UNIVERSAL COLLEGE OF PARAÑAQUE

Dr. A Santos Avenue, Paranaque City

MANAGEMENT SERVICES
MS 01
MANAGEMENT SERVICES

Management
Management is the process of planning, organizing, directing, and controlling activities to achieve an organization's
goals and objectives.

Functions of Management

1. Planning
- Sets the organization's goals and objectives.
- Can involve short-term or long-term plans.
- Evaluates different alternatives and selects the best course of action.

2. Organizing / Directing
- Organizes resources and assigns tasks.
- Involves guiding, instructing, motivating, and communicating with employees to accomplish organizational objectives.

3. Controlling
- Monitors and evaluates actual performance.
- Compares actual results with planned objectives.
- Takes corrective action when necessary.

4. Decision Making
- Involves choosing the best alternative based on available information.
- Uses predictive information to make important business decisions.

Note: Decision making is present in all management functions.

Management Accounting is also known as Internal Accounting

Financial and non-financial information that helps managers make decisions and achieve organizational objectives.

Purpose of Management Accounting

- Assists managers in planning.
- Supports decision-making.
- Helps control business operations.
- Improves organizational performance.

Financial Accounting vs Management Accounting

Area of Comparison Financial Accounting Management Accounting

1. Users of Information Internal and External users Internal users only

2. Restrictive Guidelines Must follow PFRS, PAS, or GAAP No mandatory accounting standards

3. Type of Information Monetary (financial) information Monetary and non-monetary information

only
4. Emphasis of Report Reliability (accuracy and precision) Relevance (timely and useful information)

5. Information Source Mainly internal data Internal and external data

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6. Focus of Analysis Business as a whole Individual departments, products, projects, or other

segments
7. Frequency of Periodic (monthly, quarterly, Whenever needed by management
Reporting annually)
8. Time Orientation Primarily historical (past Primarily projected (future), but also uses historical
performance) data

Line vs. Staff Functions

Line Authority

Line authority refers to the authority of managers who are directly responsible for achieving the organization's goals.
Characteristics
- Directly involved in the organization's main operations.
- Has the authority to give orders and make decisions.
- Follows the chain of command, from the Board of Directors down to lower-level employees.
- Exercises downward authority (superior → subordinate).
Examples
 Chief Executive Officer (CEO)
 Operations Manager
 Production Manager
 Sales Manager
 Branch Manager

Staff Authority

Staff authority refers to individuals or departments that provide advice, support, and specialized services to line
managers.
Characteristics
- Does not directly achieve the organization's main goals.
- Provides expert advice, recommendations, and assistance.
- Supports line managers in making decisions.
- Exercises upward or lateral authority (advising managers or coordinating with other departments).
Examples
 Human Resources (HR)
 Legal Department
 Accounting Department
 Information Technology (IT)
 Research and Development (R&D)

Line Authority = Commands and accomplishes organizational goals.

Staff Authority = Advises and supports those who command.

Controller vs. Treasurer

Controller
A controller is responsible for controllership, which ensures that the company's resources are obtained and used
according to plans to achieve organizational objectives.
- Accounting
- Financial reporting
- Internal control
- Performance evaluation
Functions of a Controller
 Reporting and interpreting financial data

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 Tax administration
 Government reporting
 Management audit
 Internal audit
 Economic appraisal (evaluating business performance and decisions)
 Protection of assets (through internal controls)

Treasurer

A treasurer is responsible for acquiring, financing, and managing the company's funds and assets to maximize the
owners' wealth.
- Cash management
- Financing
- Investments
- Risk management
-
Functions of a Treasurer
 Provision of capital (raising funds)
 Investor relations
 Short-term financing
 Banking and custody of funds
 Credit and collections
 Investments and insurance

Basis Controller Treasurer

Primary Focus Accounting and control Finance and cash management
Main Responsibility Reports and safeguards financial information Manages cash and obtains financing
Concern Internal financial operations External financing and investments
Goal Accurate reporting and effective internal controls Maintain liquidity and maximize shareholder wealth

Controller = "Controls the Records"

Treasurer = "Handles the Treasure"

Standards for Ethical Conduct for Management Accountants

Management accountants have a responsibility to their:

 Organization
 Profession
 Public
 Themselves

They are expected to maintain the highest standards of ethical conduct, as established by the Institute of Management
Accountants (IMA).
There are four (4) ethical standards: (CCIC)
1. Competence
2. Confidentiality
3. Integrity
4. Credibility

I. Competence- Maintain professional knowledge and perform work with skill and diligence. (Knowledge and Skills)

1. Continuously improve professional knowledge and skills.

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2. Perform duties according to laws, regulations, and technical standards.

3. Provide information that is:
o Accurate
o Clear
o Concise
o Timely
4. Recognize and help manage business risks.

II. Confidentiality- Protect confidential information. (Bawal Mosang)

1. Keep information confidential unless authorized or legally required to disclose it.
2. Inform relevant parties about the proper use of confidential information and ensure compliance.
3. Never use confidential information for personal, unethical, or illegal gain.

III. Integrity- Act honestly and avoid conflicts of interest. (Honesty)

1. Avoid and disclose conflicts of interest.
2. Do not engage in unethical conduct.
3. Do not participate in activities that discredit the accounting profession.
4. Promote an ethical culture and place professional integrity above personal interests.
IV. Credibility- Provide reliable, objective, and complete information. (Trustworthy Communication)
1. Communicate information fairly and objectively.
2. Disclose all relevant information needed for proper understanding.
3. Report delays, deficiencies, or weaknesses in information and internal controls.
4. Inform others of any professional limitations that may affect judgment or performance.

Ethical Standard Main Idea Key Responsibilities

Competence Be qualified Improve skills, follow standards, provide accurate and timely information
Confidentiality Protect information Keep information confidential and do not misuse it
Integrity Be honest Avoid conflicts of interest and unethical conduct
Credibility Be trustworthy Communicate complete, fair, and objective information

MCQs
1. Management is best defined as the process of:
A. Recording financial transactions.
B. Planning, organizing, directing, and controlling activities to achieve organizational goals.
C. Preparing tax returns.
D. Investing company funds.

2. Which management function involves setting goals and selecting the best course of action?
A. Controlling
B. Directing
C. Planning
D. Organizing

3. Which management function compares actual performance with planned performance?

A. Planning
B. Controlling
C. Organizing
D. Staffing
4. Decision-making is:
A. Only part of planning.
B. Only part of controlling.
C. A separate function unrelated to management.
D. Inherent in all management functions.

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5. Management accounting is primarily intended for:

A. Investors
B. Government agencies
C. Internal managers
D. Creditors

6. Which of the following is another name for management accounting?

A. Cost accounting only
B. Internal or managerial accounting
C. Public accounting
D. Financial reporting

7. Financial accounting primarily emphasizes:

A. Timeliness
B. Relevance
C. Reliability
D. Flexibility

8. Which type of accounting uses both monetary and non-monetary information?

A. Financial accounting
B. Tax accounting
C. Management accounting
D. Auditing

9. Which accounting system follows PFRS, PAS, or GAAP?

A. Management accounting
B. Financial accounting
C. Cost accounting
D. Internal auditing

10. Management accounting reports are prepared:

A. Quarterly only
B. Annually only
C. Whenever management needs them
D. Every five years

11. Line authority refers to managers who:

A. Provide advice to management.
B. Directly achieve organizational goals.
C. Conduct internal audits.
D. Manage company investments.

12. Which of the following is an example of a staff function?

A. Production Manager
B. Sales Manager
C. Human Resources Department
D. Branch Manager

13. Staff authority mainly provides:

A. Orders to subordinates
B. Advice and support to line managers
C. External audits
D. Shareholder dividends

14. Which position is primarily responsible for financial reporting, auditing, and internal control?
A. Treasurer
B. Controller
C. Investor
D. Stockholder

15. Which of the following is a function of the Treasurer?

A. Internal audit
B. Tax administration

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C. Banking and custody of funds

D. Government reporting

16. Which statement about the Controller and Treasurer is TRUE?

A. Their duties should generally be performed by the same person.
B. They have exactly the same responsibilities.
C. Their functions should generally be separated.
D. Only the Treasurer prepares financial reports.

17. Which ethical standard requires management accountants to continuously improve their professional knowledge and skills?
A. Integrity
B. Credibility
C. Confidentiality
D. Competence

18. A management accountant refuses to disclose confidential company information without authorization. Which ethical standard is
being followed?
A. Integrity
B. Credibility
C. Confidentiality
D. Competence

19. Avoiding conflicts of interest is primarily a requirement under which ethical standard?
A. Competence
B. Integrity
C. Confidentiality
D. Credibility

20. Communicating information fairly, objectively, and completely demonstrates:

A. Competence
B. Confidentiality
C. Integrity
D. Credibility

END OF HANDOUT

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