The Controller's Function: The Work of the Managerial Accountant PDF
Preview The Controller's Function: The Work of the Managerial Accountant
FFIRS 11/25/2010 9:48:47 Page1 The Controller’s Function FFIRS 11/25/2010 9:48:47 Page2 FFIRS 11/25/2010 9:48:47 Page3 The Controller’s Function The Work of the Managerial Accountant FOURTH EDITION STEVEN M. BRAGG JohnWiley&Sons,Inc. FFIRS 11/25/2010 9:48:47 Page4 Copyright #2011 byJohn Wiley & Sons,Inc. Allrights reserved. Published byJohn Wiley & Sons,Inc.,Hoboken, NewJersey. Published simultaneously in Canada. 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Some content that appearsinprintmaynotbeavailableinelectronicbooks.Formoreinformationabout Wiley products, visit our web site at www.wiley.com. Library of CongressCataloging-in-Publication Data: Bragg, Steven M. The controller’s function: the workofthe managerialaccountant. —4th ed./ Steven M.Bragg. p.cm. Rev.ed.of:Thecontroller’sfunction/JaniceRoehl-Anderson,StevenM.Bragg.3rded. Includesindex. ISBN 978-0-470-93742-6 (hardback);ISBN 978-1-118-00141-7 (ebk); ISBN 978-1-118-00142-4 (ebk);ISBN 978-1-118-00143-1 (ebk) 1. Managerial accounting. 2. Controllership. 3. Auditing. 4. Budget in business. I. Roehl-Anderson, JaniceM. Controller’sfunction. II. Title. HF5657.4.R63 2011 658.15011—dc22 2010037967 Printed in the United States ofAmerica. 10 9 8 7 6 5 4 3 2 1 FTOC 12/21/2010 12:29:26 Page5 Contents Preface xi Chapter1:TheController’sJob 1 MainJobFunctions 1 JobDescription 2 JobQualifications 5 OrganizationalStructureoftheAccountingDepartment 6 Ethics 11 Chapter2:InternalControl 13 BasicElements 13 ControlstoUseinYourBusiness 20 ElementsofInternalAccountingControl 48 LevelsofControls 49 Fraud 50 AuditingforFraud 54 Notes 55 Chapter3:PlanningandtheStrategicPlan 56 StrategicPlanOverview 56 SystemofPlans 59 PlanningCycle 60 PlanningRoles 62 PlanningTimingandthePlanningPeriod 63 BusinessMission 65 DevelopingLong-RangeObjectives 67 DevelopingLong-RangeStrategies 69 v FTOC 12/21/2010 12:29:26 Page6 vi & Contents Chapter4:Long-RangeFinancialPlan 73 LayoutandPurpose 73 TrendsofRevenuesandProfits 75 CapitalInvestments 76 CashFlowsandFinancingRequirements 77 RiskAnalysis 78 BreakdownbyBusinessUnit/ProductLine/Geography 81 FinancialPosition 81 Chapter5:AnnualPlan 87 SystemofPlans 87 AdditionalBudgetModelingTopics 100 AnnualPlanningCycle 102 RoleoftheController 103 SalesPlanning:TheBaseofAllBusinessPlans 103 StepsinDevelopingtheNear-TermSalesPlan 104 MethodsforDeterminingtheSalesForecast 105 ChangesintheSalesMixture 109 ChangesintheSalesPrice 111 ChangesintheCost 112 Chapter6:Sales 114 RoleoftheController 114 SalesAnalysis 116 SalesStandards 120 SalesReports 122 ProductPricing 125 Chapter7:DistributionExpenses 132 RoleoftheSalesManager 133 AnalyzingDistributionCosts 133 AnalyzingbyApplication 135 SettingtheDistributionBudget 141 Chapter8:DirectMaterialsandLabor 148 Objectives 148 RoleoftheController 149 TypesofCostSystems 152 MeasuringDirectMaterialCosts 153 ControllingDirectMaterialCosts 154 FTOC 12/21/2010 12:29:26 Page7 Contents & vii ControllingDirectMaterialQuantities 155 MeasuringDirectLaborCosts 158 ControllingDirectLaborCosts 159 TargetCosting 165 Chapter9:Overhead 167 NeedforOverheadControls 168 ResponsibilitiesoftheController 169 AccountClassifications 170 FixedandVariableCosts 172 CostAllocation 178 ControllingOverhead 186 ProductionReports 190 Chapter10:GeneralandAdministrativeExpenses 193 FunctionsInvolved 193 AccountingforandAllocatingAdministrativeExpenses 194 ResponsibilityAccounting 196 ‘‘Unique’’Expenses 197 ControllingCosts 199 Chapter11:CashandInvestments 202 ObjectivesofCashManagement 202 RoleoftheController 203 CashCollections 204 CashDisbursements 207 InvestmentofShort-TermFunds 208 AccountingforRecordsofInvestment 210 CashandInvestmentControls 214 Chapter12:Receivables 221 FunctionsoftheCreditDepartment 221 ShorteningtheReceivablesCycle 225 ReserveforDoubtfulAccounts 227 ReceivablesFraudandControl 227 Chapter13:Inventory 229 InventoryManagementSystems 229 InventoryTracking 235 PhysicalInventoryProcedure 241 FTOC 12/21/2010 12:29:27 Page8 viii & Contents InventoryValuation 244 InventoryFraudandControls 247 Chapter14:Property,Plant,andEquipment 251 RoleoftheController 252 CapitalBudgeting 253 PostprojectAppraisals 267 OtherAspectsofFixedAssets 268 Chapter15:Liabilities 271 Objectives 271 Controls 272 CreditAgreementProvisions 274 DebtCapacity 275 BondRatings 276 Leverage 278 Chapter16:Equity 281 RoleoftheController 281 CostofCapital 282 DividendPolicy 290 Long-TermEquityPlanning 291 RepurchasingCommonShares 298 CapitalStockRecords 299 Chapter17:OperationalAccounting 301 CreateDepartmentalJobDescriptions 301 CreateaDepartmentalTrainingProgram 303 ClearOutExcessDocumentation 306 StreamlinetheAccountingWorkflow 307 DocumentAllMajorProcesses 309 ScheduletheDepartment 310 CorrecttheUnderlyingCausesofErrors 312 UseofBestPractices 314 OutsourcingSelectedAccounting Functions 316 Chapter18:TheFastClose 322 DifferentTypesofFastClose 323 HowtoAchieveaFastClose 324 FTOC 12/21/2010 12:29:27 Page9 Contents & ix EnhancedClosingProcess 339 Summary 339 Chapter19:SECFilings 341 Form8-K 341 Annual10-KandQuarterly10-QReports 348 TimingofAnnualandQuarterlyReportFilings 350 FormS-1 351 FormS-3 352 FormS-8 353 FormsRequiringPaymenttotheSEC 354 FedwirePayments 355 Chapter20:PerformanceMeasurementsandTrends 356 PerformanceMeasurements 357 Trends 373 InterrelationshipofRatios 375 Just-in-TimeRatios 375 Chapter21:FinancialAnalysis 378 AnalyzingFinancialStatements 378 AnalyzingWorkingCapital 385 AnalyzingFinancingOptions 391 ServicesProfitabilityAnalysis 394 TheThroughputAnalysisModel 397 ProductionOutsourcingDecision 399 NewProductDecision 401 Chapter22:CostReduction 404 TypesofReportsUsedforCostReductionAnalysis 404 SpendAnalysisOverview 408 SpendDatabase 409 SupplierConsolidationAnalysis 410 PartsConsolidationAnalysis 412 Maintenance,Repair,andOperationsItemAnalysis 412 SpendCompliance 413 SpendAnalysisReports 414 WorkforceReductionAnalysis 417 WorkforceReductionIssues 421 WorkforceReductionAlternatives 422
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