INTRODUCTION TO

MANAGEMENT ACCOUNTING AND

STRATEGIC COST MANAGEMENT
LESSON 1 MANAGEMENT ACCOUNTING
ENVIRONMENTAL

LESSON OBJECTIVES
• Define management accounting
• Discuss the relevance of management
accounting information with the management
process and activities
 MANAGEMENT ACCOUNTING PROVIDES
THE FINANCIAL INFORMATION AND ANALYSIS
THAT HELPS MANAGERS MAKE INFORMED
DECISIONS TO RUN THE BUSINESS MORE
EFFECTIVELY AND PROFITABLY.
MANAGEMENT ACCOUNTING THREE
BASIC ROLES

• FINANCIAL REPORTING AND EXPERTISE

• FORMULATION AND IMPLEMENTATION OF STATEGIES
• PART OF MANAGEMENT TEAMS AT ALL LEVELS OF THE
INFORMATION CHAIN
Management accounting information is incredibly
relevant to the entire management process.

1. Planning: The process of setting goals and objectives

and determining the best course of action to achieve
them.

2. Executing: Putting the plan into action. This involves

mobilizing resources, assigning tasks, and guiding the team
towards achieving the objectives.
3. Decision Making: The process of selecting the best
course of action from among available alternatives

4. Controlling: The process of monitoring progress,

comparing actual results to the plan, and taking
corrective action as needed.
LESSON 2 : STRATEGIC COST MANAGEMENT

LESSON OBJECTIVES
• Discuss various contemporary management and cost
accounting concepts such as activity-based costing,
target costing, kaizen costing, total quality
management, benchmarking, process reengineering,
just-in-time, six sigma, life-cycle costing, and theory
of constraints.
• Describe how the value and supply chains work.
 Strategic Cost Management is the process of
controlling and reducing business costs while aligning
cost management efforts with the overall business
strategy.
DIFFERENT COST CONTROL TECNIQUES

cost control techniques are essential for any business

that wants to remain competitive, profitable, and
financially stable. By effectively managing costs,
businesses can achieve their financial goals and
ensure long-term success.
1.Activity-Based Costing (ABC)
A costing method that assigns overhead costs to products or
services based on the activities that consume those
resources. It provides a more accurate picture of product
costs compared to traditional methods.

2. Activity-Based Management (ABM)

helps organizations understand and manage the costs of
their activities, leading to more informed decisions about
resource allocation and process improvement.
3. Target Costing
Determines the desired cost for a product based on its
target selling price and desired profit margin. This forces
companies to innovate and reduce costs during the
product design and development phase.

4. Kaizen Costing
Focuses on continuous cost reduction through small,
incremental improvements. It emphasizes employee
involvement and ongoing efforts to identify and eliminate
waste.
5. Total-Quality Management (TQM)
focuses on creating a culture of continuous improvement
and customer satisfaction throughout the entire
organization.

6. Benchmarking
Comparing an organization's performance against that of
best-in-class competitors or other leading organizations. It
helps identify and learn from best practices to improve
internal processes and performance.
7. Process Reengineering
Fundamentally rethinking and redesigning business processes
to achieve dramatic improvements in performance.

8. Just-In-Time (JIT)
Producing goods only when they are needed, minimizing
inventory levels.

9. Balanced Scorecard
is a strategic performance management tool that helps
organizations track their progress towards achieving their
strategic goals.
10. Six Sigma
A data-driven approach to quality improvement that
aims to reduce defects and variability in processes.

11. Life-Cycle Costing

Considering all costs associated with a product or service
over its entire life cycle, from design and development to
production, distribution, use, and disposal.
The Theory of Constraints (TOC) is a
management philosophy that focuses on
identifying and overcoming the most
significant bottleneck or limiting factor
within a system.
The value chain provides a framework for
understanding how all activities within a
business contribute to creating value for
customers.
The supply chain focuses on the operational
aspects of delivering products or services,
ensuring efficient and effective flow
throughout the network.
Primary Activities: Directly involved in
creating and delivering the product/service.
• Inbound Logistics: Receiving, storing, and
handling raw materials.
• Operations: Transforming inputs into finished
goods or services.
• Outbound Logistics: Warehousing, distribution,
and delivery to customers.
• Marketing & Sales: Promoting, selling, and
pricing the product/service.
• Customer Service: Providing after-sales
support, maintenance, and repairs.
Support Activities: Enable primary activities.
• Procurement: Sourcing raw materials and
components.
• Technology Development: Research &
Development, process innovation.
• Human Resource Management: Recruiting,
training, and managing employees.
• Firm Infrastructure: General management,
finance, accounting, legal.
 LESSON 3: DIFFERENT
BRANCHES OF
ACCOUNTING AND THE
ORGANIZATION
LESSON OBJECTIVES

• Differentiate the branches of

accounting
• Define the role of management
accountant in a corporate structure
 FINAL, COST, AND
MANAGERIAL ACCOUNTING
• Accounting, as a science, has different branches.
However, it is to be emphasized that the main
objective is still to provide financial information; it
is just that the nature and focus of the financial
information will change depending on the branch
of accounting. Nowadays, accounting information
system and accounting research are considered as
branches.
 THE FINANCE DEPARTMENT
• The Chief Financial Officer or CFO usually reports
directly to the chief executive officer or president. The
CFO is mainly responsible for the different financial
matters and risk of the firm. The CFO, or sometimes
being referred to as the vice president to finance,
delegates his/her responsibilities to the controller and
the treasurer. The table below shows the comparison
between the controller and the treasurer.
 STAFF MANAGER
• The finance department (CFO, Controller, and Treasurer),
together with the head of the human resources division,
are considered a staff department. Their job is to support
the organization in terms of its financial needs and
transactions. The chief executive officer, chief operating
officer, and head of marketing and sales are occupying
line positions since they are directly involved in the
achievement of the goals of the organization of earning
profit through the purchasing and selling of goods.
Lesson 4 Code of Ethics
for Management
Accountants
LESSON OBJECTIVES

Identify the ethical requirements

for management accountant
Introduction

Management accountants should behave

ethically. They have an obligation to follow
the highest standards of ethical
responsibility and maintain good
professional image.
The Institute of Management Accountants
(IMA) has developed standards of ethical
professional conduct. The IMA Statement of
Ethical Professional Practice has been
revered as the central code of ethics for
management accountants.
1. Competence

• Maintain an appropriate level of

professional expertise by continually
developing knowledge and skills.
• Perform professional duties in
accordance with relevant laws,
regulations, and technical standards.
• Provide decision support
information and recommendations that
are accurate, clear, concise, and timely.
 • Recognize and communicate
professional limitations or other
constraints that would preclude
responsible judgment or successful
performance of an activity.
2. Confidentiality
• Keep information confidential except
when disclosure is authorized or legally required.
• Inform all relevant parties regarding
appropriate use of confidential information.
Monitor subordinates’ activities to ensure
compliance.
• Refrain from using confidential
information for unethical or illegal advantage.
3. Integrity
• Mitigate actual conflicts of interest; regularly
communicate with business associates to avoid
apparent conflicts of interest. Advise all parties of
any potential conflicts.
• Refrain from engaging in any conduct that
would prejudice carrying out duties ethically.
• Abstain from engaging in or supporting any
activity that might discredit the profession.
4. Credibility
• Communicate information fairly and
objectively.
• Disclose all relevant information
that could reasonably be expected to
influence an intended user’s understanding
of the reports, analyses, or
recommendations.
• Disclose delays or deficiencies in
information, timeliness, processing, or
internal controls in conformance with
Resolution of Ethical Conflict
In applying the Standards of Ethical
Professional Practice, you may encounter
problems identifying unethical behavior or
resolving an ethical conflict. When faced
with ethical issues, you should follow your
organization’s established policies on the
resolution of such conflict. If these policies
do not resolve the ethical conflict, you
should consider the following courses of
• Discuss the issue with your immediate
supervisor except when it appears that
the supervisor is involved. In that case,
present the issue to the next level.
• If you cannot achieve a satisfactory
resolution, submit the issue to the next
management level. If your immediate
superior is the chief executive officer or
equivalent, the acceptable reviewing
authority may be a group such as the
audit committee, executive committee,
board of directors, board of trustees, or
owners.
• Contact with levels above the
immediate superior should be initiated
only with your superior’s knowledge,
assuming he or she is not involved.
Communication of such problems to
authorities or individuals not employed
or engaged by the organization is not
considered appropriate, unless you
believe there is a clear violation of the
law.
• Clarify relevant ethical issues by
initiating a confidential discussion with
an IMA Ethics Counselor or other
impartial advisor to obtain a better
understanding of possible courses of
action.
Consult your own attorney as to legal
obligations and rights concerning the
ethical conflict.
 THANK YOU FOR LISTENING

Reporter :
CRISTIAN DOMINIQUE ATIS