From: Sr. Management
Date: January 13, 2013
Subject: Managerial Accountant
Managerial accounting’s focus is the use of economic and financial information in order to support management in making decisions (Vitez). It plays an important role in: * Planning and coordination with production * Marketing functions * Financial functions
This position will also focus on the determination and accumulation of products, processes, and service costs (cost accounting). A managerial accountant will be the individual to take the proactive approach of tackling business and economic troubles by planning, organizing, and controlling business activities in order for us the company to achieve the desired goals.
An internal managerial system is used to provide the financial information required in order for management to make good decisions. Although the functionality and reporting mechanism vary according to the industry, the objective is the same; it provides the financial information to the management team in order to assist in the decision making for the company’s future (Wild & Shaw, 2012).
This system not only has the ability to provide the financials of the business but also the internal operations data. For example, in updating processes, the internal managerial system has the functionality to provide the required report information to the manufacturing manager that in turn provides the amount of materials currently being used during a specific process in production. This is the required first step in changing internal processes in order to increase production and revenue. Another example is a hospital, the medical record department is responsible for coding charts for billing purposes and closing the final unbilled report to show a zero balance which has to be completed on a weekly basis. This report provides the required information to management in making the decision to approve overtime, reevaluate the employment of workers due to production, and the processes in place.
The most significant characteristic of internal accounting systems include the following: * Association with decision making influence * Ability to measure effectiveness * Capacity to measure efficiency
The company needs to have a clear understanding of the financial health in order to make credit and investment decisions (Wild & Shaw, 2012). It evaluates the time and obscurity of prospective cash flow. It also allows stakeholders to review the financial information and decide whether to invest or continue to invest into the company.
Business ethics refer to the moral rules and regulations that govern the business world; they guide the way businesses make decisions (“Ethics in accounting”); therefore accounting professionals are held to the same ethical standards as physicians in the medical field and are expected to be: * Objective * Reliable * Competent * Trustworthy
Integrity in financial reporting is