Professional Documents
Culture Documents
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Concerned with the provisions and use of accounting
information to managers within organizations, to
provide them with the basis to make informed
business decisions that will allow them to be better
equipped in their management and control functions.
Management accounting information is:
designed and intended for use by managers within the
organization
usually confidential and used by management
forward-looking
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compare your accounts with original budgets or
forecasts
manage your resources better
identify trends in your business
highlight variations in your income or spending
which may require attention
recording business transactions
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measuring results of financial changes
projecting financial effects of future transactions
preparing internal reports in a user-friendly format
planning and control
co-ordination and monitoring of strategy/performance
decision making
K
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Mgt Accounting is
based on data of Financial and Cost Accounting. Historical
data is used to make future decisions. The correctness and
effectiveness of managerial decisions will depend upon the
quality of data on which these decisions are based. If financial
data is not reliable then Mgt Accounting will not provide
correct analysis.
the application of Mgt Accounting
will be useful to person connected with Decision making
process as they have proper understanding of Mgt Accounting
and related subjects such as Statistics, Economics, Principles
of Mgt, Engineering etc.,
In Mgt Accounting decision making
based on facts and figures, there is a tendency to make
decisions intuitively. Mgt may avoid lengthy courses of
deciding things and may take an easy course of arriving at
decision, using intuitive.
The tools and
techniques of Mgt Accounting provide only information and
not decision. Decisions and their implementations are done, by
Mgt. So it has supplementary service function and has no final
say in taking decisions and their implementations.
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Introduction of this system is costly
affair and can be used by big concerns only. Smaller concerns
cant afford to use this system because of heavy cost.
Mgt Accounting is only in a
developmental stage. The technique and tools used by this
system give differing results. The conclusions taken from
analysis and interpretation are not the same. It will take some
time to take a final shape.
^ The interpretation of financial information
depends upon the personal judgement of the interpreter.
Personal prejudices and bias affect the objectively of
decisions.
The Installation of Mgt
Accounting involves basic changeless in organizational setup.
New rule and regulations are to be framed which affect a
number of personnel and hence there is a possibility of
resistance from some or other.
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