Chapter01.the Changing Role of Managerial Accounting in a Dynamic Business Environment

Managerial accounting provides essential data about the functions within the business. The reports that are provided by the managerial accountants focus on the performance of the business and the business environment. Managerial accounting is manager oriented and managerial accounting focus on the accounting duties of a manager. Managerial accounting is used on a day to day operation providing an analysis of cost and the cost benefits. Managerial accounting function as a source for the business developments and the capital budgeting. The primary concern with managerial accounting is to provide positive outcomes in the business production and the profit.

Accountants are responsible in analyzing and assessing the revenue, expenses, reporting financial matters and giving advice about the financial health of their employer. They help their client to know the best way to run a business by tracking and analyzing where does the money of the business go. They also give suggestions on where money could be made and advice in budgeting the money in the business.

Bubba, I am writing this memo so that you can further understand the problem that you are encountering. You want to receive further funding in order for your restaurant to grow and expand across the country. The issue that the bank is having with you and the restaurant is that you are not supplying sufficient evidence for them to decide whether or not they want to grant the loan to you to expand your restaurant. Before the bank can decide on your loan, they require financial statements documenting the revenues, profits, and assets of your restaurant. These statements show the bank if you possess enough funds in order to pay back the loan but they also use it to measure the amount of potential for the restaurant because whenever a bank grants a loan to a business or business owner, they are making an investment in that individual or business.

Which of the following would not be considered an external user of accounting data for the Julian Company?

“The accounting system generates the information that satisfies two reporting needs that coexist within an organization: financial accounting and managerial accounting” (Schneider, 2012, ch 1.1, para 1). Managerial accounting is the process of preparing reports and accounts required by management to make business decisions for daily, weekly, monthly, and yearly projects. Financial accounting is the branch of accounting that organizes accounting information for presentation to interested parties outside of the organization. Financial accountants produce annual reports for external

 Managerial accounting is defined as the activities carried out in a firm to provide its managers and other employees with financial and related information to help them make strategic, organizational, and operational decisions.

Which one of the following users of accounting information is considered to be an external user of accounting information rather than an internal user of accounting information?

Managerial accounting involves planning, controlling and decision making processes that are very helpful in business major such as marketing, operations management and human resource management. For example, marketing managers make planning decisions related to allocating advertising dollars across various communication mediums and to staffing new sales territories. From a control standpoint, they may closely track sales data to see if a budgeted price cut is generating an anticipated increase in unit sales. Operations managers have to plan how many units to produce to satisfy anticipated customer demand. They also need to budget for operating expenses such as utilities, supplies, and labor costs. In terms of control, they monitor actual spending relative to the budget, and closely watch operational measures such as the number of defects produced relative to the plan. Human resource

A financial report that summarizes the amounts and types of costs that were incurred in the manufacturing process during the period is a: Manufacturing statement.

Consequently, accountants are quite important to a business society being able to function. Even the smallest of businesses need an accountant. Their careers serve various purposes in a business from recording profits and other numbers to helping construct budget decisions that influence how well the business will run and prosper. Businesses need to price their products and consider using three elements of cost, overhead, and profit margin. An accountant can create

Baruch Lev and Feng Gu authors of “The End of Accounting and The Path Forward for Investors and Managers” indicate that over the past 110 years, the structure and content of financial reports has not changed, and that the role that these reports play in influencing the decisions of investors has greatly diminished. Lev and Gu make a case that non-transaction events that are not captured by the financial reports such as those disclosed through 8-k filings with the Securities and Exchange Commission (“SEC”) have a greater impact on stock prices, and thus more useful to investors. In addition, they suggest that one of reasons for the decline in usefulness of financial reports stems from the increase of estimates that has made its way into these reports (Lev and Gu 2016).

Company operates in the Industrial Sector – Services, and Industry – Regional Airlines. According to the Standard Industrial Classification System (SIC), company belongs to the industry group 451: Air

Feedback: Internal users of accounting information systems include boards of directors, chief executive officers, business unit managers, plant managers, store managers, and line supervisors. LO 4

For instance, the concept of cost estimation which assists in estimating future expenditure as the expenditure depends on the cost of the respective activities can be applied in the setting of a budget which is simply an estimate and schedule of all costs required to be assigned to an activity. One can make an estimation of the resources required for an activity by applying the cost estimation techniques. Since there are limiting factors to each activity such as scarcity of resources for activities, the concept of constraints can be applied together with the concept of cost volume profit analysis to ensure that maximum benefits are driven from the scarce resources and the number of activities that are available. This facilitates the allocation of resources that most equitable and profitable. The theory of constraints is also applicable in the process of setting up budgets. In setting up budget one considers the amount of resources that are available and cannot therefore set a budget plan that exceeds the amount of resources that are available. This implies that the budget is constrained by the amount of

The Burns and Scapens framework for analyzing managerial accounting change was built on the study of old institutional economics, which sees "economics as a process of social provision, subject to multiple and cumulative causation." This view culminates in a model that argues that the managerial accounting practices at institutions are subject to a process of constant change, influenced by routines and rules. The institutions contribute to these routines and rules, but so do actions on the part of managers within the institutions. By combining multiple influences over time, we arrive at modern managerial accounting practice. In other words, Burns and Scapens tells us that managerial accounting practice changes over time, influenced by a number of factors including rules, routines and actions.