E1.21 The nature of management accounting
Management accounting is mainly focusing on future outcomes and results. It is used by the management to plan and forecasts the actions that are to be taken. The information collected is used for making decisions regarding the future.
Management accounting is concerned with that form of accounting that aims to eliminate, manage, and control unnecessary costs to increase the profitability of the company. It is thus referred to as cost accounting.
Management accounting guides the employees regarding the future course of action and monitors their activities over time. They undertake to resolve the issues that they face during work and provide the benefits and incentives so that they are satisfied at work. Hence, management accounting influence employee behavior.
E1.22 The nature of management accounting systems
E1.23 Differences between management accounting and financial accounting
The ten activities given are dividing into the duties in the following way:
E1.24 The role of the management accountant
From a job advertisement the following key roles and duties of a management accountant are identified (Malina, M.A. ed., 2017):
The identified roles and duties reflect the major processes and techniques used by the management to improve value. This is because the reports that are prepared by the management accountant on the profit and loss, checking procedures and processes, monitoring of activities, etc., help in increasing the efficiency of the organization and its business. Forecasting and preparing budgets help in analyzing the variances so that accurate and correct decision is taken by the management. They prepare various reports like the inventory reports, performance reports, determining the product costs, etc. which help the management in taking decisions that add value to the organization (Moorthy, M.K., Voon, O.O., Samsuri, C.A.S.B., Gopalan, M. and Yew, K.T., 2012). The techniques used by the management accountant is useful in making analytical decisions that can bring value to the firm.
E1.25 Management accounting information
E1.26 Major influences on management accounting
E1.27 Management accounting information
E1.28 Management accounting information
For discussing how the management accounting information may have contributed to the management of the company, I have selected the annual report of BPH Ltd. The following management accounting information was useful:
E1.29 Management accounting system design
E1.30 Evolution of Management accounting
Moorthy, M.K., Voon, O.O., Samsuri, C.A.S.B., Gopalan, M., and Yew, K.T., 2012. Application of information technology in management accounting decision making. International Journal of Academic Research in Business and Social Sciences, 2(3), p.1.
Cadez, S., and Guilding, C., 2012. Strategy, strategic management accounting, and performance: a configurational analysis. Industrial Management & Data Systems.
Malina, M.A. ed., 2017. Advances in management accounting. Emerald Group Publishing.
Ward, K., 2012. Strategic management accounting. Routledge.
An Atkinson, A., 2012. Management accounting.
Otley, D., 2016. The contingency theory of management accounting and control: 1980–2014. Management accounting research, 31, pp.45-62.
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