CHAPTER 1

QUESTIONS

1. The function of cost accounting is to provide the cost accounting information that is the basis for planning and controlling current and future operations. It provides the cost figures and analyses that management needs in order to find the most efficient methods of operating, achieving control of costs, and determining selling prices.
2. Originally issued for companies marketing products in Europe, a set of international standards for quality management, known as the ISO 9000 family, was designed by the International Organization for Standardization. Obtaining ISO 9000 is important because many companies will only contract with ISO 9000 suppliers.
3. Manufacturers convert purchased …ver más…

13. The steps that should be taken by the management accountant include: a. Discuss the problem with the immediate supervisor except when it appears that the supervisor is involved, in which case it should be taken to the next higher management level. b. Clarify relevant ethical issues by confidential discussion with an objective advisor. c. Consult your own attorney as to legal obligations and rights. d. If the ethical issue still exists after exhausting all levels of internal review, there may be no other recourse on significant matters than to resign from the organization.
14. Corporate governance is the means by which a company is directed and controlled. Good corporate governance is important to all stakeholders because, due to recent accounting scandals, the need for ethical conduct in managing corporate affairs has never been greater.
15. The recent accounting scandals where management, including controllers and chief financial officers, has “cooked the books” to make reported financial results seem better than actual created the need for the Sarbanes-Oxley Act. To help curb future abuses the act holds CEO’s and CFO’s accountable for the accuracy of their firms’ financial statements.
16. Key elements of the Sarbanes-Oxley Act include: certification by the CEO and CFO that the financial statements fairly reflect the results of operations; the establishment of the Public Company Accounting Oversight Board to provide oversight of