Chapter 11 - Conversion processes and controls. This chapter presents the following content: Basic features of conversion processes, the components of the logistics function, cost accounting reports generated by conversion processes, risks and controls in conversion processes, | Chapter 11 Conversion Processes and Controls Chapter 11 Basic features of conversion processes The components of the logistics function Cost accounting reports generated by conversion processes Risks and controls in conversion processes IT systems of conversion processes Ethical issues related to conversion processes Corporate governance in conversion processes Study Objectives 1. On the topic, “Challenges Facing Financial Accounting,” what did the AICPA Special Committee on Financial Reporting suggest should be included in future financial statements? Non-financial Measurements (customer satisfaction indexes, backlog information, and reject rates on goods purchases). Forward-looking Information Soft Assets (a company’s know-how, market dominance, marketing setup, well-trained employees, and brand image). Timeliness (no real time financial information) Real World Nissan Motor Co. Uses cutting-edge technology and robotic assemblers Robots can make 12 welds per second Suppliers are tied into the line by computer Pars arrive in the order they are used This technology lets them handle four different models in random order Vehicles are finished in 13 hours Can make 400,000 vehicles every 5 day when running 2 shifts Conversion processes involve activities related to the transformation of resources into goods or services. Resources include: Materials Labor Overhead Various other expenses necessary to run the operating facility SO 1 Basic features of conversion processes Basic Features of Conversion Processes Major activities within this process include Operational planning, Optimizing use of employees, property, and inventories, Controlling production flows, Ensuring product quality, and Preparing related cost accounting and financial accounting records. SO 1 Basic features of conversion processes Basic Features of Conversion Processes Exhibit 11-1 Conversion Processes within the Overall System SO 1 Basic features of conversion processes Basic Features of Conversion . | Chapter 11 Conversion Processes and Controls Chapter 11 Basic features of conversion processes The components of the logistics function Cost accounting reports generated by conversion processes Risks and controls in conversion processes IT systems of conversion processes Ethical issues related to conversion processes Corporate governance in conversion processes Study Objectives 1. On the topic, “Challenges Facing Financial Accounting,” what did the AICPA Special Committee on Financial Reporting suggest should be included in future financial statements? Non-financial Measurements (customer satisfaction indexes, backlog information, and reject rates on goods purchases). Forward-looking Information Soft Assets (a company’s know-how, market dominance, marketing setup, well-trained employees, and brand image). Timeliness (no real time financial information) Real World Nissan Motor Co. Uses cutting-edge technology and robotic assemblers Robots can make 12 welds per second Suppliers are tied
