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

Contents......Page 6
Preface......Page 12
MAIN JOB FUNCTIONS......Page 14
JOB DESCRIPTION......Page 15
JOB QUALIFICATIONS......Page 18
ORGANIZATIONAL STRUCTURE OF THE ACCOUNTING DEPARTMENT......Page 19
ETHICS......Page 24
BASIC ELEMENTS......Page 26
CONTROLS TO USE IN YOUR BUSINESS......Page 33
ELEMENTS OF INTERNAL ACCOUNTING CONTROL......Page 61
LEVELS OF CONTROLS......Page 62
FRAUD......Page 63
AUDITING FOR FRAUD......Page 67
NOTES......Page 68
STRATEGIC PLAN OVERVIEW......Page 69
SYSTEM OF PLANS......Page 72
PLANNING CYCLE......Page 73
PLANNING ROLES......Page 75
PLANNING TIMING AND THE PLANNING PERIOD......Page 76
BUSINESS MISSION......Page 78
DEVELOPING LONG-RANGE OBJECTIVES......Page 80
DEVELOPING LONG-RANGE STRATEGIES......Page 82
LAYOUT AND PURPOSE......Page 86
TRENDS OF REVENUES AND PROFITS......Page 88
CAPITAL INVESTMENTS......Page 89
CASH FLOWS AND FINANCING REQUIREMENTS......Page 90
RISK ANALYSIS......Page 91
FINANCIAL POSITION......Page 94
SYSTEM OF PLANS......Page 100
ADDITIONAL BUDGET MODELING TOPICS......Page 113
ANNUAL PLANNING CYCLE......Page 115
SALES PLANNING: THE BASE OF ALL BUSINESS PLANS......Page 116
STEPS IN DEVELOPING THE NEAR-TERM SALES PLAN......Page 117
METHODS FOR DETERMINING THE SALES FORECAST......Page 118
CHANGES IN THE SALES MIXTURE......Page 122
CHANGES IN THE SALES PRICE......Page 124
CHANGES IN THE COST......Page 125
ROLE OF THE CONTROLLER......Page 127
SALES ANALYSIS......Page 129
SALES STANDARDS......Page 133
SALES REPORTS......Page 135
PRODUCT PRICING......Page 138
7 Distribution Expenses......Page 145
ANALYZING DISTRIBUTION COSTS......Page 146
ANALYZING BY APPLICATION......Page 148
SETTING THE DISTRIBUTION BUDGET......Page 154
OBJECTIVES......Page 161
ROLE OF THE CONTROLLER......Page 162
TYPES OF COST SYSTEMS......Page 165
MEASURING DIRECT MATERIAL COSTS......Page 166
CONTROLLING DIRECT MATERIAL COSTS......Page 167
CONTROLLING DIRECT MATERIAL QUANTITIES......Page 168
MEASURING DIRECT LABOR COSTS......Page 171
CONTROLLING DIRECT LABOR COSTS......Page 172
TARGET COSTING......Page 178
9 Overhead......Page 180
NEED FOR OVERHEAD CONTROLS......Page 181
RESPONSIBILITIES OF THE CONTROLLER......Page 182
ACCOUNT CLASSIFICATIONS......Page 183
FIXED AND VARIABLE COSTS......Page 185
COST ALLOCATION......Page 191
CONTROLLING OVERHEAD......Page 199
PRODUCTION REPORTS......Page 203
FUNCTIONS INVOLVED......Page 206
ACCOUNTING FOR AND ALLOCATING ADMINISTRATIVE EXPENSES......Page 207
RESPONSIBILITY ACCOUNTING......Page 209
‘‘UNIQUE’’ EXPENSES......Page 210
CONTROLLING COSTS......Page 212
OBJECTIVES OF CASH MANAGEMENT......Page 215
ROLE OF THE CONTROLLER......Page 216
CASH COLLECTIONS......Page 217
CASH DISBURSEMENTS......Page 220
INVESTMENT OF SHORT-TERM FUNDS......Page 221
ACCOUNTING FOR RECORDS OF INVESTMENT......Page 223
CASH AND INVESTMENT CONTROLS......Page 227
FUNCTIONS OF THE CREDIT DEPARTMENT......Page 234
SHORTENING THE RECEIVABLES CYCLE......Page 238
RECEIVABLES FRAUD AND CONTROL......Page 240
INVENTORY MANAGEMENT SYSTEMS......Page 242
INVENTORY TRACKING......Page 248
PHYSICAL INVENTORY PROCEDURE......Page 254
INVENTORY VALUATION......Page 257
INVENTORY FRAUD AND CONTROLS......Page 260
14 Property, Plant, and Equipment......Page 264
ROLE OF THE CONTROLLER......Page 265
CAPITAL BUDGETING......Page 266
POSTPROJECT APPRAISALS......Page 280
OTHER ASPECTS OF FIXED ASSETS......Page 281
OBJECTIVES......Page 284
CONTROLS......Page 285
CREDIT AGREEMENT PROVISIONS......Page 287
DEBT CAPACITY......Page 288
BOND RATINGS......Page 289
LEVERAGE......Page 291
ROLE OF THE CONTROLLER......Page 294
COST OF CAPITAL......Page 295
DIVIDEND POLICY......Page 303
LONG-TERM EQUITY PLANNING......Page 304
REPURCHASING COMMON SHARES......Page 311
CAPITAL STOCK RECORDS......Page 312
CREATE DEPARTMENTAL JOB DESCRIPTIONS......Page 314
CREATE A DEPARTMENTAL TRAINING PROGRAM......Page 316
CLEAR OUT EXCESS DOCUMENTATION......Page 319
STREAMLINE THE ACCOUNTING WORKFLOW......Page 320
DOCUMENT ALL MAJOR PROCESSES......Page 322
SCHEDULE THE DEPARTMENT......Page 323
CORRECT THE UNDERLYING CAUSES OF ERRORS......Page 325
USE OF BEST PRACTICES......Page 327
OUTSOURCING SELECTED ACCOUNTING FUNCTIONS......Page 329
18 The Fast Close......Page 335
DIFFERENT TYPES OF FAST CLOSE......Page 336
HOW TO ACHIEVE A FAST CLOSE......Page 337
SUMMARY......Page 352
FORM 8-K......Page 354
ANNUAL 10-K AND QUARTERLY 10-Q REPORTS......Page 361
TIMING OF ANNUAL AND QUARTERLY REPORT FILINGS......Page 363
FORM S-1......Page 364
FORM S-3......Page 365
FORM S-8......Page 366
FORMS REQUIRING PAYMENT TO THE SEC......Page 367
FEDWIRE PAYMENTS......Page 368
20 Performance Measurements and Trends......Page 369
PERFORMANCE MEASUREMENTS......Page 370
TRENDS......Page 386
JUST-IN-TIME RATIOS......Page 388
ANALYZING FINANCIAL STATEMENTS......Page 391
ANALYZING WORKING CAPITAL......Page 398
ANALYZING FINANCING OPTIONS......Page 404
SERVICES PROFITABILITY ANALYSIS......Page 407
THE THROUGHPUT ANALYSIS MODEL......Page 410
PRODUCTION OUTSOURCING DECISION......Page 412
NEW PRODUCT DECISION......Page 414
TYPES OF REPORTS USED FOR COST REDUCTION ANALYSIS......Page 417
SPEND ANALYSIS OVERVIEW......Page 421
SPEND DATABASE......Page 422
SUPPLIER CONSOLIDATION ANALYSIS......Page 423
MAINTENANCE, REPAIR, AND OPERATIONS ITEM ANALYSIS......Page 425
SPEND COMPLIANCE......Page 426
SPEND ANALYSIS REPORTS......Page 427
WORKFORCE REDUCTION ANALYSIS......Page 430
WORKFORCE REDUCTION ISSUES......Page 434
WORKFORCE REDUCTION ALTERNATIVES......Page 435
5S ANALYSIS......Page 436
ERROR QUANTIFICATION......Page 437
FIXED COST ANALYSIS......Page 439
VALUE STREAM MAPPING......Page 440
WASTE ANALYSIS......Page 443
23 Taxes......Page 445
TAX STRATEGY......Page 446
TAX ORGANIZATION......Page 447
ROLE OF THE TAX MANAGER......Page 449
TAX RECORDS......Page 450
TAX VERSUS BOOK ACCOUNTING......Page 453
SALES AND USE TAXES......Page 454
PROPER CLASSIFICATION OF ACCOUNTS......Page 455
24 Selecting a Financial Information System......Page 457
DEFINING SYSTEMS REQUIREMENTS......Page 458
EXISTING SYSTEM DOCUMENTATION......Page 461
JOINT SESSIONS......Page 462
PREPARING THE REQUEST FOR PROPOSAL......Page 465
DISTRIBUTION OF THE REQUEST FOR PROPOSAL......Page 470
REVIEW OF THE VENDOR’S COMPLETED PROPOSAL......Page 471
REFERENCE CALLS......Page 475
SITE VISITS......Page 476
COST OF THE SYSTEM......Page 477
CONTRACT NEGOTIATIONS......Page 478
POSTIMPLEMENTATION REVIEW......Page 479
APPENDIX: New Controller Checklist......Page 482
About the Author......Page 490
Index......Page 492