The Controller's Function: The Work of the Managerial Accountant, 3rd Edition

by Janice M. Roehl-Anderson (Cherry Hills Village, Colorado); Steven M. Bragg (Englewood, Colorado)

• ISBN13: 9780471683308
• ISBN10: 0471683302
• Edition: 3rd
• Format: Paperback
• Copyright: 2004-12-01
• Publisher: WILEY

Summary

Take control and keep your company competitive. The controller's role in corporate America has become increasingly crucial and exceedingly complex. So how can new and established professionals enhance their performance and sustain their company's competitive advantage? With The Controller's Function, Third Edition. From describing essential competencies-cash management, budgeting, fraud prevention and establishing codes for corporate ethical behavior-to detailing the more sophisticated skills like activity-based and target costing, disaster recovery planning, and outsourcing, The Controller's Function expertly balances both the technical and managerial sides of the job. You'll quickly access information on how to: Use electronic spreadsheets for financial analysis Successfully implement a shared service center Enhance performance through online inventory systems, quick closing procedures Selecting adequate accounting software Avoid insurance pitfalls through proper planning Order your copy today!

Author Biography

Janice M. Roehl-Anderson, MBA, is a principal with Deloitte Consulting LLP, with more than twenty years of consulting experience. She specializes in information systems security; financial and cost accounting system analysis, design, selection, and implementation; and long-range information system planning.

Steven M. Bragg, CPA, CMA, CIA, CPIM, has been the chief financial officer or controller of four companies, as well as a consulting manager at Ernst & Young. He is the author of nineteen books, including Accounting Best Practices, Third Edition and Essentials of Payroll: Management and Accounting, both from Wiley.

Table of Contents

Acknowledgments	xi
About the Authors	xiii
Preface	xv
The Controller's Job	1	(11)
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	7	(3)
Ethics	10	(2)
Internal Control	12	(51)
Basic Elements	12	(7)
Controls to Use in Your Business	19	(35)
Elements of Internal Accounting Control	54	(1)
Levels of Controls	55	(1)
Responsibility for Proper Internal Controls	56	(1)
Fraud	57	(4)
Auditing for Fraud	61	(2)
Planning and the Strategic Plan	63	(16)
Strategic Plan Overview	63	(2)
System of Plans	65	(1)
Planning Cycle	66	(3)
Planning Roles	69	(1)
Planning Timing and the Planning Period	70	(1)
Business Mission	71	(2)
Developing Long-Range Objectives	73	(2)
Developing Long-Range Strategies	75	(4)
Long-Range Financial Plan	79	(14)
Layout and Purpose	79	(1)
Trends of Revenues and Profits	80	(1)
Capital Investments	81	(2)
Cash Flows and Financing Requirements	83	(2)
Risk Analysis	85	(1)
Breakdown by Business Unit/Product Line/Geography	86	(1)
Financial Position	87	(6)
Annual Plan	93	(26)
System of Plans	93	(11)
Annual Planning Cycle	104	(1)
Role of the Controller	105	(1)
Sales Planning: The Base of All Business Plans	106	(1)
Steps in Developing the Near-Term Sales Plan	106	(2)
Methods for Determining the Sales Forecast	108	(4)
Useful Sources for Forecasting Information	112	(1)
Break-Even Chart	112	(3)
Changes in the Sales Mixture	115	(2)
Changes in the Sales Price	117	(1)
Changes in the Cost	117	(2)
Sales	119	(16)
Role of the Controller	119	(2)
Sales Analysis	121	(3)
Sales Standards	124	(3)
Sales Reports	127	(2)
Product Pricing	129	(6)
Distribution Expenses	135	(16)
Role of the Sales Manager	136	(1)
Analyzing Distribution Costs	136	(2)
Analyzing by Application	138	(6)
Setting the Distribution Budget	144	(7)
Direct Materials and Labor	151	(20)
Objectives	151	(1)
Role of the Controller	152	(3)
Types of Cost Systems	155	(1)
Measuring Direct Material Costs	156	(1)
Controlling Direct Material Costs	157	(2)
Controlling Direct Material Quantities	159	(3)
Measuring Direct Labor Costs	162	(1)
Controlling Direct Labor Costs	162	(7)
Target Costing	169	(2)
Overhead	171	(25)
Need for Overhead Controls	172	(1)
Responsibilities of the Controller	172	(2)
Account Classifications	174	(2)
Fixed and Variable Costs	176	(5)
Cost Allocation	181	(9)
Controlling Overhead	190	(3)
Production Reports	193	(3)
General and Administrative Expenses	196	(8)
Functions Involved	196	(1)
Accounting for and Allocating Administrative Expenses	197	(2)
``Unique'' Expenses	199	(2)
Controlling Costs	201	(3)
Cash and Investments	204	(15)
Objectives of Cash Management	204	(1)
Role of the Controller	205	(1)
Cash Collections	205	(1)
Cash Disbursements	206	(1)
Investment of Short-Term Funds	207	(3)
Accounting for Records of Investment	210	(3)
Cash and Investment Controls	213	(6)
Receivables	219	(8)
Functions of the Credit Department	219	(3)
Shortening the Receivables Cycle	222	(2)
Reserve for Doubtful Accounts	224	(1)
Receivables Fraud and Control	225	(2)
Inventory	227	(22)
Inventory Management Systems	227	(6)
Inventory Tracking	233	(6)
Physical Inventory Procedure	239	(3)
Inventory Valuation	242	(4)
Inventory Fraud and Controls	246	(3)
Property, Plant, and Equipment	249	(17)
Role of the Controller	250	(1)
Capital Budgeting	251	(10)
Postproject Appraisals	261	(1)
Other Aspects of Fixed Assets	262	(4)
Liabilities	266	(8)
Objectives	266	(1)
Controls	267	(1)
Credit Agreement Provisions	268	(1)
Debt Capacity	269	(2)
Bond Ratings	271	(1)
Leverage	272	(2)
Equity	274	(18)
Role of the Controller	274	(1)
Cost of Capital	275	(8)
Dividend Policy	283	(1)
Long-Term Equity Planning	284	(5)
Repurchasing Common Shares	289	(1)
Capital Stock Records	290	(2)
Operational Accounting	292	(17)
Create Departmental Job Descriptions	292	(2)
Create a Departmental Training Program	294	(2)
Clear Out Excess Documentation	296	(1)
Document All Major Processes	297	(1)
Schedule the Department	297	(2)
Correct the Underlying Causes of Errors	299	(2)
Use of Best Practices	301	(3)
Outsourcing Selected Accounting Functions	304	(5)
Closing Procedures	309	(10)
Selecting the Fiscal Year	309	(1)
Selecting Interim Reporting Periods	310	(1)
Quick Close	311	(8)
Performance Measurements and Trends	319	(21)
Performance Measurements	320	(15)
Trends	335	(1)
Interrelationship of Ratios	336	(1)
Just-in-Time Ratios	337	(3)
Financial Analysis	340	(26)
Analyzing Financial Statements	340	(5)
Analyzing Working Capital	345	(6)
Analyzing Capital Investments	351	(2)
Analyzing Capacity Utilization	353	(3)
Analyzing Financing Options	356	(2)
Creating Forecasts	358	(2)
Improving Shareholder Value	360	(6)
Taxes	366	(10)
Tax Strategy	367	(1)
Tax Organization	368	(2)
Role of the Tax Manager	370	(1)
Tax Records	371	(3)
Tax versus Book Accounting	374	(1)
Proper Classification of Accounts	375	(1)
Selecting a Financial Information System	376	(23)
Reasons to Purchase Software	376	(1)
Defining Systems Requirements	377	(3)
Existing System Documentation	380	(1)
Joint Sessions	381	(2)
Preparing the Request for Proposal	383	(5)
Distribution of the Request for Proposal	388	(1)
Review of the Vendor's Completed Proposal	389	(3)
Reference Calls	392	(2)
Demonstration	394	(1)
Site Visits	394	(1)
Cost of the System	395	(1)
Final Selection	395	(1)
Contract Negotiations	396	(1)
Postimplementation Review	397	(2)
Project Risk Management	399	(11)
Project Risk Categories	400	(2)
Project Risk Management Approach	402	(8)
Implementing a Successful CRM Solution	410	(6)
Define a Business Case to Drive Shareholder Value	411	(1)
Clearly Communicate the Change Imperative	412	(1)
Building a Winning Team	413	(2)
Prepare for the Worst	415	(1)
Organizations Large and Small Embrace Shared Services	416	(12)
Executive Summary	417	(1)
About the Survey	418	(1)
Business Case	418	(3)
Implementation	421	(2)
Operations	423	(1)
Customer Relations	424	(2)
Next Steps	426	(2)
Information Technology Offshore and Outsourcing	428	(9)
What Offshoring Is	428	(4)
Providers' Approach to Outsourcing and Offshoring	432	(1)
Variants: Build, Buy, Rent	432	(1)
Popular Start-Up Options	433	(1)
How Offshoring Is Different from Engaging a Local Service Provider	434	(1)
Ensuring That Risks and Rewards Are Balanced	435	(1)
Deciding if Offshoring Is Good for a Company	436	(1)
Change Management	437	(13)
Implementation History	438	(2)
Competing Projects	440	(2)
Degree of Disruption	442	(1)
Cost of Failure	442	(1)
Risks	443	(7)
App A New Controller Checklist	450	(5)
Index	455