A1

1. Scorekeeping
Preparing a schedule of depreciation is one of the methods to report
companys activities. We can assign it as a routine activity where all
types of data is combine to prepare a schedule of depreciation.
2. Problem Solving
Analyzing the impact on cost of purchasing new equipment it is part
of comparative analysis of decision making process. It will help to
decide if the new equipment can by afford by a company it that
moment. What is more, many components will be studied before the
final decision will be made like for example what benefits it will
bring, how much sales can increase, how big will be deprecation.
3. Scorekeeping
Preparing a scrap report is a type of accumulating data to help
management describe how well organization is doing
4. Attention Directing
Interpreting why company did not adhere to its production schedule
help managers focus on operating problems and imperfections, it
brings managers attention to the specific problem company is
facing.
5. Score keeping, Attention Directing
The report itself its a score keeping activity which helps to collect
data and evaluate the performance of a company. However, to
explain the report usually other reports are used which bring us to
Attention Directing. Attention Directicting activity involves routine
reports which helps managers with comparing actual reports with
expectations. Explaining the stamping departments performance
report will help to understand if this particular department met its
goals.
6. Scorekeeping
Preparing a monthly statement of European sales will help vice
president of marketing to check if the company is doing well or
rather poorly and what impact marketing department has in the
portion of sales in Europe
7. Problem Solving
A cost comparison will help for the manager to figure out which
option is the best from the alternatives being consider.
8. Attention Directing
Interpreting variances of the purchasing departments performance
report will help universitys officials to focus on all inefficiencies as
well opportunities. It wil bring their attention to the most
problematic points.

9. Problem Solving
Those analysis will help Airbus manufacturing manager to calculate
if having some parts of airplane made in Korea is a cheaper or
rather more expensive. He will be able to identify the best option to
follow.
10.
Scorekeeping
Preparing budget serves as a checkpoint for dermatology
department to be able to analyze the performance as well how get
they are in following their plan.
A3
1. Confidentiality
In this situation there are two possible outcomes, which depend
of who the guest is. If the guest is a person not involved in the
General Mills company operations, like an outside guest the
General Mills managers should behave according to the
Confidentiality category of ethical standards. This category states
that information should be kept confidentially except when
disclosure is authorized or legally required. If the manger shares
information from the report of new cereals his action would be
unethical and may cause further problems for the company.
In the other hand, if the guest is a part of board of directors, one
of the managers or have other position within the company the
Credibility category should be used. This category of ethical
standard says that information should be communicated fairly
and objectively. However, a dinner part it is not the best place to
discuss such a problems.
2. Competence
In the IMA Statement of Ethical Professional Practice its states that
each member has responsibility to recognize and communicate
professional limitations or other constraints that would preclude
responsible judgment or successful performance of an activity.
According to the IMA statement Felix should definitely ask for help
because his lack of knowledge and experience can cause some
further problems for the company. As the young graduate even that
he may do his best it would not mean that he would finish this
evaluation correctly.
3. Credibility
The division manager requests violates three standards of Ethical
Professional Practice: credibility, competence and integrity. If Mary
Sue prepare budget according to her supervisor rules it would not be
credible. It would not disclose all relevant information, which may

cause in wrong understanding of companys current position. The

budget would result in favorable reviews for the division and its
managers rather than in actual and true information.
What is more, it violates competence standard because Mary Sue
supervisor asking her to prepare a budget that is not clear and
complete. This budget would not include potentially important
information. Without that information future reports may also
include wrong data and result in bigger issues.
The division supervisor requests violates integrity standard. The
revised budget may omit crucial information to achieve the division
supervisor objectives rather than companys goals. Mary Sue as a
management accountant is responsible for communicating true
information for benefits of company even if they are unfavorable for
some persons.
In this situation Mary Sue should let her supervisor know that his
request is unethical. If the supervisor would not withdraw his
request Mary Sue should discuss this issue with increasingly higher
levels of authority in her company. She may need to go all the way
to the board of directors. She shouldnt discuss it with people
outside of her company unless the board is not responsive, the next
step is to contact the Security and Exchange Commission.
32
1. Field is less sharply defined
Management Accounting has less sharply defined field and involves
functional areas as decision and behavioral sciences and economics.
2. Provides internal consulting advice to managers
Management Accounting primary users are organization managers
at various levels.
3. Has less flexibility
Financial Accounting is less flexible. The time span is usually one
year or one quarter.
4. Is characterized by detailed reports
Management Accounting include detailed reports about
departments, products etc.
5. Has a future orientation

Management Accounting has future orientation where

Financial Accounting is past oriented.
6. Is constrained by GAAP
Financial Accounting is constrained by generally accepted
accounting principles
7. Behavioral impact is secondary
Financial Accounting treats behavioral impact as secondary however
executive compensation based on reports may have behavioral
impacts.
33

40
Management accounting deals with reporting information about
economic activity within organization. Managers use this information
for planning, evaluating performance and controlling operations.
In the case of hospitals, before 1980s revenues from insurance
companies and governmental agencies were sufficient to cover
operating cost. However, after some changes such payments are
only flat fees which are not enough to cover all expenses. This is
why top managements of hospitals are required to use accounting
information more wisely to allocate profits in the best possible
manner. Revenues that are not sufficient to cover all the operating
activities are one of the reasons that management accounting
became more important for hospitals. Top management needs to
specify clear budget, which indicates desire to allocate resources
and emphasize certain activities. What is more, it creates a need of
looking for other types of revenues and ways to obtain additional
money. Compared to financial accounting, management accounting
is a young discipline but as shown above, is becoming more and
more important.