Role Of Managerial And Managerial Accounting

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The role of managerial accounting has played a significant role in the success of businesses dating as far back as the 19th century. Service and production operations during the days of the industrial revolution were not nearly as sophisticated then as they are today. The current initial purpose of managerial accounting is comparable to its purpose throughout history. Managerial accounting has historically been useful in assisting managers with the information they need to make important decisions about their business’ processes and operations (Fleischman 2006). Managerial accounting is still true to its sole purpose, however; myriad changes in growth of the economy, technological advances, legal changes and the overall growth of the…show more content…
In contrast, other areas in accounting particularly financial and tax accounting focus on external reporting. Financial accounting is used to provide stakeholders with a representation of the organization’s financial health. Tax accounting focuses on organizations’ financial legal compliance. Financial and tax accounting present information about a period of time in the past. A business’ stakeholders are concerned with public accounting information and are not necessarily concerned with the daily business functions (Francis 2014). The most significant difference is that managerial accounting is internally focused while other disciplines focus on the external financial reporting. According to recent publications issued by the Institute of Managerial accounting, the role of managerial accounting has shifted simultaneously with the shift of business leaders toward strategic management. “Management accountants (1) provide the conceptual framework for converting data into information and (2) fulfill the role of enabler and strategic business partner (IMA 2008).” Technological advances have made it possible to record and share more information. These advancements have given managerial accountants more information to work with than in the past which has helped to restructure the role of management accountants. Managers have turned to managerial accountants for more than a
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