Lecture1 Finance Review and Introduction to ERP

FIN419

Learning Objectives

Review Finance basic concepts

Introduction to SAP

Review an Introduction to SAP

Understand the definition of ERP and business processes

Understand the inter-related nature of an ERP system and the impact on finance

Explain the silo effect

Review SAP Business Suite and basic concepts (master data and transactional data)

Understand Accounting in SAP

Explain the goal of FI and CO

Understand the basics of SAP navigation

Finance Review Forms of Business Organizations

The corporate form of business is the standard method for solving the problems encountered in raising large amounts of cash.

Three major forms in the United States

Sole proprietorship, a business own by one person

Partnership, a business own by two or more individuals or entities

General, with unlimited debt liability

Limited, with some partners with limited debt liability

Corporation, a legal “person” distinct from owners and with limited liability

General, subject to double taxation

S Corporation is taxed through its shareholders avoiding double taxation

Limited liability company allows to operate and tax like a partnership but retain limited liability for its owners

Finance Review A Comparison

Fall 2015

Corporation

Partnership

Liquidity

Shares can be easily exchanged

Subject to substantial restrictions

Voting Rights

Usually each share gets one vote

General Partner is in charge; limited partners may have some voting rights

Taxation

Double

Partners pay taxes on distributions

Reinvestment and dividend payout

Broad latitude

All net cash flow is distributed to partners

Liability

Limited liability

General partners may have unlimited liability; limited partners enjoy limited liability

Continuity

Perpetual life

Limited life

Corporations account for the largest volume of business (in dollar terms) in the U.S. Advantages include limited liability, unlimited life, separation of ownership and management (ability to own shares in several companies without having to work for all of them), liquidity, and ease of raising capital. Disadvantages include separation of ownership and management (agency costs) and double taxation. Recent tax laws reduce the level of double taxation, but it has not been eliminated.

Although the corporate form of organization has the advantage of limited liability, it has the disadvantage of double taxation. A small business of 75 or fewer stockholders is allowed by the IRS to form an S Corporation. The S Corp. organizational form provides limited liability but allows pretax corporate profits to be distributed on a pro rata basis to individual shareholders, who are only obligated to pay personal income taxes on the income. A similar form of organization is the limited liability corporation, or LLC. LLC’s are a hybrid form of organization that falls between partnerships and corporations. Investors in LLC’s have the protection of limited liability, but they are taxed like partnerships. LLC’s first appeared in Wyoming in 1977 and have skyrocketed since. They are especially beneficial for small- and medium-sized businesses such as law firms or medical practices.

A Corporation by Another Name…Corporations exist around the world under a variety of names. Table 1.2 lists several well-known companies, along with the type of company in the original language.

Finance Review The Goal of Financial Management

The goal is to increase the value of the firm by maximizing investments while minimizing financing.

V = Σ CFt / (1+ i)t

Maximize the current value per share of the exiting stock

Fall 2015

Learning Objective: Apply goals of financial management in making decisions

Possible Goals

Profit Maximization – this is an imprecise goal. Do we want to maximize long-run or short-run profits? Do we want to maximize accounting profits or some measure of cash flow? Because of the different possible interpretations, this should not be the main goal of the firm.

Other possible goals that students might suggest include minimizing costs or maximizing market share. Both have potential problems. We can minimize costs by not purchasing new equipment today, but that may damage the long-run viability of the firm. Many dot.com companies got into trouble in the late 1990’s because their goal was to maximize market share. They raised substantial amounts of capital in IPO’s and then used the money on advertising to increase the number of “hits” on their site. However, many firms failed to translate those “hits” into enough revenue to meet expenses, and they quickly ran out of capital. The stockholders of these firms were not happy. Stock prices fell dramatically, and it became difficult for these firms to raise funds. In fact, many of these companies have gone out of business. The Goal of Financial Management From a stockholder (owner) perspective, the goal of buying the stock is to gain financially. Thus, the goal of financial management in a corporation is to maximize the current value per share of the existing stock. Is it ethical to sell a product that is known to be addictive and dangerous to the health of the user even when used as intended? Is the fact that the product is legal relevant? Do recent court decisions against the companies matter? What about the way companies choose to market their product? Are these issues relevant to financial managers?

How do we go about maximizing shareholder wealth?

Finance Review Agency Cost and Agency Problem

Agency relationship is the relationship that exist between stockholders and management

Principal hires an agent to represent its interests

Stockholders (principals) hire managers (agents) to run the company

Agency cost is the conflict of interest between stockholders and management

Stockholders goal is to increase the return on its investments (firm’s higher value)

Management may be more concern about its compensation or job security

Agency problem

Conflict of interest between principal and agent

Finance Review Do Managers Act in the Stockholders’ Interest?

Alignment between management and stockholders goals?

Managerial compensation

Incentives can be used to align management and stockholder interests

Incentives need to be carefully structured to insure that they achieve their goal

Can management be removed if goals are different?

Corporate control

Proxy fights is the mechanism on which unhappy stockholders can remove management

Poorly manage firms are more attractive to takeovers

Finance Review Regulation

The Securities Act of 1933 and the Securities Exchange Act of 1934

Issuance of Securities (1933)

Creation of SEC and reporting requirements (1934)

Sarbanes-Oxley (“SOx”)

Increased reporting requirements and responsibility of corporate directors

Financial Statements and Cash Flow

Fall 2015

Historically, most regulation has focused on the disclosure of relevant information, thereby putting all investors on an equal playing field.

The Securities Act of 1933 and the Securities Exchange Act of 1934

These Acts provide the basic regulatory framework for the public trading of securities in the United States. The 1933 Act focuses on the issuance of securities, while the 1934 Act established the SEC and addressed other regulatory issues, such as insider trading and corporate reporting.

Sarbanes-Oxley

Following the scandals at Enron, WorldCom, and Tyco, among others, “Sarbox” was enacted in 2002. This Act significantly increased the auditing and reporting requirements that public firms face, and it also explicitly placed the responsibility for any fraud on the corporate directors.

As with any law, however, there is a cost. In response to the added burden, many (particularly small) firms have delisted and others have foregone going public. For others, the cost of compliance has significantly increased, thereby reducing profits.

SAP Introduction

SAP stands for Systems, Applications, and Products in Data processing

Very successful Enterprise Resource Planning (ERP) solution which is used to highly integrate business processes.

Fall 2015

SAP Introduction Name of Company and Software

Name of the Company

SAP AG (Walldorf)

SAP America (New Town Square)

Name of the Software

SAP R/2

SAP R/3

SAP ERP

Fall 2015

SAP Introduction Company Statistics

SAP AG

Founded in Walldorf, Germany in 1972

World’s Largest Business Software Company

World’s Third-largest Independent Software Provider

Company Statistics

Over 40,000 employees in more then 50 countries

1500 Business Partners

36,200 customers in more then 120 countries

12 million users

100,600 installations

Fall 2015

SAP is the world’s largest inter-enterprise software company and the world’s third-largest independent software provider overall. We have a rich history of innovation and growth that has made us a true industry leader.

SAP Americas

12 Million Users. 100,600 Installations. 1,500 Partners.

SAP Americas is a subsidiary of SAP AG, the world’s largest inter-enterprise software company and the third-largest software supplier overall. SAP Americas’s corporate headquarters is located in Newtown Square, PA, a suburb of Philadelphia. Our officers and executives lead a team of professionals dedicated to delivering high-level customer support and services.

Founded in 1972 as Systems Applications and Products in Data Processing, SAP has a rich history of innovation and growth that has made us the recognized leader in providing collaborative business solutions for all types of industries — in every major market. The company, headquartered in Walldorf, Germany, employs more than 37,700 people in more than 50 countries, and serves more than 34,600 customers worldwide.

Experience, Knowledge, and Technology for Maximizing Business

SAP has leveraged our extensive experience to deliver mySAP Business Suite, the definitive family of business solutions for today’s economy. These solutions are open and flexible, supporting databases, applications, operating systems, and hardware from almost every major vendor. What’s more, mySAP Business Suite allows employees, customers, and business partners to work together successfully — anywhere, anytime.

By deploying the best technology, services, and development resources, SAP has delivered a business platform that unlocks valuable information resources, improves supply chain efficiencies, and builds strong customer relationships. And through the Global Solution Center, SAP Americas identifies customer needs and develops solutions to meet these needs.

SAP is listed on several exchanges, including the Frankfurt Stock Exchange and the New York Stock Exchange, under the symbol “SAP.”

SAP Introduction From SAP R/3 to HANA

Database layer

From Oracle/ Ms SQL

To SAP HANA

Presentation layer

From SAP GUI

To SAP Fiori

Fall 2015

Central database stores all data and application programs.

The application gives access to the database to read and write data.

The presentation allows for input/output of data to the users

3-tier client server system

Web server

Internet transaction server

Brings it to a single database across the world.

What is Client-server Computing?

The short answer: Client/server is a computational architecture that involves client processes requesting service from server processes. The long answer: Client/server computing is the logical extension of modular programming. Modular programming has as its fundamental assumption that separation of a large piece of software into its constituent parts (“modules”) creates the possibility for easier development and better maintainability. Client/server computing takes this a step farther by recognizing that those modules need not all be executed within the same memory space. With this architecture, the calling module becomes the “client” (that which requests a service), and the called module becomes the “server” (that which provides the service). The logical extension of this is to have clients and servers running on the appropriate hardware and software platforms for their functions. For example, database management system servers running on platforms specially designed and configured to perform queries, or file servers running on platforms with special elements for managing files. It is this latter perspective that has created the widely-believed myth that client/server has something to do with PCs or Unix machines.

SAP Introduction Software Applications

Industry Solutions (Business Suite & Business All in One)

SAP ERP

SAP CRM

SAP SCM

SAP SRM

SAP PLM

Digital (Business Suite & Business All in One)

SAP S/4 on HANA

Success Factors & Fieldglass

Ariba, Concur

Hybris

Fall 2015

SAP Introduction SAP 3-Tier Architecture

3-tier client-server architecture

Database layer

One single data repository

Application layer

One or more, help distribute work load

Client layer (Presentation layer )

Graphical User Interface or Web Interface (GUI)

Fall 2015

Central database stores all data and application programs.

The application gives access to the database to read and write data.

The presentation allows for input/output of data to the users

3-tier client server system

Web server

Internet transaction server

Brings it to a single database across the world.

What is Client-server Computing?

Enterprise Resource Planning ERP and Business Processes

Enterprise Resource Planning

System that integrate the management of core business processes end to end within an Enterprise

Benefits

Integration / Improve profitability, productivity and reduce TCO

Standardization / Governance/ Single source of truth / Improve productivity

Audit trail / Governance and risk reduction

Immediate availability of data (reports) / Financial management

Business Processes

Sequence of tasks or activities that produce desired outcomes

Key processes

Operations

Finance and Accounting

Human Resources

Sales and Distribution

Procurement

Processes interrelated with other processes

Processes may have sub-processes

Regardless of their type or size, successful organizations and industries use processes and enterprise systems to complete the work needed to achieve their goals.

A business process, illustrated in Figure 1-2, is a set of tasks or activities that produce desired outcomes.

Because different functional areas or departments carry out the various process steps, effective communication and collaboration among the departments is essential to the smooth execution of these processes.

Enterprise Resource Planning Integrated Processes

Order to Cash

Procurement to Pay

Sales Order

Capacity Materials

Load schedule

Procurement

Receiving

Manufacturing

Shipping

Billing

Incoming Payment

Sourcing

Purchase Order

Receiving

Invoice receipt

Outgoing payment

Enterprise Resource Planning Integrated Sub-processes

Month End-Close

Post recurring entries

Complete asset transactions

Run depreciation

Complete interco transactions

Complete monthly accts maintenance

Post accruals

FASB 52

Consolidation and report

Close manufacturing accounting

Close AR and AP

Enterprise Resource Planning Business Processes Impact on Finance

ERP covers end to end processes

All process are cross functional requiring inter-dependent tasks between the organization’s groups.

Share responsibilities among functional areas

Each process has a trigger and an outcome

The final outcome of all processes is always financial

Finance

Procurement

Process

Fulfillment Process

Production Process

Inventory process

Enterprise Resource Planning Silo Effect and its Implications

Silo Effect

The tendency to focusing on functional objectives without regard to process objectives

Focus optimizing functional goals vs. process goals

Implications

Impossible to manage processes that are geographically dispersed without utilizing modern information systems

Lack of communication/coordination among functions

Reduction of productivity

Reduction of profitability

Lack of standardization

Lack of real time reporting

Fall 2015

Most companies are organized according to functional departments, which group together related activities and assets under specialized management controls. Although this approach enables companies to focus resources on specific activities, it also creates communication difficulties and delays between the highly specialized groups. Business processes cut across the vertical barriers (silos) that characterize the functional structure. For this reason they require cross-functional communication and collaborative execution. Enterprise systems allow companies to effectively manage business processes across functional areas and institutional boundaries. They perform this task by removing barriers to sharing and accessing information, thereby providing a holistic platform to execute integrated business processes consistently and efficiently. One of the key benefits to managing business processes with an integrated enterprise system is that process data are collected throughout the execution of each step of the process. Managers can then use these data to monitor and improve the organization’s processes. Enterprise systems enable companies to achieve operational efficiency through transparency across functional areas, and they provide consistent information for managerial decision-making. All business processes have an impact on the organization’s financial status, and the real-time impact of process execution can be monitored and analyzed through the use of an integrated enterprise system.

SAP Business Suite SAP ERP Solution Map

SAP Business Suite Solutions and SAP ERP (Core)

FSCM

APO

PLM

GTS

CRM

SCM

SNC

SRM

Business Warehouse

Advance Planning

Product Lifecycle

Global Trade

Customer Rel Mng

Supply Collab

Mfg Execution

Supply Chain

Supplier Rel, Mng

Exchange Infrastructure

FSCM

Finance and Controlling

Human Resources and Payroll

Purchasing &

Inventory

Quality

S&D

Plant Mnt

Production Planning

SAP Basic Concepts Client and Data Types

Is the highest organizational level in the system.

Each client represents a group of companies or a firm regardless of its size.

Organizational (Configuration)

Used to represent structure in an enterprise

Master data

Reusable data relevant to multiple business processes

Transactional (Application)

Data that reflects outcomes of business processes

Application Server

Client 020

Client 010

Configuration

Master data

Configuration

Master data

Application data (transactions)

SAP Basic Concepts Master Data

Master Data

Set of reusable data that will influence the flow of transactional data within the system. It is the most important element of a system design and operational integrity.

Information is organized into views which are assigned to organizational elements.

Data at the client level can be used by all company codes.

Master Data is created centrally and can be used by all applications and all authorized users

Chart of Accounts

Customers

Vendors

Materials

Bill of Materials

Cost Centers

Profit Centers

HR Master record

SAP Basic Concepts Tables Relationship (Master Data)

Source: Google.com | Search for “sap tables pdf”

SAP Basic Concepts Transactional Data

Transaction Data

Data that represents an event within the system and reflects the consequences of executing process steps

Whenever possible, master data is copied during transaction processing, thus avoiding the re-entry of data.

When a business process transaction is executed in the system and saved, a document is created.

Journal entry (Chart of Accounts)

Billing (Customers)

Invoice (Vendors)

Good receipt (Materials)

Manufacturing (Bill of Materials)

Journal entry (Cost Centers)

Journal entry (Profit Centers)

Payroll (HR Master record)

SAP Basic Concepts Tables Relationship (Transactional Data)

Source: Google.com | Search for “sap tables pdf”

Accounting in SAP SAP ERP Financials Features

Standardized business processes

Single version of truth

Improved transparency

Accurate prediction of future costs and profits

Tighter control of overhead

Analysis of profitability based on criteria that is important to you

Improved control of project initiatives

Accurate and timely reporting

Fall 2015

Standardized business processes across all of your subsidiaries, divisions, and departments, while factoring in individual requirement help to improve productivity and interoperability of your employees.

Every one in the company accesses the same data, same transactional details, and same reports providing enhanced information sharing across departmental boundaries.

You can drill down from summarized consolidated statements to the individual accounting entries and associated information. You also have detailed audit trail accountability.

Detailed business information from sales, manufacturing, procurement, and other systems are integrated and can provide information useful in predicting costs and profits.

FI support planning, budgeting, analyzing and controlling of direct and indirect costs at the departmental level. The support of activity based costing provides even greater control over planning, budgeting, and analyzing the costs of business activities in your company.

Fully customizable framework for profitability analysis allows you to calculate and analyze contribution margin by any criteria relevant to your business.

You can analyze your complex projects for recording overhead costs, capitalizing investments, or manufacturing products per customer specifications.

With numerous standard reports and reporting tools you can quickly design custom reports that generate consistent, timely, and accurate reporting across all levels of your company.

Accounting in SAP Financial (FI) and Managerial Accounting (CO)

Fall 2015

What is Managerial Accounting?

There are seven key differences between financial accounting and managerial accounting:

 Users: Financial accounting reports are prepared for external parties, whereas managerial accounting reports are prepared for internal users.

 Emphasis on the future: Financial accounting summarizes past transactions. Managerial accounting has a strong future orientation.

 Relevance of data: Financial accounting data should be objective and verifiable. Managerial accountants focus on providing relevant data even if these data are not completely objective and verifiable.

 Less emphasis on precision: Financial accounting focuses on precision when reporting to external parties. Managerial accounting aids decision makers by providing good estimates as soon as possible rather than waiting for precise data later.

 Segments of an organization: Financial accounting is concerned with companywide reports. Managerial accounting focuses on the segment reports. Examples of segments include: product lines, sales territories, divisions, departments, etc..

 Managerial accounting–no externally imposed rules: Financial accounting conforms to GAAP and IFRS. Managerial accounting is not bound by GAAP and IFRS.

 Managerial accounting–not mandatory: Financial accounting is mandatory because various outside parties require periodic financial statements. Managerial accounting is not mandatory.

Accounting in SAP Finance (FI) and Controlling (CO)

FSCM

Finance and Controlling

Human Resources and Payroll

Purchasing &

Inventory

Quality

S&D

Plant Mnt

Production Planning

Financial accounting (FI) is meant for external reporting.

FI is structured and mandated by legal requirements.

Management Accounting (CO) purpose is for internal management information regarding cost and revenue

Finance (FI) and Controlling (CO) FICO Modules and Corporate Finance

FI-AP

FI-GL

FI-AR

PCA

CCA

IOA

Controller

Treasurer

Cash Manger

Credit Manager

Financial planning Manager

Tax Manager

Cost Accounting Manager

Financial Accounting Manager

Finance (FI) and Controlling (CO) Relationship/Dependency

CO is the foundation for managerial accounting and it is closely intertwined with FI

CO controls the Sales, COGS and expense to determination the profitability element on the balance sheet which is controlled by FI

Profit Centers

Assets

Liabilities

Equity

Sales

COGS

Cost centers

Expense

Sales

COGS

Expense

SAP Finance (FI) Goal

Financial accounting is designed to collect the transactional data that provides a foundation for preparing the standard portfolio of reports.

In general, these reports are primarily, but not exclusively, directed at external parties.

Standard reports include:

Balance Sheet

Income Statement

Statement of Cash Flows

Assets

Fixed

Liabilities+ Equity

Equity

Current

Long term

SAP Finance (FI) Sub-modules

General Ledger (GL) use to record the financial impacts of business process steps. It constrains the data for financial reporting.

Accounts Receivables (AR) is associated with the fulfillment process and is used to manage money owned by customers for good and services sold

Accounts Payables (AP) is associated with the procurement process and is used to managed money owned by vendors for the purchase of materials and services

Asset Management (AM) is used to record data related to the purchase, use and disposal of assets.

SAP Controlling (CO) Goal

Managerial accounting – termed controlling – is designed to collect the transactional data that provides a foundation for preparing internal reports that support decision-making within the enterprise.

These reports are exclusively for use within the enterprise and include:

Cost center performance

Profit center performance

Budget analysis

Sales Salaries Rent Dep Others 80 50 35 15

SAP Controlling (CO) Sub-modules

Cost center Accounting (CCA) use to control the cost incurred in the organization by department

Profit Center Accounting(PCA) use to control the profit and losses of the organization by business

Internal Order Accounting (IOA) use to control certain types of cost that requires monitoring through out the business process

Product Costing (PC) use to plan for the cost of materials

Profitability Analysis (COPA) use to evaluate profitability by market segments and classify them by multiple dimensions (sales org, business areas, plant, company code, etc)

SAP Navigation SAP Logon Screen

Click on the icon in your desktop.

If not, Find and double-click on the icon depicted on the left side of this page that you can find on your desktop. If it is not there, choose Start ► All Programs ► SAP Front End ► SAP Logo

Select system ID: BK8

SAP Navigation User Logon Screen

Enter the following information:

Client: 126

User ID: GBI-XXX (001 to 025)

Password: TampaPAS

Enter a new password

Fall 2015

Enter Client, Server and Password

Client is a numeric field and this number represents a whole business entity.

Users are client specific which means that having a user identification in one client will only allow access to that particular client.

The system settings are stored in a file on your machine called the saplogin.ini file. This file is normally preconfigured centrally and then made available to all the users. Once you have been provided with the SAP Logon, you need a username and password to logon to the SAP system. The username and password is unique for each user and you do have the option to change your password using the New password button available on the screen.

SAP Navigation Application Tool-bar

Enter icon

Command (T-code)

Save icon

Back button

Exit button

Cancel button

Print button

Find/Expand icons

Scroll icons

Create a new session

Create a desktop shortcut

Help icon

Fall 2015

Learning objective: basic navigation

You have an option to start an application by directly entering its transaction code in the command field which is hidden as default.

The push buttons in the standard toolbar are shown on every SAP screen. The push buttons that cannot be used in a specific application are deactivated. You can view the flag with the name or function of the push button if you place the cursor on it for a few seconds.

SAP Navigation User Settings

User specific settings

Use tcode SU3 to define your defaults settings

Language: EN (English)

Decimal notation: 1,234,567.89

Date format: MM/DD/YYYY

Save your entries

SAP Navigation SAP Easy Access Structure

The left side of the screen contains a tree hierarchy of the menus available to you in the SAP system.

The menu bar

Logistics

Materials Management

Purchasing (PU)

Inventory Management (IM)

Sales and Distribution (SD)

Production (PP)

Quality (QA)

Accounting

Financial Accounting (FI)

Financial Supply Chain (FSC)

Controlling (CO)

Human Resources (HR)

The transaction code (T-code)

Fall 2015

SAP Navigation Favorites Folder

If you frequently use a transaction, you can use drag&drop to add it to your favorites (or choose Favorites ► Add).

You can then double-click it to run it without having to navigate through the SAP Easy Access menu. Furthermore you can add folders, reports, files and web addresses as favorites.

SAP Navigation Transaction code

Every business transaction (not every screen) has a corresponding transaction code in SAP.

To display transaction codes choose Extras ► Settings and select Display technical names

You can use various control parameters to influence what happens to the session when you call a transaction.

/n. Exits current transaction

/o. Opens a new session

SAP Navigation Screen Features

Manu Bar

Title Bar

Customizing display bottoms

Entry

Required field

Default entry field

Optional entry field

Tool bars

Message bar

Fall 2015

SAP Navigation System Messages

E –Error

An invalid entry has been made. The cursor moves to the field where the error has occurred.

W-Warning,

Indicates a possible error. The user can continue without changing.

I –Information

Confirms a transaction was posted.

A –Abnormal End,

Indicating serious system error.

Fall 2015

SAP Navigation System Help

F1 Key. It give you help about fields and technical information by providing explanations for fields, menus, functions and messages

F4 Key. It gives you information and possible entries

Further help can be found in the help menu. Choose Application Help for context-sensitive help on the transaction you are currently using. Choose SAP Library to open the online SAP Library. You can also access it on the Internet at help.sap.com

SAP Navigation Logging Off

For security purposes it is important to log off SAP at the end of the day or whenever you leave your PC.

Your username is linked with every transaction you perform to provide an audit trail.

Fall 2015

When reviewing transactions or running reports the username of the person responsible for entering or maintaining system information is displayed.

Financial AccountingManagerial Accounting

1. UsersExternal persons whoManagers who plan for

make financial decisionsand control an organization

2. Time focusHistorical perspectiveFuture emphasis

3. VerifiabilityEmphasis onEmphasis on

versus relevanceobjectivity and verifiabilityrelevance

4. Precision versusEmphasis on Emphasis on

timelinessprecisiontimeliness

5. SubjectPrimary focus is onFocus on

companywide reportssegment reports

6. RulesMust follow GAAP / IFRSNot bound by GAAP / IFRS

and prescribed formatsor any prescribed format

7. RequirementMandatory forNot

external reportsMandatory

Sheet1


	Financial Accounting	Managerial Accounting

1. Users	External persons who	Managers who plan for
	make financial decisions	and control an organization


2. Time focus	Historical perspective	Future emphasis


3. Verifiability	Emphasis on	Emphasis on
versus relevance	objectivity and verifiability	relevance


4. Precision versus	Emphasis on	Emphasis on
timeliness	precision	timeliness


5. Subject	Primary focus is on	Focus on
	companywide reports	segment reports


6. Rules	Must follow GAAP / IFRS	Not bound by GAAP / IFRS
	and prescribed formats	or any prescribed format


7. Requirement	Mandatory for	Not
	external reports	Mandatory

Page &P

Lecture1 Finance Review and Introduction to ERP

Sheet1

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