The Controller's Function: The Work of the Managerial Accountant, 2nd Edition

by Janice M. Roehl-Anderson; Steven M. Bragg

• ISBN13: 9780471383079
• ISBN10: 0471383074
• Format: Paperback
• Copyright: 2000-01-01
• Publisher: Wiley

Summary

Provides an overview of the functions and responsibilities of the controller/management accountant in a corporation.

Author Biography

Janice M. Roehl-Anderson is a partner with Deloitte Consulting LLC.

Table of Contents

Preface	x
Acknowledgments	xi
About the Authors	xiii
The Controller's Job	1	(10)
History of the Controller's Function	1	(1)
Main Job Functions	2	(1)
Job Description	3	(3)
Job Qualifications	6	(1)
Organizational Structure of the Accounting Department	6	(3)
Ethics	9	(2)
Internal Control	11	(26)
Management Concern	11	(1)
Basic Elements	11	(7)
Elements of Internal Accounting Control	18	(2)
Levels of Controls	20	(1)
Responsibility for Proper Internal Controls	20	(2)
Fraud	22	(4)
Auditing for Fraud	26	(1)
Fraudulent Financial Reporting	27	(6)
Internal Auditing	33	(2)
Foreign Corrupt Practices Act	35	(2)
Planning and the Strategic Plan	37	(15)
Strategic Plan Overview	37	(2)
System of Plans	39	(1)
Planning Cycle	40	(2)
Planning Roles	42	(1)
Planning Timing and the Planning Period	43	(1)
Business Mission	44	(2)
Developing Long-Range Objectives	46	(2)
Developing Long-Range Strategies	48	(4)
Long-Range Financial Plan	52	(16)
Layout and Purpose	52	(1)
Trends of Revenues and Profits	53	(1)
Capital Investments	54	(2)
Cash Flows and Financing Requirements	56	(2)
Key Statistics	58	(2)
Risk Analysis	60	(1)
Breakdown by Business Unit/Product Line/Geography	61	(1)
Financial Position	62	(6)
Annual Plan	68	(27)
Need for Plans	68	(4)
System of Plans	72	(8)
Annual Planning Cycle	80	(2)
Role of the Controller	82	(1)
Sales Planning: The Base of All Business Plans	83	(1)
Steps in Developing the Near-Term Sales Plan	83	(1)
Methods for Determining the Sales Forecast	84	(4)
Useful Sources for Forecasting Information	88	(1)
Break-Even Chart	88	(3)
Changes in the Sales Mixture	91	(1)
Changes in the Sales Price	92	(1)
Changes in the Cost	93	(2)
Sales	95	(15)
Role of the Controller	96	(1)
Sales Analysis	97	(3)
Sales Standards	100	(3)
Sales Reports	103	(2)
Product Pricing	105	(5)
Distribution Expenses	110	(15)
Definition	111	(1)
Role of the Sales Manager	111	(1)
Analyzing Distribution Costs	112	(1)
Analyzing by Application	113	(6)
Setting the Distribution Budget	119	(6)
Direct Materials and Labor	125	(18)
Objectives	125	(1)
Role of the Controller	126	(2)
Types of Costing Analysis	128	(1)
Types of Cost Systems	129	(1)
Measuring Direct Material Costs	130	(1)
Controlling Direct Material Costs	131	(1)
Controlling Direct Material Quantities	132	(3)
Measuring Direct Labor Costs	135	(1)
Controlling Direct Labor Costs	136	(5)
Target Costing	141	(2)
Overhead	143	(22)
The Need for Overhead Controls	144	(1)
Responsibilities of the Controller	144	(1)
Account Classifications	145	(2)
Fixed and Variable Costs	147	(5)
Cost Allocation	152	(7)
Controlling Overhead	159	(3)
Production Reports	162	(3)
General and Administrative Expenses	165	(12)
Functions Involved	165	(1)
Accounting for and Allocating Administrative Expenses	166	(1)
``Unique'' Expenses	167	(2)
Cost Variability	169	(1)
Controlling Costs	170	(7)
Cash and Investments	177	(17)
Objectives of Cash Management	177	(1)
Role of the Controller	178	(1)
Cash Collections	178	(1)
Cash Disbursements	179	(1)
Investment of Short-Term Funds	180	(2)
Marketable Securities	182	(3)
Accounting for Records of Investment	185	(3)
Cash and Investment Controls	188	(6)
Receivables	194	(9)
Measuring Receivables	194	(2)
Functions of the Credit Department	196	(2)
Shortening the Receivables Cycles	198	(2)
Reserve for Doubtful Accounts	200	(1)
Receivables Fraud and Control	201	(2)
Inventory	203	(20)
Inventory Management Systems	203	(5)
Inventory Tracking	208	(5)
Physical Inventory Procedure	213	(3)
Inventory Valuation	216	(4)
Inventory Fraud and Controls	220	(3)
Property, Plant, and Equipment	223	(17)
Role of the Controller	224	(1)
Capital Budgeting	225	(9)
Postproject Appraisals	234	(1)
Other Aspects of Fixed Assets	235	(5)
Liabilities	240	(10)
Definitions	240	(1)
Objectives	241	(1)
Controls	242	(1)
Credit Agreement Provisions	243	(1)
Measurements	244	(1)
Debt Capacity	245	(2)
Bond Ratings	247	(1)
Leverage	248	(2)
Equity	250	(13)
Role of the Controller	250	(1)
Equity Formulas and Debt Ratios	251	(3)
Cost of Capital	254	(1)
Dividend Policy	255	(1)
Long-Term Equity Planning	256	(5)
Repurchasing Common Shares	261	(1)
Capital Stock Records	262	(1)
Operational Accounting	263	(16)
Create Departmental Job Descriptions	263	(2)
Create a Departmental Training Program	265	(2)
Clear Out Excess Documentation	267	(1)
Document All Major Processes	267	(1)
Schedule the Department	268	(1)
Correct the Underlying Causes of Errors	268	(4)
Use of Best Practices	272	(2)
Outsourcing Selected Accounting Functions	274	(5)
Closing Procedures	279	(10)
Selecting the Fiscal Year	279	(1)
Selecting Interim Reporting Periods	280	(1)
Need for Prompt Reporting	281	(1)
Quick Close	281	(8)
Performance Measurements and Trends	289	(12)
Performance Measurements	290	(6)
Trends	296	(1)
Interrelationship of Ratios	297	(1)
Impact of EDI on Performance Measures	297	(2)
JIT Ratios	299	(2)
Financial Analysis	301	(25)
Analyzing Financial Statements	301	(5)
Directing Management Performance	306	(1)
Analyzing Working Capital	307	(4)
Analyzing Capital Investments	311	(4)
Analyzing Capacity Utilization	315	(2)
Analyzing Financing Options	317	(1)
Creating Forecasts	318	(3)
Improving Shareholder Value	321	(5)
Taxes	326	(7)
Tax Organization	327	(1)
Role of the Tax Manager	328	(1)
Tax Records	329	(2)
Tax Versus Book Accounting	331	(1)
Proper Classification of Accounts	332	(1)
Selecting a Financial Information System	333	(21)
Reasons to Purchase Software	333	(1)
Defining Systems Requirements	334	(3)
Existing System Documentation	337	(1)
Joint Sessions	338	(1)
Preparing the Request for Proposal	338	(4)
Distribution of the Request for Proposal	342	(2)
Review of the Vendor's Completed Proposal	344	(4)
Reference Calls	348	(1)
Demonstration	349	(1)
Site Visits	349	(1)
Cost of the System	350	(1)
Final Selection	351	(1)
Contract Negotiations	351	(1)
Post-Implementation Review	352	(2)
Information Security Systems	354	(14)
Defining Information Security	355	(1)
Corporate Spending on Information Security Is Increasing	355	(1)
Types of Security Threats	356	(1)
Basic Security Principles	357	(1)
Components of an Effective Security Program	358	(8)
Enterprise Security Strategies	366	(1)
Controller's Role in Information Security	367	(1)
Project Risk Management	368	(10)
Project Risk Categories	369	(2)
Project Risk Management Approach	371	(7)
Systems Performance Management	378	(10)
Why Management of Performance Is Important to the Controller	378	(1)
Define Your Organization's Performance Methodology	379	(2)
The Six Essential Steps: A Performance Methodology	381	(3)
The Performance Details	384	(1)
The Flow of Performance Information Within the Organization	385	(3)
Software Package Integration	388	(35)
Project Management	389	(5)
Risk Management	394	(3)
Quality Management	397	(2)
Integration Steps	399	(24)
Shared Services Today and Tomorrow	423	(14)
What Is Shared Services?	424	(1)
What Drives Shared Services Initiatives?	424	(1)
Realizing the Benefits	425	(1)
What Is the Scope of Shared Services?	426	(2)
The Geographies of Shared Services Are Expanding as Well	428	(3)
Change Leadership Is What Shared Services Projects Are About	431	(2)
Do Your Homework---Measure Performance	433	(1)
Outsourcing Alternative	433	(2)
Changing Face of Shared Services	435	(2)
Information Systems Security	437	(7)
Types of Threats	437	(1)
Protecting Information Systems Assets	438	(4)
Controller's Role	442	(2)
Change Management	444	(13)
Implementation History	445	(2)
Competing Projects	447	(1)
Degree of Disruption	448	(1)
Cost of Failure	449	(1)
Risks	450	(7)
Index	457