ACC 6140 CMU Wk 1 Roles of A Managerial Accountant Discussion & Responses
Learning Engagement, Week 1:
The managerial accountant uses the results of financial operations to plan, control, and provide decision-making opportunities for senior management.
Describe each of these roles individually, using examples to illustrate what ‘planning’, control, and decision-making mean.
When is it appropriate for a managerial accountant to use predications or estimates in their role? Provide examples.
PROFESSOR'S GUIDANCE FOR THIS WEEK'S LE:
Managerial Accountants are in all industries, and even in departments other than Finance or Accounting! These individuals provide an interpretation of the results of historical financial transactions and events of a company. This information, along with the mission/vision/goals of the company are used to develop forward-thinking estimates and predictions of future fiscal periods. Their work is internal by nature, meaning that their reports are not disclosed to external users of financial information.
It is important to understand that Managerial Accountants work alongside senior management staff across all departments in monitoring costs, budgets, sales, etc. to identify improvements to the organization. For example, the head of the factory floor may want to know how to create greater productivity of their employees. Managerial Accountants may observe employees’ time processes, review operational procedures, or develop cost/sales comparisons to determine if changes need to be made. They may recommend additional training, where to minimize potential bottlenecks, or even offer suggestions of new equipment.
They are also responsible for managing risk, planning, strategizing, and decision making
1. Please make sure that you read the relevant chapter from the textbook
2. Watch the YouTube videos for this week and additional course material provide
3. Ensure that you can communicate your point of view clearly and without ambiguity. Provide one example to strengthen your point of view in the main discussion.
POST
by Leiliane Guimaraes As Wild & Shaw (2016) has described, managerial accounting is an activity that provides financial and non-financial information, with the purpose to provide useful information to managers of an organization using three essential tasks: Planning: involves establishing goals through budgets developed to measure the achievement (Farhat's Accounting, 2014), specifying how - marketing, sales, web advertising, for example. With long-term plans taken, companies set short-term plans (Wild & Shaw, 2016).Controlling: it gathers feedback to ensure plains are being followed and that managers are integrating the structures, the processes, and the activities performed by the people in a company (Charifzadeh & Tasher, 2017). This analysis includes the check if the activities are making the company on or out of track.Decision-making: involves making a selection among competing alternatives. It helps the company determine what should be done next, such as what to sell and how to execute. However, predictions and estimates are helpful when significant changes occur—new products, new competitive strategies. In events and transactions, it can be used to value assets, and liabilities are essential under certain circumstances. This techniques also measures those items in accounting that have no accurate way of quantification and are therefore estimated based on judgment and knowledge derived from past experience.Here are some of the guides for estimates and predictions:Warranty Estimates:Companies that provide warranties have to establish warranty-related costs. Ford, for example, forecasts these warranty and field service action obligations using a patterned estimation model, as described below (Mukhopadhyay & Vaidya, 2021).Credit LossesThe credit loss is the change in the provision for credit losses at prior period exchange rates. For analysis purposes, Ford management splits the provision for credit losses into net charge-offs and the change in the allowance for credit losses (Mukhopadhyay & Vaidya, 2021).Charifzadeh, M. Tasher, A. 2017. Management, Accounting, and Control. Tools and concepts in a central European context. https://application.wiley-vch.de/books/sample/3527...Farhat's Accounting. 2014. Planning, Controlling, and Decision Making. Managerial Accounting. February 28, 2022. Youtube: Mukhopadhyay, S. Vaidya, D. 2021. Accounting Estimates. What is accounting estimates - Illustration. February 28, 2022. https://www.wallstreetmojo.com/accounting-estimate...Wild, J. Shaw, Ken. 2016. Managerial Accounting concepts and principles. Managerial Accounting (5th ed.). Mc Graw Hill Education. 376 words
by Thanyathorn Lapthitisate For effective management of any firm, especially in accounting, planning, control, and prompt decision-making are essential. To do all these efficiently, the managerial accountant has to use the results of all the financial operations. When it comes to planning, one has to use the previous results to estimate the future and plan for it effectively. Planning is the action of determining the steps or actions that meet the strategic goal of a company (Hansen & Mowen, 2007). While planning for the future, managers predict results and strategize around those results. For example, planning is when the managerial accountant sets aside funds to cater to unforeseen emergencies. A good planner tends to predict outcomes under various alternative conditions. Control is the act of ensuring that the day-to-day activities go as planned or as expected. Control is coordination and evaluation of how the plans are implemented effectively to achieve the set goals. Effective control in management involves monitoring, correcting actual results, and evaluating, and to do all these, one has to rely on feedback (Argyris, 1990) heavily. A good example is when a project is underway, and it has to be monitored closely to ensure that everything is moving according to the plan. If something is amiss, the correction must be done immediately. Accounting managers often have to make decisions that mainly choose the best course of action amongst many alternatives. In accounting, it is safe to assume that the best decision leads to the least cost or bears the most revenue (Weygandt, Kimmel & Kieso, 2009). For instance, if there is a decision to choose the contractor to award a tender to, one will most likely decide to award the tender to the one with a lower price quotation if the quality of work is constant. Even though managerial accountants often rely on financial operations results, sometimes they have to rely on predictions and estimates to do their job. For example, when a project is new and has no means of comparing costs, estimations and forecasts are the only tools applicable for planning and decision-making.ReferencesArgyris, C. (1990). The dilemma of implementing controls: the case of managerial accounting. In Readings in accounting for management control (pp. 669-680). Springer, Boston, MA.Hansen, D. R., & Mowen, M. M. (2007). Managerial accounting. South-Western.Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2009). Managerial accounting: tools for business decision making. John Wiley & Sons.