MANAGERIAL

ACCOUNTING
AS A CAREER
 PROFESSIONAL ETHICS
• The Institute of Management Accountants (IMA) of the
United States has developed a very useful ethical code
called the Standards of Ethical Conduct for Practitioners of
Management Accounting and Financial Management
• a) To maintain a high level of professional competence
• b) To treat sensitive matters with confidentiality
• c) To maintain personal integrity
• d) To be objective in all disclosing
 ETHICAL STANDARDS EXAMPLES

1. Suppose employees could not be trusted with

confidential information. Top managers would therefore be
reluctant to distribute confidential information within the company

2. Suppose employees accept bribes from

suppliers. Then contracts would tend to go to suppliers who pay the
highest bribe rather than to the most competent supplier
STANDARDS OF ETHICAL CONDUCT
FOR CMA & CPA
1. Competence – continuous development of knowledge &
skills;
2. Confidentiality – confidential information are kept;
3. Integrity – conflict of interest is avoided;
4. Objectivity – communicate information fairly & objectively;
5. Resolution and Ethical Conduct
 COMPANY CODE OF CONDUCT
A code of conduct defines how a company’s employees
should act on a day-to-day basis.
It reflects the organization’s daily operations, core values and
overall company culture. As a result, every code of conduct is
unique to the organization it represents.
• Customers Company’s Property
• Suppliers Property of Others
• Community Co- employees
• Head/ Superiors
 COMPANY CODE OF CONDUCT
Those who engage in unethical behavior often justify their
actions with one or more of the following reasons
1) The organization expects unethical behavior
2) Everyone else is unethical, and/or
3) Behaving unethically is the only way to get ahead.
 TYPICAL ETHICAL CHALLENGES
Case: A packaging supplier, bidding for a new contract,
offers the management accountant of the purchasing
company an all-expense paid weekend to Boracay Resort.
The supplier does not mention the new contract when
giving the invitation. The accountant is not a personal friend
of the supplier. He knows cost issues are critical in
approving the new contract and is concerned that the
supplier will ask for details about bids by competing
packaging companies.
 CODES OF CONDUCT ON THE INTERNATIONAL
LEVEL
July 1990-International Federation of Accountants (IFAC) in which the
Philippines through the PICPA is a member, issued the “Guideline on
Ethics for Professional Accountants”

The IFAC’s code also outlines the accountant’s ethical responsibilities

in matters dealing with taxes, fees and commissions, advertising and
solicitation, the handling of monies and cross-border activities

The Board of Accountancy of the PRC approved the implementation

of the Revised Code of Ethics for Professional Accountants in the
Philippines effective January 1, 2016.
 INTERNATIONAL CERTIFICATIONS
Certificate of Management Accounting (CMA)
One who has passed the rigorous qualifying examination, has met
an experience requirement, and participates in continuing educations.
He is granted by the Institute of Management Accountants (IMA).

Certificate in Public Accounting (CPA)

One who has met the pre-qualification educational requirements,
passed the CPA licensure examinations given by the Professional
Regulatory Board of Accountancy and has satisfied all other legal and
regulatory requirements of a public accountant.
 INTERNATIONAL CERTIFICATIONS
Certificate in Internal Auditing (CIA)
Develop effective systems to detect and prevent errors and fraud
in the accounting records, it is common for the management
accountant to have strong ties to the control oriented organization
such as the Institute of Internal Auditors (IIA) granting Certification
in Internal Auditing
INSTITUTE OF MANAGEMENT ACCOUNTANTS
(IMA)
Principal organization of management accountants in the US has
instituted a program to provide certifications for management
accountants and financial managers.
Certified Management Accountant (CMA) examination was first
given in 1972 which consists of the following
1. Economics, Finance, and Management
2. Financial Accounting & Reporting M
3. Management Reporting,Analysis and Behavioral Issues
4. Decisional Analysis & Information System.
 INSTITUTE OF MANAGEMENT ACCOUNTANTS
(IMA)
CMA Requirements-to earn the CMA, complete the following
steps
1. Apply for admission to the CMA program and register for the
CMA examination
2. Pass all four parts (above) of the CMA examination within a 3-
year period
3. Meet the accounting experience requirement before or within 7
years of passing the examination
4. Comply with the Standards of Ethical Conduct for Management
Accountants
 PHILIPPINE ASSOCIATION OF
MANAGEMENT ACCOUNTANTS (PAMA)
It is established in 1972 as the National Association of Accountants
(NAA) Philippine Chapter, Inc.
It is affiliated with NAA (National Association of Accountants)
New York .
It was founded to provide its members with educational and
professional activities that supplement in the knowledge of
management accounting practices and methods.
 CMA PROGRAM OBJECTIVES
1.To establish management accounting as a recognized
profession by identifying the role of the management accountant
and the underlying body of knowledge, and by outlining a course
of study by which such knowledge can be acquired. ;
2. To foster higher educational standards in the field of
management accounting;
2. To assist employees, educators and students by establishing an
objective measure of an individual’s knowledge and competence
in the field of management accounting.
 SOCIAL RESPONSIBILITY OF MANAGEMENT
ACCOUNTANT
Oversees managerial accounting activities and to function
optimally, a CMA needs to understand organizations and
their structure thru an organization chart which helps
define the lines of authority, delegation of authority, line
functions, and staff functions within an organization
As a member of the management team performs vital staff
functions.
 SOCIAL RESPONSIBILITY OF MANAGEMENT
ACCOUNTANT
Preparing reports, budgets and financial statements for
internal users of information
Communicates with external users about the financial
information fairly, objectively and competently prepared

Collaborates and participates in any aspects pertaining to

environment and social awareness that could bring
prosperity and rapid development of the society
 SERVICE INDUSTRY TRENDS
Manufacturing and production businesses use managerial
accounting tools to assess the cost of goods produced by
measuring operating expenses, labor and material costs
which is necessary for allocating funds as wells as
determining sales quotas to achieve a profit
Service industry is increasingly turning to management
accountants to provide the expertise to guide them
through these difficult economic times and on long-term,
sustainable success which created an environment where
management accountants are in demand
 SERVICE INDUSTRY TRENDS
These machines are arranged in groups called flexible
manufacturing system (FMS) because they can be
rearranged quickly to a desired configuration to perform a
needed production operation
Through the use of computer-integrated manufacturing
(CIM) and computer-aided manufacturing (CAD) these
firms use computers to link material-handling into the
proximity of a particular robot that then perform its
designated task.
CONTEMPORARY OR CHANGING OR TRENDING
SERVICE INDUSTRY ENVIRONMENT
1) An increase in global competition
2) Advances in manufacturing & service technologies
3) Advances in information technologies, the internet, & e-
commerce
4) A greater focus on the customer
5) New forms of management organization
6) Changes in the social, political, and cultural environment
 MANAGERIAL ACCOUNTING PRACTICES
1) Standard Costs : Basic tenet is the concept of standard
costs. These are determined by the practice of analyzing
various factors related to the business model, including
direct materials, direct labor and factory overhead.
After the analysis has been completed, the company assigns
a standard cost for various items and processes. The actual
costs related to the item or process is also tracked and
compared against standard costs. Cost accountants analyze
the variances to determine the root cause.
MANAGERIAL ACCOUNTING PRACTICES
MANAGERIAL ACCOUNTING PRACTICES?
 MANAGERIAL ACCOUNTING PRACTICES
2. Job Costing: Refers to tracking costs against a certain
job or project. Companies use labor time sheets and
material usage sheets to track the amount of labor and
materials used to complete the job.
This information is compiled on a job cost report, which is
used to analyze the profitability of the job. Many job cost
reports list the standard cost of the job and compare it to
the actual cost.
MANAGERIAL ACCOUNTING PRACTICES?
 MANAGERIAL ACCOUNTING PRACTICES
3. Variance analysis: Refers to researching the root causes
of a variance in management accounting. These variances are
often reported on the job cost report. Managerial
accountants are likely to find the root cause of a material
variance to be in the actual price or actual quantity of
materials used.
Since they use standard costs, a change in actual costs of a
material will result in a material variance. Labor variances
will appear when the # of hours worked exceed what was
projected or if the average actual rate varies from the
standard labor rate.
 MANAGERIAL ACCOUNTING PRACTICES
4. Cost Volume Profit Analysis :It is a practice that
attempts to describe the relationship of sales volume, selling
price, product cost and profitability.
The managerial accountant uses information gathered from
his research of costs and sales volume to determine the
impact on the profitability of the company if any changes
occur in sales volume, selling price, variable product cost and
fixed costs