Exam 1: The Changing Role of Managerial Accounting in a Dynamic Business Environment

In a number of companies, managerial accountants are most likely found in cross-functional teams with personnel having a background in:

Many professions have adopted a series of ethical standards to provide guidance for their memberships.The Institute of Management Accountants (IMA), for example, has published standards that focus on competence, confidentiality, integrity, and credibility.In light of these standards, consider the three cases that follow. Case A-Leston Corporation has experienced serious financial difficulties in recent years.John Young, the company's chief financial officer, has just learned that a major competitor was likely to file for bankruptcy; however, he failed to disclose this information at a board meeting held later that day when a plant closure decision was being discussed.The board evaluated several proposals during the session that focused on improving Leston's financial position. Case B-QBX Company manufactures fertilizer from various raw materials, including a raw material know as Felstar.Paul Kelly, the firm's purchasing manager, purposely acquired a lower grade of Felstar than normal because of a very attractive price.The lower-grade product resulted in increased usage during the manufacturing process but had no effect on the fertilizer's overall quality.An end-of-period report showed that QBX profited from Kelly's actions, with the overall savings in purchase price more than offsetting the cost of added consumption. Case C-Central Distributing has a participative budgeting process, allowing employees to have a say in projected sales targets for the upcoming period.These targets are reflected in a series of performance reports that compare actual sales achieved against targeted amounts.Hillary Baxter submitted very low sales targets because, as she confided in a colleague, "I always want to look good in terms of meeting targets, even if anticipated sales and closures don't materialize." Required: Evaluate the three cases and determine the ethical issues, if any, which are involved.Cite the IMA's standards if appropriate.

The vast amount of data generated by an organization along with supplemental data that can provide context for the internal data is known together as:

Transformation of the role of the managerial accountant within leading-edge companies has been

Which of the following statements represents a similarity between financial and managerial accounting?

Give examples of each of the four primary management activities in the context of a national pizza franchise.

All companies define the value chain in the same way.

A company's leading executive is:

Briefly distinguish between managerial accounting and financial accounting.Be sure to comment on the general focus, users, and regulation related to the two fields.

State Hospital was once the premier health facility in the Yesville community.Unfortunately, budget cuts and the loss of strategic personnel due to non-competitive salaries have taken a toll on the hospital.The hospital decided to align current strategic goals using the Balanced Scorecard approach.These goals are: Financial: Balance revenue and Cost to break-even, leading to profit. Customer: Create new value for customer. Internal process: Ensure service quality and expand service networks. Learning and growth: Work toward more employees becoming leaders. Based on these goals, the hospital developed Objectives for the new balanced scorecard as follows: Financial Perspectives: Enhance operational excellence and cost management. Customer Perspectives: Investigate customer needs. Internal Process Perspectives: Enhance the combined professional service quality. Learning and Growth Perspectives: (1) Enhance employee satisfaction; and (2) Slow down the expansion of operating activity. Required: Given these objectives, list at least (5) measurements for each perspective.

Criticisms leveled at the audit firm, Arthur Andersen, in its original conviction after the 2001 Enron scandal led Congress to pass:

Non-value-added costs are the costs of activities that can be eliminated with no deterioration of product quality, performance, or perceived value.

Consider the descriptors that follow. 1.Is heavily involved with the recordkeeping and reporting of assets, liabilities, and stockholders' equity. 2.Focuses on planning, decision making, directing, and control. 3.Is heavily regulated. 4.A field that is becoming more "cross-functional" in nature. 5.Much of the field is based on costs and benefits. 6.Is involved almost exclusively with past transactions and events. 7.Much of the information provided is directed toward stockholders, financial analysts, creditors, and other external parties. 8.Tends to focus more on subunits within an entity rather than the organization as a whole. 9.May become involved with measures of customer satisfaction, and the amount of actual cost incurred vs.budgeted targets. Required: Determine whether the descriptors are most closely associated with financial accounting or managerial accounting.

Which of the following employees at Clear Flights would not be considered as holding a line position?

Which of the following characteristic(s) relate(s) more to managerial accounting than to financial accounting?

Legitimate ethical issues rarely impact the managerial accountant.

In order for a company to achieve a sustainable competitive advantage, it must:

The CMA is a professional certification that managerial accountants can earn to validate their skills and the specialized knowledge that they possess.

In order for a company to achieve a sustainable competitive advantage, it must perform value chain activities: I.at the same quality level as competitors, at the same cost. II.at the same quality level as competitors, but at a lower cost. III.at a higher quality level than competitors, at a higher cost. IV.at a higher quality level than competitors, but at no greater cost.

The role of managerial accounting information in assisting management is a(n):