Essential Controller

Steven M. Bragg, CPA, has been the chief financial office or controller of four companies, as well as a consulting manager at Ernst & Young and auditor at Deloitte. He is the author of over thirty books primarily targeted toward controllers and their needs. Bragg received a master’s degree in finance from Bentley College, an MBA from Babson College, and a bachelor’s degree in economics from the University of Maine.

• Preface ix Chapter 1 Accounting in the Corporation 1Importance of This Chapter 1Tasks of the Accounting Function 2Role of the Accounting Function 5Role of the Controller 6Impact of Ethics on the Accounting Role 8Evolving Role of Accounting 12Chapter 2 Controller’s Responsibilities 13Importance of This Chapter 13Variations on the Title 14Planning Function 14Control Function 16Reporting Function 17Accounting Function 17Additional Controller Functions in Smaller Companies 18Controller’s Job Description 22Relationship of the Controller to the Chief Financial Of cer 24Future Changes in the Controller’s Origins and Responsibilities 26Managing Rapid Growth 28Chapter 3 Chief Financial Of cer: From Controller to Facilitator of Change 31Importance of This Chapter 31Understanding What Chief Executive Of cers Want 32Task of the CFO 32Develop and Communicate a Compelling Finance Agenda 33Build a Commitment to Change within Finance 36Change Executive Management Practices 40Enlist the Support of the Chief Executive Of cer 42Mobilize the Organization 44Institutionalize Continuous Improvement 46Chapter 4 Operational Accounting 49Importance of This Chapter 49Create Departmental Job Descriptions 50Create a Departmental Training Program 52Clear Out Excess Documentation 55Streamline the Accounting Work- ow 56Document All Major Processes 58Correct the Underlying Causes of Errors 59Use Best Practices 62Outsource Selected Accounting Functions 64Chapter 5 Cost Accounting and Costing Systems 71Importance of This Chapter 71Purpose of Cost Accounting Information 72Input: Data Collection Systems 73Processing: Data Summarization Systems 77Processing: Job Costing 79Processing: Process Costing 87Processing: Standard Costing 90Processing: Direct Costing 93Processing: Throughput Costing 96Processing: Activity-based costing 101Processing: Target Costing 103Outputs: Cost Variances 107Chapter 6 Ratio and Trend Analysis 113Importance of This Chapter 113How to Use Ratios and Trends 114A Caveat 115Measures for Pro tability 118Measures for the Balance Sheet 122Measures for Growth 128Measures for Cash Flow 129Measures for Non nancial Performance 132Interrelationship of Ratios 152Setting Up a System of Ratios and Trend Analyses 154Chapter 7 Internal Control Systems 157Importance of This Chapter 157Objectives 158Responsibility for Internal Controls 159Examples of Internal Controls 161When to Eliminate Controls 164Types of Fraud 167Preventing Fraud 169How to Deal with a Fraud Situation 174Foreign Corrupt Practices Act 176Chapter 8 The Fast Close 179Importance of This Chapter 179Different Types of Fast Close 180How to Achieve a Fast Close 181Enhanced Closing Process 196Chapter 9 Internal Audit Function 197Importance of This Chapter 197Reporting Relationships 198Composition of the Audit Committee 199Role of the Audit Committee 201Internal Audit Objectives 203Internal Audit Activities 206Managing the Internal Audit Function 209Chapter 10 Recruiting, Training, and Supervision 215Importance of This Chapter 215Recruiting Sources 216Factors to Consider When Recruiting 219Factors to Consider When Promoting 221Importance of Reduced Turnover 223Importance of Developing Career Plans for Employees 228Importance of Communications with Employees 231How to Motivate Employees 233Chapter 11 Controller’s Role in Investor Relations 235Importance of This Chapter 235Objectives of the Investor Relations Function 236Evolving Nature of the Function 237Communication Vehicles forInvestor Relations 238Investor Relations Message Recipients 239Information Needs of the Financial Analyst 240Information Needs of Other Groups 243Disclosure Policy 243Organization Structure for Investor Relations 245Role of the Controller and Other Principals 246Some Suggested Financial Market Objectives 250Some Suggested Methods 251Chapter 12 Taxation Strategy 253Importance of This Chapter 253Accumulated Earnings Tax 255Cash Method of Accounting 256Inventory Valuation 257Mergers and Acquisitions 258Net Operating Loss Carryforwards 259Nexus 261Project Costing 262Property Taxes 262S Corporation 263Sales and Use Taxes 264Transfer Pricing 266Unemployment Taxes 269About the Author 271Index 273