Chapter 1 – The Roles of Managerial Accounting Information
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CHAPTER ONE
Introduction to Managerial Accounting
Chapter one covers the many roles that managerial accounting information plays
in decision making. Because the emphasis in this text is decision making,
students should have an understanding of the material in this chapter in order to
be successful in the course.
Key Concepts
• Accounting information includes both financial and nonfinancial
information used by decision makers.
Learning Objectives
LO1— Describe the contemporary view of accounting information systems and
describe and give examples of financial and nonfinancial accounting
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Lecture Outline
A. Accounting Information (LO1)
1. Accounting information is provided by the accounting information
2. Enterprise resource planning (ERP) systems have been developed in
an attempt to address the shortcomings of traditional accounting
information systems. ERP systems integrate traditional AIS with
B. A Comparison of Financial and Managerial Accounting (LO2)
Key Concept
1. External users
Chapter 1 – The Roles of Managerial Accounting Information
a. Stockholders, potential investors, creditors, governmental taxing
agencies and regulators, suppliers, and customers are external
users.
2. Internal Users
a. Employees, teams, departments, regions, and top management
3. The Functional Areas of Management
a. The operations and production function: These managers need
accounting information to make planning decisions affecting how
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c. The finance function: Accounting information helps finance
4. The Information Needs of Internal and External Users
a. Exhibit 1-2 summarizes the external and internal users of
accounting information, the type of information typically needed
5. The Role of the Managerial Accountant
a. Managerial accountants are no longer the “bean counters” or
Accountants have become decision-support specialists
C. Relevant Factors and Decision Making (LO3)
2. Sunk costs are costs that have already been incurred. They are
Chapter 1 – The Roles of Managerial Accounting Information
3. Opportunity costs are benefits forgone by choosing one alternative
over another. They are relevant costs for decisions making.
D. Ethics and Decision Making (LO4)
a. In today’s business environment, companies have to be aware
1. Ethics Programs: Companies frequently create ethics programs to
2. Corporate Wrongdoing
a. Even though companies establish ethics programs to encourage
MAKING IT REAL
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Key Concept
Key Concept
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3. Sarbanes-Oxley Act of 2002
a. It was passed as a response to corporate scandals which began
(3) companies to establish procedures to allow employees to
make complaints about accounting and auditing matters directly
to members of the audit committee.
End of Chapter Material
The idea behind this chapter is to introduce the topic to students and generate