management accounting

1. 1
SUNARTO
Management Accounting

3. 3
Management Accounting
• Internal accounting system
• Designed to support the information
needs of managers

4. 4
Management Accounting
is not bound by GAAP
(Generally Accepted
Accounting Principles)
Generally
Accepted
Accounting
Principles
Management Accounting

5. OutputsProcessesInputs
Economic
Events
Collecting
Measuring
Storing
Analyzing
Reporting
Managing
Special Reports
Product Costs
Customer Costs
Budgets
Performance Reports
Personal Communication
Users
Management Accounting
Information System

6. 6
Three broad objectives
To provide information for costing out…
Services Products Other objects of
interest to
management
Objective 1

7. 7
To provide information for…
Continuous
Improvement
Planning
Evaluation
Controlling
Three broad objectives
Objective 2

8. 8
To provide information for…
Decision
Making
Three broad objectives
Objective 3

9. 9
Focuses on
the external
user
Financial Accounting Management Accounting
Focuses on
the internal
user
Differences in Targeted
Users

10. 10
Must follow
GAAP
Financial Accounting Management Accounting
No
guidelines
that it must
follow
Differences in Restrictions

11. 11
Produces
objective
and
verifiable
financial
information
Financial Accounting Management Accounting
May be
financial or
nonfinancial.
Much more
subjective
Differences in Types of
Information

12. 12
Reports on
events that
have
already
happened
Financial Accounting Management Accounting
Includes
historical,
but focuses
on future
events
Differences in Time
Orientation

13. 13
Focuses on
overall firm
performance
(a more
aggregated
viewpoint).
Financial Accounting Management Accounting
Focuses on
performance
of…
entities, product
lines,
departments and
managers
Differences in Degree of
Aggregation

14. Current Focus of Management
Accounting
Activity-Based Management
Activity-based management is a system
wide, integrated approach that focuses
management’s attention on activities with
the objective of improving customer
value and the resulting profit.

15. Current Focus of Management
Accounting
Customer Orientation
Customer value is the difference
between what the customer receives
(customer satisfaction) and what the
customer gives up (customer sacrifice).
What is received is called the total
product.

16. Advantage comes when company can
create better customer value
Customer
Value
What
Customer
Receives
= -
What
Customer
Gives Up
Customer Orientation

17. Current Focus of Management
Accounting
Strategic Positioning
Strategic cost management is the use
of cost data to develop and identify
superior strategies that will produce a
sustainable competitive advantage.

18. Superior
Products through
differentiation
Cost
Leadership
Strategies that will produce a
sustainable competitive advantage

19. Current Focus of Management
Accounting
Value-Chain Framework
The internal value chain is the set of
activities required to design, develop,
produce, market, and deliver products and
services to customers.
The industrial value chain is the linked set of
value-creating activities from basic raw
materials to the disposal to the final
products by end-use customers.

20. Supermarkets
Value Chain:
Apple Industry
Planting and
Cultivating
Harvesting
Distribution of
Apples
Applesauce
Production
Applesauce
Distribution
Firm
B
Firm
C
Firm A
Product Disposal
End-Use
Customer

21. Managing the value chain means
that a management accountant must
understand many functions of the
business, from manufacturing to
marketing.
Current Focus of Management
Accounting
Cross functional persfective

22. The philosophy of total quality
management is to manufacture
perfect products.
This emphasis on quality has created
a demand for management
accounting systems that provide
financial and nonfinancial information
about quality.
Current Focus of Management
Accounting
Total quality management

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1. Time becomes a competitive
advantage for the firm who an
compress the value chain
2. Improving efficiency for profit
performance
3. E-business for cost reduction
Current Focus of Management
Accounting

24. The role of
management
accountants in
an organization
is one of
support.
The role of management
accountants

25. Partial Organization Chart,
Manufacturing Company
President
Production
Vice President
Line Function
Financial Vice
President
Staff Function
Production
Supervisor
Machining
Foreman
Assembly
Foreman
Controller Treasurer
Internal
Audit
Cost Financial Systems Tax

26. Ethical Behavior
Michael Josephson’s* Ten Ethical Values:
Honesty
Integrity
Promise keeping
Fidelity
Fairness
Caring for others
Respect for others
Responsible citizenship
Pursuit of excellence
Accountability
*Michael Josephson, “Teaching Ethical Decision Making and
Principled Reasoning”

27. • CMA: One of the main purposes of the CMA was to
establish management accounting as a recognized,
professional discipline, separate from the profession
of public accounting.
• CPA: The responsibility of a CPA is to provide
assurance concerning the reliability of financial
statements.
• CIA: The focus of the CIA is to recognize
competency in internal auditing rather than external
auditing as with the CPA.
Professional Certifications

28. The CMA
Four areas emphasized on the
exam:
1) Economics, finance, and management
2) Financial accounting and reporting
3) Management report, analysis, and behavioral issues
4) Decision analysis and information systems

29. 29
“Tidak Belajar Sehari adalah Sebuah Kesalahan”
“Tidak Belajar Seminggu adalah Sebuah Kebodohan”
“Tidak Belajar Setahun adalah Sebuah Kemiskinan dan
Kemelaratan”
“Dan TIDAK BELAJAR Seumur Hidup adalah Sebuah
Warisan Yang Berbahaya buat Keturunan”
CLOSING REMARK

30. 25 YEARS ON
SURVIVAL!Setiap pagi di Afrika,
seekor Gazele bangun,
ia tahu harus selalu lari lebih cepat
dari Singa yg tercepat, atau
dia mati dimakan Singa
Setiap pagi di Afrika, seekor
Singa bangun, dia tahu dia harus
mampu lari lebih cepat dari Gazel
yang paling lambat atau kelaparan
Tidak jadi soal apakah Anda
Gazele atau Singa
Begitu matahari terbit
Anda harus mampu berlari dengan
cepat.
Closing remark

31. Akhir Pertemuan Hari Ini
Thank You