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ControllershipACCT7320—Prof. Charles Bailey
Overview of the Course
Fall 2015
What is a “Controller”?
Chief Accounting Officer (CAO) More descriptive
Comptroller “An erroneous spelling of controller,
introduced c. 1500. …still retained in certain official designations.”
Oxford English Dictionary
Commonly used in government al settings
What does a “Controller” do?
The concept is now well known, but “there is no universal definition attributed to it and this causes serious confusion concerning what a Controller is actually supposed to do.”
M. Linhardt & S. Sundqvst, 2004
Role of a Controller
Controller’s responsibilities vary dramatically based on…
company size More precise & narrow in a big
company the presence of other managers to
handle related functions
Main functions of the Controller
Planning Controlling Reporting Accounting Many others, esp. in smaller companies
Planning function
Controller must “act as the coordinator who assembles and maintains the plan”
Must verify that: Sales plan or forecast supports corp. policies
& objectives Assumptions are valid & realistic Production plan supports the sales schedule Plan is within facility capabilities Expenses are in proportion to other activities Sufficient funding exists
Control function
Controller provides information to each manager Consumes a lot of the staff time
Role does not end with feedback Flowchart existing systems Implement process changes
Must remain forward-looking Can’t control the past
Reporting function
Function closely related to Planning & Control Essential to make them effective
Not just routine tabulation & presentation! Encompasses the interpretation of data Management must actually understand
Reports to outside parties: Shareholders, general public, creditors,
customers, SEC, IRS.
Accounting function
Traditionally the principal function Newer aspects of the job:
Benchmarking key practices Converting to electronic transactions Reducing cycle time (of accounting activities) Outsourcing accounting functions Reengineering key functions
Other functions of the Controller
In smaller firms, many other duties can fall on the controller Not worth our attention in the course?
Finance functions belong to a CFO if and when the firm grows and one is hired
The Controller and CFO
Controller reports to the CFO Traditional promotion route
May be closed off with arrival of CFO Controllers face potential conflicts with CFO’s
Vice-PresidentFinance, CFO
Vice-PresidentFinance, CFO
Controller Controller Treasurer Treasurer
2008 Survey of AICPA & IMATopics Ranked High in Importance Ethics & Fraud 33 Problem Solving Using Spreadsheets 33 Overhead Allocation 33 The Value of Information 3 Operating Budgets 3 Variance Analysis 3 Revenue Allocation & Customer Profitability
Analysis 33
Other topics?
Many potential topics for your presentations Cost/Managerial Accounting techniques
Advanced (new) or refresher? Management Accounting Quarterly good
Ethical issues
Cost Allocation: Departments, Joint Products,
and By-Products
Chapter Seven
[I will give introductory lecture tonight.]
Learning Objectives
Cost Estimation (Appendix)
Chapter Eight
Learning Objectives
Use learning curves to estimate a certain class of non-linear cost function (i.e., to estimate costs when learning is present)
Use statistical measures to evaluate a regression analysis
Strategic Performance Measurement: Cost Centers, Profit Centers and
the Balanced Scorecard
Chapter Eighteen
Identify the objectives of management control Identify the types of management control systems Define strategic performance measurement and
show how centralized, decentralized, and team-oriented organizations can apply it
Explain the objectives and applications of strategic performance measurement in three common strategic business units: cost centers, revenue centers, and profit centers
Learning Objectives
Learning Objectives (continued)
Explain the role of the balanced scorecard (BSC) in strategic performance measurement
Explain the role of strategic performance measurement in service firms and not-for-profit organizations
13
Employee, Vendor, andEmployee, Vendor, and Other Frauds against the Other Frauds against the
OrganizationOrganization
McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
Decision-Making with A Strategic Emphasis
Chapter Eleven
Learning Objectives Analyze decisions with multiple products and
limited resources (so-called “product-mix” decisions)
[Additional material on Theory of Constraints.]
Strategic Performance Measurement: Investment Centers
Chapter Nineteen
Part One
Explain the use and limitations of return on investment (ROI) for evaluating investment centers
Explain the use and limitations of residual income for evaluating investment centers
Explain the use and limitations of economic value added (EVA®) for evaluating investment centers
Learning Objectives
Learning Objectives (continued)
Part Two
Explain the objectives of transfer pricing, and the advantages and disadvantages of various transfer-pricing alternatives
Discuss the important international issues that arise in transfer pricing
Management Compensation, Business Analysis, and Business Valuation
Chapter Twenty
Identify and explain the types of management compensation
Identify the strategic role of management compensation and the different types of compensation used in practice
Explain the three characteristics of a bonus plan: the base for determining performance, the compensation pool from which the bonus is funded, and the bonus payment options
Learning Objectives
Learning Objectives (continued) Describe the role of tax planning and financial
reporting in management compensation planning Explain how management compensation plans
are used in service industries Apply different methods for business analysis and
business valuation
Time for a break?
An academic hour is 50 minutes, allowing for a break of 10 min. We normally take a break at the midpoint of our 3-hour class and then usually wind up a few minutes early.
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