About the Instructors ix About the Exam xi Introduction xiv Section A. External Financial Reporting Decisions 1 Topic 1. Financial Statements 2 Overview of Financial Statements and Income Statement 2 Statement of Changes in Equity and Balance Sheet 11 Statement of Cash Flows and Financial Statement Articulation 17 Integrated Reporting 25 Topic 2.1 Recognition, Measurement, Valuation and Disclosure - Assets 31 Receivables 31 Inventory 37 Accounting for Investments in Other Entities 47 Long-term Assets 55 Topic 2.2 Recognition, Measurement, Valuation and Disclosure - Liabilities 63 General Liabilities 63 Leases 67 Topic 2.3 Accounting for Income Taxes and Revenue Recognition 73 Accounting for Income Taxes 73 Revenue Recognition 79 Topic 2.4 IFRS Differences 87 IFRS Differences in Accounting 87 Section A Review Questions 91 Section B. Planning, Budgeting, and Forecasting 95 Topic 1.

Strategic Planning 96 Strategy and SWOT 96 Strategic Objectives and Generic Strategy 101 Specific Strategy Tools 105 Topic 2. Budgeting Concepts 111 Strategy Implementation and Budgeting 111 The Budgeting Process 115 Building Budget Standards 119 Topic 3. Forecasting Techniques 123 Regression Analysis 123 Expected Value Computations and Learning Curve Analysis 129 Topic 5. Annual Profit Plan and Supporting Schedules 135 Sales Budgets and Production Budgets 135 Budgeting for Production Costs 141 Wrapping Up Operational Budgeting 149 Capital Expenditures and Cash Budgets 157 Topic 4. Budget Methodologies 165 Comparing Flexible, Rolling, Activity-Based, Zero-Based, and Project Budgeting 165 Topic 6. Top-level Planning and Analysis 175 Pro Forma Financial Statements 175 Section B Review Questions 185 Section C. Performance Management 189 Topic 1. Cost and Variance Measures 190 Flexible Budgets and Performance Analysis 190 Sales Revenue Variances 197 Direct Material and Direct Labor Cost Variances 207 Factory Overhead Cost Variances 217 Management Work with Variance Analysis 225 Topic 2.

Responsibility Centers and Reporting Segments 233 Business Units and Performance Evaluation 233 Transfer Pricing 241 Topic 3. Performance Measures 251 Evaluating Product and Customer Profitability 251 Return on Investment and Residual Income 259 The Balanced Scorecard 267 Section C Review Questions 275 Section D: Cost Management 281 Topic 1. Measurement Concepts 282 Cost Drivers and Cost Flows 282 Variable Costing versus Absorption Costing 289 Joint Product Costing 299 Topic 2. Costing Systems 309 Job Order Costing 309 Process Costing 315 Activity-Based Costing (ABC) and Life Cycle Costing 323 Topic 3. Overhead Costs 335 Support Department Costing 335 Variable and Fixed Overhead Costs 345 Topic 4. Supply Chain Management 353 Inventory Management and Production Systems 353 The Theory of Constraints 359 Managing Capacity 367 Topic 5. Business Process Improvement 373 Creating and Capturing Value 373 Managing Quality 379 Section D Review Questions 387 Section E: Internal Controls 391 Topic 1. Governance, Risk, and Compliance 392 Internal Control Structure and Management Philosophy 392 Internal Control Policies for Safeguarding and Assurance 395 Internal Control Risk 399 Corporate Governance 401 External Audit Requirements 403 Topic 2.

Systems Controls and Security Measures 407 Information System General Controls 407 Information System Application Controls 413 Section E Review Questions 417 Section F: Technology and Analytics 421 Topic 1: Information Systems 422 Accounting Information Systems 422 Enterprise Resource Planning Systems 425 Enterprise Performance Management Systems 427 Topic 2: Data Governance 429 Data Policies and Procedures 429 Life Cycle of Data 433 Controls Against Security Breaches 435 Topic 3: Technology-Enabled Finance Transformation 437 System Development Life Cycle 437 Process Automation 439 Innovative Applications 441 Topic 4: Data Analytics 443 Business Intelligence 443 Data Mining 445 Analytic Tools 447 Data Visualization 451 Section F Review Questions 453 Review Questions and Answers 457 Appendixes 491 ICMA Content Specification Outlines 491 ICMA Learning Outcome Statements 498 Time-Value of Money Tables 513 Essay Tips 518 CMA Exam Ratio Definitions 520 Index 523.