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Accounting for Managers: Interpreting Accounting Information for Decision-Making, Canadian Edition

Book Description

The Canadian edition of Accounting for Managers: Interpreting Accounting Information for Decision-Making builds on the success of the original textbook that was published in the United Kingdom. This book was motivated by a need for a "decision-focused" accounting textbook for both MBA and undergraduate programs. The title of the book emphasizes the focus on accounting to meet the needs of managers. The material contained in the book stresses the interpretation (rather than the construction) of accounting information as well as a critical (rather than unthinking) acceptance of the underlying assumptions behind accounting. It is suitable for postgraduate and undergraduate students who are undertaking courses in accounting that do not lead to professional accreditation, and to practicing non-financial managers who need a better understanding of the role of accounting in their organizations. This Canadian edition book has been adapted to include materials, examples and case studies with a Canadian focus. Part I provides a discussion of financial accounting, with particular focus on international financial reporting standards and practices. Part II concentrates on management accounting information for planning, decision-making and control, while Part III provides the supporting information including relevant readings that demonstrate some current research and literature in management accounting.

Table of Contents

  1. Cover Page
  2. Title Page
  3. Copyright
  4. About the Author
  5. PREFACE
  6. Acknowledgments
  7. Contents
  8. PART I: Context of Accounting
    1. CHAPTER 1: Introduction to Accounting
      1. Accounting, Accountability, and Stewardship
      2. The Role of Financial Accounting
      3. The Role of Management Accounting
      4. Core Activities of Management Accounting
      5. Trends in Management Accounting
      6. Management Accounting in Practice
    2. CHAPTER 2: Accounting and Its Relationship to Shareholder Value and Corporate Governance
      1. Capital and Product Markets
      2. Value-Based Management
      3. Shareholder Value, Strategy, and Accounting
      4. Company Regulation and Corporate Governance
      5. Risk, Internal Control of Financial Reporting, and Management Accounting
      6. A Critical Perspective
    3. CHAPTER 3: Recording Financial Transactions and Accounting and Information Systems
      1. Business Events, Transactions, and the Accounting System
      2. The Double Entry: Recording Transactions
      3. Extracting Financial Information from the Accounting System
      4. Basic Principles of Accounting
      5. Cost Terms and Concepts: The Limitations of Financial Accounting
      6. Accounting and Information Systems
    4. CHAPTER 4: Constructing Financial Reports: IFRS and the Framework of Accounting
      1. Management's Responsibility for Fair Presentation
      2. International Financial Reporting Standards: An Overview
      3. Conceptual Framework for Financial Reporting
      4. Reporting Profitability: The Statement of Comprehensive Income
      5. Reporting Financial Position: The Statement of Financial Position
      6. Accrual Accounting
      7. Depreciation
      8. Specific IFRS Accounting Treatments
      9. Reporting Cash Flow: The Statement of Cash Flows
      10. A Critical Perspective on Accounting Standards
    5. CHAPTER 5: Interpreting Financial Reports and Alternative Perspectives
      1. Annual Reports
      2. Management's Discussion and Analysis
      3. Ratio Analysis
      4. Profitability
      5. Liquidity
      6. Leveraging
      7. Activity/Efficiency
      8. Working Capital
      9. Managing Accounts Receivable
      10. Managing Inventory
      11. Managing Accounts Payable
      12. Shareholder Return
      13. Interpreting Financial Information Using Ratios
      14. CASE STUDY 5.1: HIGH LINER FOODS INCORPORATED
      15. CASE STUDY 5.2: CARRINGTON PRINTERS—AN ACCOUNTING CRITIQUE
      16. Alternative Theoretical Perspectives on Financial Reports
      17. Corporate Social and Environmental Reporting
      18. Global Reporting Initiative
  9. PART II: Using Accounting Information for Decision Making, Planning, and Control
    1. CHAPTER 6: Management Control
      1. Management Control and Strategic Planning
      2. Management Control Systems
      3. Measurement of Non-Financial Factors and Intangible Assets
      4. Management Control versus Organizational Improvement
      5. Conclusion
      6. CASE STUDY 6.1: BALANCED SCORECARD AT CRANFELD OFFICE EQUIPMENT
    2. CHAPTER 7: Inventory Management
      1. Introduction to Inventory
      2. Inventory for a Merchandising Company
      3. Inventory for a Manufacturing Company
      4. Flow of Costs
      5. Valuation of Inventory
      6. Methods of Inventory Valuation in Merchandising Firms
      7. Methods of Costing Inventory in Manufacturing
      8. Valuation of Inventory for Service Companies
      9. Backflush Costing
      10. Long-Term Contract Costing
      11. Inventory Management
    3. CHAPTER 8: Marketing Decisions
      1. Marketing Strategy
      2. Cost Behaviour
      3. Cost–Volume–Profit Analysis
      4. Alternative Approaches to Pricing
      5. Determining the Optimum Selling Price
      6. Special Pricing Decisions
      7. Decisions to Keep or Drop a Product Line
      8. CASE STUDY 8.1: LATEX DIVISION OF HARMON PAINTS
      9. CASE STUDY 8.2: RETAIL STORES COMPANY—CVP ANALYSIS
      10. CASE STUDY 8.3: SUPERTECH—USING ACCOUNTING INFORMATION TO WIN SALES
    4. CHAPTER 9: Operating Decisions
      1. The Operations Function
      2. Managing Operations: Manufacturing
      3. Managing Operations: Services
      4. Accounting for the Cost of Spare Capacity
      5. Capacity Utilization and Product Mix
      6. Theory of Constraints
      7. Operating Decisions: Relevant Costs
      8. Quality Management and Control
      9. Environmental Cost Management
      10. CASE STUDY 9.1: QUALITY PRINTING COMPANY—PRICING FOR CAPACITY UTILIZATION
      11. CASE STUDY 9.2: VEHICLE PARTS CO.—THE EFFECT OF EQUIPMENT REPLACEMENT ON COSTS AND PRICES
      12. CASE STUDY 9.3: ALOHA INDUSTRIES—MAKE V. BUY CASE
    5. CHAPTER 10: Human Resource Decisions
      1. Human Resources and Accounting
      2. The Cost of Labour
      3. Variability in Labour
      4. Relevant Cost of Labour
      5. Outsourcing Labour Costs
      6. Cost of Redundancy
      7. Measuring Human Capital
      8. CASE STUDY 10.1: THE DATABASE MANAGEMENT COMPANY—LABOUR COSTS AND UNUSED CAPACITY
      9. CASE STUDY 10.2: TABAK SALES—THE COST OF LOSING A CUSTOMER
    6. CHAPTER 11: Accounting Decisions
      1. Cost Classification
      2. Calculating Product/Service Costs
      3. CASE STUDY 11.1: ABC AT SMITH COMPONENTS
      4. CASE STUDY 11.2: HUB CELLULAR COMMUNICATIONS—ABSORPTION v. VARIABLE COSTING
    7. CHAPTER 12: Strategic Investment Decisions
      1. Strategy Planning and Investments
      2. Investment Appraisal
      3. Accounting Rate of Return
      4. Payback Method
      5. Discounted Cash Flow Methods
      6. Evaluation of Techniques
      7. CASE STUDY 12.1: GOLIATH COMPANY—INVESTMENT EVALUATION
    8. CHAPTER 13: Performance Evaluation of Business Units
      1. Structure of Business Organizations
      2. The Decentralized Organization and Divisional Performance Measurement
      3. Controllability
      4. Non-Financial Performance Evaluation
      5. Transfer Pricing
      6. CASE STUDY 13.1: MAJESTIC SERVICES—DIVISIONAL PERFORMANCE MEASUREMENT
    9. CHAPTER 14: Budgeting
      1. What Is Budgeting?
      2. The Budgeting Process
      3. Budgeting for a Manufacturing Company
      4. Budgeting for a Retail Company
      5. Budgeting for a Service Industry
      6. Cash Forecasting
      7. Budgeting Challenges
      8. CASE STUDY 14.1: SPORTY STORES LTD.
      9. CASE STUDY 14.2: TELCON MANUFACTURING
    10. CHAPTER 15: Budgetary Control
      1. What Is Budgetary Control?
      2. Flexible Budgeting
      3. Variance Analysis
      4. Sales Variance
      5. Cost Variances
      6. Materials Variances
      7. Labour Variances
      8. Overhead Variances
      9. Cost Control
      10. CASE STUDY 15.1: WHITE COLD EQUIPMENT
    11. CHAPTER 16: Strategic Management Accounting
      1. Strategic Management Accounting Defined
      2. Accounting Techniques to Support SMA
      3. Five Forces Analysis
      4. Value Chain Analysis
      5. Customer Profitability Analysis
      6. Other Costing Approaches
      7. CASE STUDY 16.1: ANT
  10. PART III: Readings
    1. Introduction to Readings
    2. READING 1: Using the Balanced Scorecard as a Strategic Management System
    3. READING 2: Teaching Special Decisions In a Lean Accounting Environment
    4. READING 3: Intellectual Capital Reporting
      1. Why Measure Intellectual Capital?
      2. Internal Reporting of Intellectual Capital
      3. External Reporting of Intellectual Capital
      4. Internal and External Reporting
    5. READING 4: The Strategic Value of Customer Profitability Analysis
      1. Introduction
      2. Customer Profitability Analysis
    6. READING 5: Innovation Killers: How Financial Tools Destroy Your Capacity to Do New Things
      1. Misapplying Discounted Cash Flow and Net Present Value
      2. Focusing Myopically on Earnings per Share
  11. Glossary of Accounting Terms
  12. Answer Key for Self-Test Questions
  13. Index