Copyright 2024 Pearson Canada Inc. 1

Copyright © 2024 Pearson Canada Inc.1 Chapter 1 Introduction to Managerial Accounting Quick Check

Answers:

• b 3. d 5. c 7. c
• b 4. d 6. c 8.b

Short Exercises (5–10 min.) S1-1 The four primary responsibilities of managers include planning, directing, controlling, and decision making. Managers plan by setting goals and objectives for the company and devising strategies for achieving those goals. Then they direct the day-to-day operations of the company in light of the goals and objectives. They control the company by comparing actual results to plans and then use that feedback to adjust plans and operations. Throughout all aspects of these duties, management is making critical business decisions.Student responses may vary.(5–10 min.) S1-2 a.Managerial accounting b.Managerial accounting c.Financial accounting d.Financial accounting e.Managerial accounting f.Managerial accounting g.Financial accounting h.Managerial accounting i.Financial accounting j.Financial accounting k.Financial accounting l.Financial accounting m.Managerial accounting Managerial Accounting, 5th Canadian Edition, 5e Karen Braun, Wendy Tietz, Louis Beaubien (Solutions Manual all Chapters) 1 / 4

Managerial Accounting Fifth Canadian Edition Instructor’s Solutions Manual

• Copyright © 2024 Pearson Canada Inc.

(5–10 min.) S1-3

• Internal auditing department
• Controller
• Treasurer
• Internal auditing department
• Controller
• Controller
• Treasurer
• Internal auditing department
• Controller
• Controller
• Treasurer
• Internal auditing department
• Controller

(5–10 min.) S1-4

Characteristic Check (✓) if related to internal auditing

• Helps to ensure that the company’s internal controls are

functioning properly ✓

• Reports to the treasurer or controller
• Required by the Toronto Stock Exchange if company stock

is publicly traded on the TSX ✓

• Reports directly to the audit committee ✓
• Ensures that the company achieves its profit goals
• Is part of the accounting department
• Usually reports to a senior executive (CFO or CEO) for

administrative matters ✓

• Performs the same function as independent certified public

accountants

• External audits can be performed by the internal auditing

department

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Managerial Accounting Fifth Canadian Edition Instructor’s Solutions Manual Copyright © 2024 Pearson Canada Inc. 3 (10 min.) S1-5

Each of the five ethical standards contributes to maintaining CPA Canada’s expectation that management accountants will uphold the highest standards of ethical behaviour.

Without the necessary competence, management accountants will be unable to perform their responsibilities. Even if they do recognize an ethical dilemma, they could lack the competence required to determine all the alternative courses of action and the implications of each alternative. Having independence is important for minimizing or eliminating the impact of others’ influences. Management accountants need to provide opinions based on their own interpretation of data rather than the interpretations of other stakeholders.

Management accountants have access to confidential information. If they do not maintain that confidentiality, their companies could suffer. Their companies would be reluctant to provide access to information, which would prevent management accountants from performing their responsibilities.Additionally, employers must have confidence that management accountants have the integrity to apply their skills appropriately and avoid being prejudiced by any conflicts of interest.

Management accountants should have the ability as well to effectively analyze situations so that they might communicate them faithfully to employers, regulators, or clients to ensure proper action is taken.

Finally, an important part of management accountants’ responsibilities is communicating information and providing reports to senior management. To be able to rely on these reports, management must have confidence that the management accountant is not hiding inconvenient facts or presenting a biased view.

Student responses may vary. 3 / 4

Managerial Accounting Fifth Canadian Edition Instructor’s Solutions Manual

• Copyright © 2024 Pearson Canada Inc.

(5 min.) S1-6

• Providing earnings information to your brother before it is publicly announced violates the concept

of client confidentiality and fails to uphold trust.

• Stealing from your employer is a violation of the concept of integrity and is illegal.
• Skipping continuing education sessions could violate the requirement to maintain professional

competence in enabling competencies. If your company paid for you to attend the conference, skipping the sessions also violates the notion of integrity.

• Failing to read the specifications of the software package before purchasing it violates professional

competence in enabling competencies.

• Failing to provide job description information to management because you fear it may be used to cut

a position in your department violates the notion of integrity and the required skills of a competent accountant.

(5 min.) S1-7

a. ISO 9001:2008

• Enterprise resource planning (ERP) system
• The Sarbanes-Oxley Act (SOX)
• XBRL
• E-commerce

(5 min.) S1-8

• Prevention costs
• Lean production
• Appraisal costs
• Internal failure costs
• External failure costs
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