ENGINEERING CAREER IN FINANCE

AND AUDIT

CONTABILIDAD GERENCIAL

MEMBERS: Johana Espinosa

Nataly Iza

Thalia Leon

Mario Rocha

Vanessa Villamarin

COURSE: Fifth Finance

TEACHER:

PERIOD: October 2016 – February 2017

 INTRODUCTION

Management Accounting is responsible for studying, measuring and analyzing the assets of
companies and individuals, in order to serve in decision-making and control, presenting the
information, previously recorded, in a systematic and useful way for the different parties.
interested.
This same accounting originated in very remote times when man was forced to keep
records and controls of his properties because his memory was not enough to store the
required information. Which has been demonstrated by various historians that in times such
as the Egyptian or Roman times, accounting techniques that were derived from commercial
exchange were used.

Management Accounting is a science and technique whose objective is to provide

information for making economic decisions and is called accounting. Accountants study the
assets of companies, entities or people and reflect the results in an accounting statement or
financial statement.
Administrative, for its part, is an adjective that refers to what belongs to or is related to
administration. This management concept is linked to the operation, structure and
performance of an organization.
The type of accounting that focuses on the information needs of the various administrative
levels is known as administrative accounting. This accounting seeks to generate internal
reports so that the entity's administration can develop efficiently.
The company accountant is responsible for designing, preparing and presenting
administrative accounting reports. These reports do not usually go beyond the doors of the
company: that is, they are only used by the managers, owners or those responsible for the
company to evaluate the development of the business according to the policies and
objectives and objectives established previously.

GENERAL OBJECTIVE:
  Determine which are the most relevant aspects of managerial accounting that the
CACPECO financial institution uses for the correct fulfillment of its objectives and
operation.

SPECIFIC OBJECTIVES:

 Know the application of the role of accounting information within the CACPECO
financial institution.
 Analyze the factors involved in the flow of accounting information of the
CACPECO financial institution.
 Define the strategies that the financial institution CACPECO proposes for making
business decisions.

CACPECO
About us?

We are a Cooperative under the supervision of the Superintendence of Popular and

Solidarity Economy.

Our management is based on Corporate Social Responsibility, seeking a social,

environmental and economic balance for our interest groups: partners, control bodies,
managers, local governments, human talent, suppliers, media, community and environment.

Each of these actors has granted us the license to operate, thanks to their trust and support
we have achieved several recognitions that make the CACPECO family a humane and
solvent Entity.

Mission

We deliver quality solidarity financial products and services, with sustainable management,
supported by cutting-edge technology and committed human talent.

Vision

To be a model in corporate social responsibility, recognized in our areas of influence for

our commitment to the development of our interest groups and innovation.

Values

We guide our daily work based on:

 Commitment: Discipline and dedication, feeling the business as your own, positive
attitude and professionalism. Passion for service.
 Focus on Achievement: Efficiency in the performance of acquired responsibilities.
Commercial orientation based on results with social responsibility and professional
development, recognition and reward. Teamwork.
 Leadership: Guide the Cooperative to follow its objectives responsibly. Have a
clear responsibility and know how to implement it successfully. Build a culture of
value and lifelong learning and implement it in daily work.
 Solidarity: It is the bond that unites us between managers, collaborators and with
the least favored groups, so that the well-being of some determines that of others.
  Transparency: Total adherence to laws, political regulations. Justice and equity
between Managers, Partners, Collaborators, Clients and Suppliers.
 Cordiality: Kind, gentle treatment, warmth, working with joy.
 Innovation: Generate competitive advantages through creativity in the generation
of new products and services, operational management and customer management.

DEVELOPMENT

FINANCIAL AND ADMINISTRATIVE ACCOUNTING

Financial Accounting

According to(Contabilidad Administrativa) mentions

Information system aimed at providing information to third parties related to the company,
such as shareholders, credit institutions, investors, etc., in order to facilitate their decisions.

Management accounting

According to(Contabilidad Administrativa) mentions

Information system at the service of the needs of the administration, with pragmatic
orientation aimed at facilitating planning, control and decision-making functions.

DIFFERENCES BETWEEN FINANCIAL ACCOUNTING AND MANAGEMENT

ACCOUNTING

COMPARISON AREAS FINANCIAL ADMINISTRATIVE

ACCOUNTING ACCOUNTING
Main users of the People and organizations Various levels of Administration.
information. external to the company.

Types of accounting Double game system. Any system is useful

systems
Guides that restrict Must adhere to generally There are no restrictions, the
accepted accounting principles criterion of utility prevails.

Unit of measurement The monetary unit (historical Any monetary or physical

cost) measurement unit that is useful
(man hours, machine hours, units,
etc.)
Central point of analysis The economic entity as a Various segments of the economic
whole entity.
Information Frequency Periodically on a regular basis Whenever required
(monthly, quarterly,
semiannually, annually)
. Degree of reliability It requires objectivity, it is By nature he considers the future. It
historical in nature. is subjective, it is used for planning
purposes, but objective data is used
whenever it is relevant

Retrieved from the Administrative Accounting Book, 2011

CONCEPT: Accounting Information

According to(Manzares, 2016) states: “Accounting information allows us to classify

operations and also measure, record, analyze and evaluate all the company's activities.”

In today's world, it becomes more necessary every day to have information that
allows us to establish an adequate strategy in establishing sales prices, which are
competitive in relation to the existing competition in the industry to which our company
belongs. Accounting and, in general, the accounting and financial information system must
provide the necessary elements for an adequate calculation of the sales price for each of the
items or services produced by the company. From the above it follows that cost accounting
fulfills a primary function within the accounting information system, which is to provide
information on the cost of production to establish sales prices.

Goals

According to(Eslava, 2013) indicates:

The fundamental objectives of financial information are:

 Know and demonstrate the resources controlled by an economic entity, the

obligations it has to transfer resources to other entities, the changes that such
resources have experienced and the result obtained in the period.
 Predict cash flows.
 Support administrators in the planning, organization and management of businesses.
 Make decisions regarding investments and credit.
 Evaluate the management of the administrators of the economic entity.
 Exercise control over the operations of the economic entity.
 Support the determination of tax burdens, prices and rates.
 Help the formation of national statistical information, and
 Contribute to the evaluation of the benefit or social impact that the economic
activity of an entity represents for the community.

Financial reporting perspectives

 According to(Manzares, 2016) mentions: “As a management tool, financial
information will continue to be an indispensable means of evaluating the effectiveness with
which management manages to keep shareholders' investment intact and also obtain a fair
return.”

Financial information will continue to be the greatest support for business decision-
making; Let us remember that the higher the quality of the information, the greater the
probability of success in the decisions. But to achieve quality information, it must
incorporate data into its content that meets the needs of different users. Currently, the
subsystem parameters that most interest any user are liquidity, profitability, growth,
leverage and productivity.

Purpose

According to(ADMINISTRACIÒN Y ECONOMÌA, 2014) points out:

“The fundamental purpose of accounting is to provide financial information about
an economic unit. “Management decision makers need financial information to assist them
in planning and controlling the organization’s activities.”

Who are the users?

According to(Mercaleblog, 2013) mentions:
Users of accounting information are classified into two large groups:
 Internal users: These are those people or entities that need information to make
decisions within the company, such as directors, majority shareholders, managers.
Or in other words, they are those people or entities that are an active part of the
generation of information and events of the company. The information they need is
collected, among other sources, from Analytical Accounting.
 External users: These are those people or entities that need information to make
decisions about the company or those that influence the situation of the company,
 among them are competitors, creditors, suppliers, clients, public administrations,
credit institutions. They are passive recipients of the information they need and
collect it from Financial Accounting.

Flow of Accounting Information

Effects of Accounting Information

It is the means by which economic events are measured and made known.

Requirements:

 Know the nature of the economic activities that the accounting information
describes.
 Identify assumptions and measurement techniques involved in the development of
accounting information.
 Identify what information is most important when making various types of
decisions.

According to(Crece Negocios, 2007) mentions:

IAS Nº1.- Presentation of financial reports:

A complete set of financial statements includes:

 A statement of financial position at the end of the financial year;

 A statement of comprehensive income for the year;
 A statement of changes in equity for the year;
 A statement of cash flows for the year;
 Notes, which include a summary of the most significant accounting policies and
other.

Characteristics of accounting information:

  The presentation of all financial statements is a means of communication within
the organization.
 Presentation of financial reports versus financial statements.- They are a subset
of financial information.
 General purpose assumptions - satisfy the needs of investors and creditors.
 Inaccurate and approximate measurements are based on estimates, judgments
and assumptions made in the past.

Characteristics of management accounting information:

 Importance of opportunity.
 Identification of a decision-making authority.
 Future oriented.
 Measures of efficiency and effectiveness.
 Management accounting information is n medium.

Integrity of accounting information

 Institutional characteristics.
 Standards for the presentation of accounting information.
 Internal control structure.
 Audit of financial statements.
 Professional organizations.
 American Institute CPA.
 Institute of Management Accountants.
 Institute of Internal Auditors (IIA).
 Competence, judgment and ethical conduct.
 Competence
 Confidentiality
 Integrity
 Objectivity

Management accounting

According to(Introduccion la contabilidad Gerencial, 2016) mentions:

 Management accounting is the process of identifying, measuring, accumulating,
analyzing, preparing, interpreting and communicating information used by management to
plan, evaluate and control within an organization and ensure the appropriate use and
accountability of its resources.

This process is used by management to:

 Plan – achieve an understanding of expected transactions and other events and their
impact.
 Evaluate.- judge the implications of various past and/or future events.
 Control.- ensure the integrity of the information.
 Ensure accountability.- alignment to the responsibilities of the organization and
contribution to the effective measurement of management performance.

The main objectives of management accounting are:

 Provide information: Select and provide necessary information to all levels of

management to
 plan, evaluate and control
 safeguard the organization's assets and
 communicate to interested parties.
 Participate in the management process: Management Accountants involved in
what to do strategic, tactical and operational. They participate, as part of
management, ensuring that the organization functions as a whole in the LP, MP and
CP

According to(Martine, 2011) mentions:

Importance of management accounting as a management instrument

In this unit, one of the most important part of accounting is managerial accounting since it
is the leader of many industries and we will review how it acts in the direction of the same
companies. The management of a company can establish the rules it wishes to collect
accounting information for internal use. Thus, although the rules of financial accounting
apply to all companies, the rules of Management accounting are dictated and applied
according to the needs of a specific company.

In short, accounting has the following functions

  Provide a numerical image of what happens in life and organizational activity.
 Record and control the organization's transactions accurately and quickly.
 Varied, updated and reliable source of information for decision making.
 Protect the organization's assets through mechanisms that automatically and timely
reveal the embezzlement of funds or theft of assets.
 Explain and justify the management of resources.
 Prepare financial statements.

According to(Gestion y Administración, 2014) mentions:

Like any business tool, administrative accounting has certain characteristics that
help identify it since it is often confused with other terms corresponding to accounting.

 First of all, we must say that administrative accounting uses a technique that is
based on the utility provided by both internal and external information. In
addition, it is much more interested and completely focused on all the small details
corresponding to the administration of a company, taking care of reporting all the
activities that are carried out in each area of the company, the equipment that is
used, the controls. and the types of inventories that the company manages and other
productive aspects belonging to the company.
 On the other hand, we cannot ignore the fact that, despite the benefits offered,
administrative accounting is not mandatory, meaning that it can be carried out as
long as it adjusts to the company's criteria. Generally, it is applied in those
situations where the company's senior executives are interested in having
information that will help them to form a basis for the decisions that are going to be
made, regardless of whether they influence the future or present process of a certain
activity.
 Said information, which will be provided by administrative accounting, must be
quick and especially timely, since it must be used in order to make different
decisions, each one in its own time. The information that is the responsibility of
administrative accounting must always be based on those techniques corresponding
to large numbers.
  And finally we want to say that administrative accounting is mainly
characterized by being one of the most useful tools in the business sector, since
without it, a company could never carry out certain plans. Although its use is
optional, administrative accounting should always be considered an important part
of business administration and management.

Management accountants

According to(Tu Guía Contable, 2013) mentions:

Management or cost accountants record financial information for their

companies that is used by the organization's management to assist in the decision-
making process. Management or cost accountants have to develop budgets, verify
asset and cost management, and create important reports used by management.

Managers rely heavily on the information provided by management accountants for

developing effective business strategies. Small business owners make most of the
decisions within the company. The information presented by management
accountants affects the ability of managers and owners to make business decisions.

Functions performed by the management accountant:

 Preparation of financial forecasts.

 Cost accounting.
 Internal audit.
 Government accounting.

DECISION MAKING
 According to Hellriegel, and Slocum (2004) mention that decision making is the
“process of defining problems, collecting data, generating alternatives, and selecting a
course of action.” (p.13)

Stoner, (2003) Defines decision making as “the process of identifying and solving a
course of action to solve a specific problem.”

In conclusion, it can be said that decision making is the process by which a choice is
made between options or ways to resolve different life situations in different contexts,
whether at work, family, sentimental, business level, using methodologies. quantitative
information provided by the management or administration of the organization itself.

Decision making consists of choosing an option among those available, in order to

resolve a current or potential problem, even when a latent conflict is not evident.

According to Huber, G. (1980), considers two types of decisions which are:

Programmed Decisions

They are those that are taken frequently, that is, they are repetitive and it becomes a
routine to take them; as the type of problems that solves and occur with a certain regularity
since there is a well-established solution method and therefore the steps to address this type
of problems are already known, for this reason, they are also called structured decisions.
The person who makes this type of decision does not have the need to design any solution,
but is simply governed by the one that has been followed previously.

Programmed decisions are made in accordance with policies, procedures or rules,

written or unwritten, that facilitate decision making in recurring situations because they
limit or exclude other options.

Programmed decisions are used to address recurrent problems. Whether complex or

simple. If a problem is recurring and if its component elements can be defined, predicted,
and analyzed, then it may be a candidate for a programmed decision.

Unprogrammed decisions
 Also called unstructured, they are decisions that are made in the face of problems or
situations that arise infrequently, or those that require a specific solution model or process,
for example: “Launching a new product on the market”, in this type. decision-making, it is
necessary to follow a decision-making model to generate a specific solution for this specific
problem.

Non-programmed decisions address infrequent or exceptional problems. If a

problem has not occurred frequently enough to be covered by a policy or is so important
that it deserves special treatment, it should be handled as an unprogrammed decision.
Problems such as allocating an organization's resources, what to do with a failed production
line, how to improve community relations—in fact, the most important problems the
manager will face will typically require unprogrammed decisions.

Decision Classification

According to (Claver, 2000), he mentions that decisions can be

classified taking into account different aspects, such as the
frequency with which they occur, the scope of the functions
affected, the time their effects will last, etc.

In organizations in general, there is usually a hierarchy that

determines the type of actions that are carried out within it and,
consequently, the type of decisions that are made in each one.

Frequently this hierarchy is made up of 3 different levels:

a) Strategic (or planning) decisions.- These are decisions made by decision-makers

located at the apex of the hierarchical pyramid or senior managers. These decisions
mainly refer to the relationships between the organization or company and its
environment. (Senior management; global planning of the entire company).

b) Tactical or piloting decisions.- These are decisions made by intermediate

managers. They try to efficiently allocate available resources to achieve the
 objectives set at a strategic level. Its consequences usually occur over a short period
of time and are generally reversible. (Planning of business subsystems).

c) Operational decisions.- Adopted by executives who are at the lowest level. They
are those related to the current activities of the company. The degree of
repetitiveness is high: they are often translated into automatic routines and
procedures, so the necessary information is easily available. (Development of daily
operations (daily/routine).

Decision Making Style

According to Huber, G. (1980), you can count on the following decision-making styles:

 Management style:
They have little tolerance for ambiguity and their way of thinking is rational. They
are efficient and logical. Managerial types make quick decisions and focus on the
short term. Their efficiency and promptness in making decisions mean that they
fulfill this function with minimal information and evaluate few alternatives.
 Analytical style:
They tolerate ambiguity much more than managerial types. They want more
information before making a decision and consider more alternatives than in the
managerial style. Those with an analytical style are characterized by their ability to
adapt or face unique situations.
 Conceptual style:
They focus on the long term and are very good at finding creative solutions to
problems.
 Behavioral style:
They are interested in the achievements of others and accept their suggestions. They
call meetings to communicate, although they try to avoid conflicts. Acceptance
from others is important for those of this decision-making style. Although these
decision-making styles are different. Almost all managers have characteristics of
more than one style.
Decision-making process

According to Peter Drucker (1993) in Managing for Results, he mentions the following
decision-making process:

 Identify and analyze the problem

Find the problem and recognize that a decision must be made to solve it. The
problem may be current, or potential, because it is estimated that it will exist in the
future.
 Identify the decision criteria and weigh them
Those aspects that are relevant when making the decision, that is, those guidelines
on which the decision made depends.
 Define the priority to address the problem
The definition of priority is based on the impact and urgency to address and resolve
the problem.
 Generate solution alternatives
It consists in developing different possible solutions to the problem. The more
alternatives you have, the more likely it is to find one that is satisfactory.
Techniques such as brainstorming, forced relationships, are necessary at this stage
in which creativity is important.
 Evaluate alternatives
It is a detailed study of each of the possible solutions that were generated for the
problem, that is, looking at their advantages and disadvantages, individually with
respect to the decision criteria, and one with respect to the other, assigning them a
value. weighted.
 Choosing the best alternative
In this step, the alternative is chosen that, according to the evaluation, will obtain
the best results for the problem.
 There are techniques (for example, hierarchical decision analysis) that help us
evaluate multiple criteria.
 Application of the decision
Implement the decision made in order to evaluate whether the decision was correct
or not. Implementation will likely result in new, less important decisions being
made.

 Evaluation of the results

After implementing the decision, it is necessary to evaluate whether or not the
problem was solved, that is, whether the decision is having the expected result or
not. If the result is not what was expected, you should look at whether it is because
you should give yourself a little more time to obtain the results or if the decision
was definitely not the right one. In this case, you should start the process again to
find a new one. decision.
 CONCLUSIONS

 The decision-making process is undoubtedly one of the greatest responsibilities,

however, decisions mark the success or failure of any organization, they are like the
engine of business.

 When making a decision, it is important to study the problem or situation and

consider it deeply to choose the best path to follow according to the different
alternatives and operations. It is also of vital importance for administration since it
contributes to maintaining the harmony and coherence of the group, and therefore
its efficiency.
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