Application Of Management Accounting Theories

1541 Words Dec 4th, 2016 7 Pages
Executive Summary Management accounting is one important area which is widely used in many industries and areas. The application of management accounting theories, methods, tools and principles could influence one company’s decision making process, evaluation process, performance estimation and investment management. This report will emphasize two important areas which are investment appraisal and variance analysis which are used to make the decision and estimation. For investment appraisal methods, the internal variables and external variables will have the specific influenced on the capital investment appraisal methods, especially the CIAM methods. However, the investment appraisal process has faced difficulties when the company needs to examine the investment related with the IS services and IT system. The application of variance analysis in the companies and agencies and the connection between risks and incentives. The using of variance analysis could provide some extra information post-contract and pre-decision. The old assumptions used in the variance analysis are not available again today because they have test the previous model and find the new evidences to reduce the errors in the calculation and improve the model. There are many limitations connected with both the variance analysis and investment appraisal. With the development of the accounting research and innovation in the business, it is certain that in the future, more and more new methods, models and…
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