1-1

Learning Objectives

Describe the position of the management accountant

in the organization structure of the business firm

Explain the role and relationship between the Chief

Financial and the Controller

Describe the functions and responsibilities of the

Controller as the top management accountant

1-2
 Learning Objectives
(continued)
Explain the role and relationship between the Chief
Financial and the Treasurer

Describe the functions and responsibilities of the

Treasurer

Understand the ethical standards for management

accountants.

1-3
 Learning Objectives
(continued)
Realize the need for a company code of conduct

Be familiar with typical ethical challenges that

management accountants encounter

Describe the international certifications that are

available for management accountants

1-4
 Management accounting is a profession
that involves partnering in management
decision making, devising planning and
performance management systems, and
providing expertise in financial reporting and
control to assist management in the
formulation and implementation of an
organization’s strategy.

1-5
 Typical Organization Chart
Chief Executive Officer (CEO)

Chief Financial Vice President Vice President

Officer (CFO) for Marketing for Operations

Controller Chief Information

Treasurer
Officer (CIO)

Cost Management
Financial Reporting
Financial Information Systems
Other Reporting Obligations (e.g., tax)
1-6
 CFO chief financial officer also called
the finance director in many countries- is the
executive responsible for overseeing the
financial operations of an organization.
Among the responsibilities of CFO include the
following areas:
•Controllership
•Treasury
•Risk Management
•Taxation
•Internal Audit 1-7
 Cost Management Information
Serves all management functions

Information a manager needs to manage

effectively
Financial and nonfinancial
 Financial information alone shows a short-term focus
Developed under the direction of the controller for
the Chief Financial Officer (CFO) of the organization

1-8
The Controller (also called the chief accounting
officer ) is the financial executive primarily
responsible for management accounting and
financial accounting .
The Controller as the chief management
accounting executive

1-9
The Controller as the Top Management Accountant
Controllership- is the practice of the established
science of control which is the process by which
management assures itself that the resources are
procured and utilized according to plans in order to
achieve the company’s objectives

1-10
 

Controller's Role in the Organization

Controllers work alongside or directly under an
organization's chief financial officer (CFO), providing key
financial information with an eye on future performance
and goals. While the traditional role of an accountant is to
show historical information reliably, the role of a controller
is to anticipate and highlight issues and opportunities
ahead.

1-11
Basic Functions of Controllership

 Planning
 Control
 Reporting
 Accounting
 Other Primary Responsibilities

1-12
 Cost Management vs.
Financial Reporting
Financial reporting
External users
Emphasis on accuracy and compliance
Cost management
Internal users
Emphasis on usefulness and timeliness, key
characteristics of decision-relevant information
Challenge for controller to reconcile these
potentially conflicting roles
1-13
THE CHIEF FINANCIAL OFFICER AND THE TREASURER
Treasurership- is concerned with the acquisition, financing and
management of assets of a business concern to maximize the wealth of
the firms for its owners.
Responsibilities

•Funds Procurement

•Banking and Custody of funds

•Investment Funds

•Operating Responsibilities
•
•
•
•
•

1-14
↓↓↓↓↓

COMPETENCE

CONFIDENTIALITY INTEGRITY

CREDIBILITY

1-15
https://www.questia.com
/magazine/1G1-556981
38/standards-of-ethical-
conduct-for-practitioners
-of

1-16
 IMA Statement of Ethical
Professional Practice
• Commitment to competence, integrity,
confidentiality, and credibility is necessary for the
management accountant to provide a useful service to
management
• When presented with an ethical issue that cannot be
resolved through the organization’s established
policies, the IMA suggests a three step process:
 Discuss the situation with a superior not involved in the issue
 Clarify the issue through discussion with an IMA Ethics
Counselor or impartial advisor
 Consult your own attorney as to your legal obligations and rights
1-17
 Professional Certifications

There are two important certifications that are

relevant for management accountants:

Certified Management Accountant (CMA)

Certified Public Accountant (CPA)

1-18
 Management Functions
Strategic management
Most important management function
Involves identifying and implementing goals and
action plans to maintain a competitive advantage
Monitoring of Critical Success Factors (CSFs) is
necessary
Critical to a firm’s success due to global competition
and rapidly changing markets

1-19
 Four Functions of Management

Cost management information is

assembled to aid management in the
following functions:
 Strategic management
 Planning and decision-making
 Management and operational control
 Preparation of financial statements

1-20
 Management Functions (continued)
Planning and decision-making
Information is needed to support recurring decisions
such as scheduling production and pricing
Information is needed for short-run planning
(budgeting) and profit planning (Cost-Volume-Profit
analysis)
Management and operational control
Information is needed to identify inefficient operations
and reward effective management practices
Preparation of financial statements
Information is needed to guarantee compliance with
regulatory reporting requirements

1-21