TAILIEUCHUNG - Lecture Accounting for decision making and control (8/e): Chapter 4 - Jerold L. Zimmerman

Chapter 4 - Organizational architecture. The main contents of the chapter consist of the following: Self-interested behavior, team production, firm as a nexus of contracts, principal-agent model, contract issues to consider, agency problems,. | Organizational Architecture Chapter Four Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Self-interested Behavior Fundamental assumption of economics: Individuals act in their own self-interest to maximize utility. Opportunity set: work for employer, work on other projects, relax, etc. Resource constraints: time, money, knowledge, etc. Utility: preferences for money, working conditions, leisure, etc. 4- Team Production Individuals form teams or firms because: can produce more in a team than they can acting alone generate a larger opportunity set Firm is defined as a nexus of contracts among resource owners who voluntarily contract with individual team members to benefit both the firm and the individuals. Firms in an economic sense include for-profit corporations, divisions within a corporation, not-for-profit organizations, and other entities. 4- Firm as a Nexus of Contracts From Brickley, C. Smith, and J. Zimmerman, Managerial Economics and Organizational Architecture, Fifth Edition, (Boston: McGraw-Hill/Irwin, 2009). The firm is a legal entity that can contract with many parties and enforce these contracts in courts of law. labor contracts: employee, union, independent contractors supply contracts: inventory, materials, utilities customer contracts: sales, warranties finance contracts: insurance, leases, franchises, debt, stock Some contracts are explicit written documents and others are implicit oral agreements supported by the reputation of the parties. 4- Principal-Agent Model Principal-agent model Economic model of relationships in a firm Principals are managers or firm owners Agents are employees or independent contractors Agents perform functions for principals Numerous principal-agent relationships exist in firms Agency costs Reductions in firm value caused when agents pursue their own interests to the detriment of the principal (goals are incongruent) A major use of internal accounting systems is

• Kế toán - Kiểm toán
• Accounting for decision making
• Decision making
• Organizational architecture
• Self interested behavior
• Team production
• Decision rights
• Generic budgeting systems
• Decision control
• Cost allocation
• Pervasiveness of cost allocations
• External financial reports
• Death spiral
• Internal services
• Absorption cost systems
• Job order costing
• Allocating overhead to jobs
• Criticisms of absorption cost systems
• Variable costing
• Inaccurate product costs
• Standard costs
• Direct labor
• Target costing
• Marketing variances
• Budget volume estimates
• Flexible overhead budget
• Management accounting
• Business strategy
• Competitive forces
• Responsibility accounting
• Transfer pricing
• Profit center
• Investment centers
• Financial accounting
• Lecture Financial accounting
• Accounting information
• Accounting systems
• External financial reporting
• Ethical obligations
• Decision making in accounting
• Ethical reasoning
• Cognitive processes
• Ethical decision making
• Organizational ethics
• Corporate governance
• Professional judgment in accounting
• Incremental analysis
• Decision making process
• Financial statements
• Making business decision
• Business decision tool
• Lecture Accounting
• The impact of accounting disclosures on individual investors’ decision making
• Vietnam Stock Market
• The Vietnam stock market
• Vietnam Stock Exchange
• Accounting information groups
• The investors' decision making
• Product management
• Cost control
• Performance evaluation
• External reports
• Nature of costs
• Opportunity costs
• Cost variation
• Operating leverage
• Opportunity cost
• Opportunity cost of capital
• Capital budgeting
• Interest rate fundamentals
• Accounting for partnerships
• Partnership agreement
• Analyzing receivables
• Managerial accounting
• Costs for decision making
• Payroll accounting
• Pay period
• Payroll taxes