II. Financial Accounting and Managerial Accounting (01.02, PPT Slides 12–16)
a. There are two basic kinds of accounting information systems: financial
accounting and managerial accounting. The company‘s accounting system should
be designed to provide both financial and managerial accounting information.
b. Financial accounting is primarily concerned with producing information
(financial statements) for external users, including investors, creditors,
customers, suppliers, government agencies, and labor unions. This
information has a historical orientation and is used for such things as
4
© 2026 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part. 4
