Managerial Accounting Ethics Paper

facility square footage. Along with these overhead costs a managerial accountant will use direct costs to determine “cost of goods sold” and your inventory at its various stages of manufacturing such as; raw materials, work in progress (WIP) or finished goods(FG).
Maintaining ethical standards is critical to all aspects of running a healthy business; managerial accounting, like all other areas of the business has its own specific issues and concerns that are associated with ethical behavior. Since most managerial accountants work within a single company they are tied directly to the successes and failures of that company, just like any other employee. Knowing that potential bonuses, raises or promotions could be tied to the company doing

If the company does not have a written procedure on how to handle the situation then it should be elevated to the appropriate level of management within the company to resolve. If the company cannot resolve the ethical conduct itself, the IMA publishes a suggested course of action on how to manage these issues.
Techniques used by managerial accountants help to give a company’s management and decision makers the information needed in order to meet their financial goals. These goals can be drastically different from one company to another, but there are many standardized techniques used by companies to acquire and analyze this information. Some of the more common managerial accounting techniques used include; Capital Budgeting, Inventory Management and Breakeven Analysis.
Capital Budgeting: The growth of a company may be tied to the acquisition of new capital equipment, understanding the necessary cash outlays along with both the time value of money and useful life of the equipment are critical to be able to budget effectively and make sure that the company has the financial resources available when they need it. Capital budgeting also provides managers with data on the expected rate of inflation, the expected return on investment and the expected profitability on capital

If a company carries an excess of inventory, above and beyond the needs of their immediate customers they are potentially tying up resources needlessly that could be utilized better in other areas of the company. Managerial accounting reports allow the effective tracking of inventory, the ability to create just-in-time delivery for your customers and to minimize reordering costs. Additionally, these reports can help material managers set manpower planning levels, schedule servicing and create effective turnaround times.
Breakeven Analysis: A breakeven analysis identifies the point where your revenue equals the associated costs expended in order to receive that revenue, or how many of your products you need to sell in order to “breakeven”. This information will allow managers to understand the volumes of products or service necessary to sell in order to not only “recoup” your operating costs but also to make a profit. One area that needs to be examined carefully is in how the variable and fixed costs are determined. Expected sales volumes, administrative expenses, rents and insurances all need to be considered in this