Advantages Of Managerial Accounting

(TCO 1) Which of the following is NOT a difference between Financial Accounting and Managerial Accounting?

Collection of information is essential to support the major functions and activities of the organisation. To ascertain this it is essential to have regular reports of the organisation and to do this you need regular financial reports and audits. A true vision of the organisation will give any management a better understanding of their situation and will thus help them to make a good viable decision.

Folk, M., J., Garrsion, H., R., & Noreen, W., E., (2002). Introduction to Managerial Accounting. New York, NY: McGraw-Hill/Irwin.

S., & Hassan, M. K. (2012). The domination of financial accounting on managerial Commerce & Management, 22(4), 306-327. doi:10.1108/10569211211284502

Management accounting is for commercial finance, analyzing past performance and projecting future results aiding in the commercial decision-making. This department defines and measures key targets needed to achieve for McDonald’s business strategy to be successful (McDonald’s Corporation, 2008).

Critically examine the above statements by analysing the contribution of traditional management accounting techniques in an organisation, the necessity for modern management accounting techniques and the role of accountants in the implementation of the modern management accounting techniques in an organisation.

Management determines what they would like to include in the report. No authoritative body requires managerial accounting reports. Management carefully considers behavioral implications, when designing the managerial accounting system.

Financial statements of the company are significant for the investors who would like to venture into the business operation. It gives them the insight whether the business is making profits or it is doomed to fail;

Feedback: The specific purpose of management accounting is to provide information for decision-making authority, for decision-making support, and evaluating and rewarding decision-making performance. LO 4

To illustrate the importance of maintaining a good accounting system for tracking company sales and expense data.

3. Managerial Accounting deals with procuring of data for the organisation's management i.e. to serve the internal users with necessary accounting information to carry out the management tasks of planning, organising, actualising and controlling. " Management Accounting is the presentation of accounting Information in such a way as to assist management in creation of policy and in the day to day operations of an undertaking". 4. Financial Management deals with the process adopted by an organisation for taking financial decisions through analysing and interpretation of financial data for meeting the organisations objectives.

The first impression of the course managerial accounting for managers was that it would involve learning how to manage operations of a firm, especially in relation to its financial records and activities to ensure efficient and successful operation of a firm. I expected to learn how to deal with the final financial records and using them to perform an analysis of the records which will help to make informed decisions. It would also involve learning how to deal with the accounting records to make effective budget plans in considerations of resources available. My expectations of the course

Another main difference between the two different styles of accounting is their relevance of information. Accounting4management.com states that financial accounting mainly is concerned with data that is “objective and verifiable” where managerial accounting is concerned more with information that is relevant to the

According to Will S, Ray H, & Eric E.N. (2009), management accounting is a branch of accounting that is concerned with providing information to managers who direct and control the firm’s operations. Management directing function seeks to effectively use both the human and raw material wealth of a firm to achieve organizational set objectives on routine basis. Controlling function is the art of tele-guarding the activities of the organization to consistently fall in line with set objectives. Management accounting achieves this function through effective budgeting.

According to the Chartered Institute of Management Accountants (CIMA), Management Accounting is "the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan, evaluate and control within an entity and to assure appropriate use of and accountability for its resources. Management accounting also comprises the preparation of financial reports for non management groups such as shareholders, cr->ors, regulatory agencies and tax authorities" (CIMA Official Terminology)