The Cost Management Information System Essay

1229 WordsFeb 1, 20165 Pages
Chapter 1 Discussion Questions 1) As stated in the book, the cost management information system is one of two major accounting information systems within an organization. This subsystem’s burden is to generate outputs for internal users using processes needed to satisfy management objectives. Instead of being obliged by an external source’s criteria, it is ruled by people within the company. It differs from management accounting in that management accounting is more focused on how financial and nonfinancial information should be used for overall improvement and decision-making. It differs from cost accounting in that cost accounting measures and assigns costs in accordance with an external source, Generally Accepted Accounting Principles (GAAP). 2) Financial accounting is concerned with generating outputs for external users. Cost management is concerned with generating outputs for internal users. Also financial accounting is regulated and governed under Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB). In cost management, this third party does not exist. 3) As mentioned in the book, factors that are affecting the focus and practice of cost management are global competition, the growth of the service industry, customer orientation, new product development, time as a competitive element, and efficiency. All these factors have drastically changed the way in which industries operate. With competitive advantage being a factor, companies
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