Exhibit 2-4
Four Functions of Information or Cost Accounting Systems
Provided by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida
MAAW's Textbook Chapter 2 | MAAW's Textbook Main Page
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Exhibit 2-4 Characteristics and Requirements Related to the Four Functions of Information or Cost Accounting Systems | ||||
| Characteristic or Requirement | External Financial Statements |
Planning & Controlling Activities or processes |
Short Term Strategic Decisions |
Long Term Strategic Decisions |
| Audience | 1. Outside investors, creditors, IRS and SEC. | 2. Plant, production and operating managers, and workers. | 3. Marketing, product, business and senior managers. | 4. Marketing, product, business and senior managers |
| Type of information required | Aggregated quantitative overall financial results. | Disaggregated quantitative and qualitative non-financial information on specific activities and processes. | Disaggregated quantitative and qualitative financial and non-financial information on specific products, services, customers and suppliers. | Disaggregated quantitative and qualitative financial and non-financial information on specific aspects of the company's competitive strategy. |
| Reporting interval required | Quarterly. | Real time, hourly or daily. | Annual or life cycle unless product design or process changes. | Special studies performed periodically. |
| Decision Examples | Should an investor purchase, or dispose of the stock or bonds of this company? | What resources are needed for the period? Are specific processes in control? | Should the company continue producing current products and services? What prices should be charged for products and services? | Should the company replace a machine, build a new plant, reengineer a product or process, convert to a JIT system? |