management accounting


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Related to management accounting: cost accounting, Financial accounting

Cost Accounting

A branch of accounting that observes and calculates the actual costs of a company's operations. Internal managers, rather than auditors, use cost accounting most of the time to identify aspects of their company where costs can be cut. For example, a manager may enlist a cost accountant to determine the most expensive aspects of his/her business that is, where the money goes. The accountant may make a detailed report so that the manager may make decisions based upon it. Because cost accounting is primarily internal, it need not conform to the Generally Accepted Accounting Principles. It is also called managerial or management accounting. See also: Assurance, Activity-based costing.
Management accountingclick for a larger image
Fig. 53 Management accounting. Trading results: Y Company Plc for year ending 20xx.

management accounting

any accounting activities geared to the preparation of information for managers to help them plan and control a company's operations. Management accounts generally provide more detailed information than financial accounts; for example, breaking down revenues and costs between different products, factories or departments to provide comparative data and to help reveal profitable and unprofitable activities. Management accounts also tend to provide information about performance more frequently than financial accounts, with monthly or even weekly management accounts rather than annual financial accounts, to give managers prompt feedback and to enable them to act quickly to check inefficiencies. Management accounts are geared to estimates of future costs and revenues rather than simply reporting past revenues and costs as financial accounts do, thereby ‘providing valuable management information for preparing accurate estimates and tenders and for use in negotiating price changes.

Fig. 53 shows how more detailed analysis of revenues and costs can provide more useful information than total information as reported in the PROFIT-AND-LOSS ACCOUNT. Compare FINANCIAL ACCOUNTING. See also BUDGETING.

management accounting

any accounting activities geared to the preparation of information for managers to help them plan and control a company's operations. Management accounts generally provide more detailed information than financial accounts, for example, breaking down revenues and costs between different products, or factories or departments to provide comparative data and to help reveal profitable and unprofitable activities. Management accounts also tend to provide information about performance more frequently than financial accounts, with monthly or even weekly management accounts rather than annual accounts, to give managers prompt feedback and to enable them to act quickly to check inefficiencies. Compare FINANCIAL ACCOUNTING.
References in periodicals archive ?
The challenges that are available on this career path are reflected in IMA's definition of management accounting as "a profession that involves partnering in management decision making, devising planning and performance management systems, and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization's strategy.
As noted with management accounting careers, the course requires the integration of all subdisciplines included in an undergraduate business program: finance, economics, marketing, business communications, information systems, and so forth.
Galding and Kravenze applied 8 sub-dimension in study the relationship between using strategic management accounting and competitive strategy which are based on Porter model (R & D, product quality, product technology, product scope, service quality, cost level, the advertisement costs rate and marker coverage and they found a noticeable relations between R & D and marker coverage expansion.
Advisable factors were identified as potential factors in designing effective strategic management accounting due to common structural-organizational theory which refers to paradigm of structure strategy operation of Anderson and Lanen [2].
Furthermore, grounded on the research on the mediation by Baron and Kenny (1986), we can see that the mediating role of adopting management accounting practices is important in the effect of corporate governance practices on organizational performance.
It is particularly important for multinational corporations, where the management accounting specialists are frequently required to service remote branches (Quattrone and Hopper, 2001).
For more than 20 years, Giddens' theory of structuration has been proposed as a useful means of conducting alternative management accounting research (see Baxter and Chua, 2003).
In analyzing how and whether to pursue a new management accounting designation, AICPA focused on how best to achieve three objectives: expanding recognition of the U.
If it is true that management accounting serves the above important function as highlighted in the definitions above, then the use of its tools by managers of firms in developing countries will go a long way to guaranteeing their corporate profitability.
The traditional management accounting techniques were still widely used and new cost management techniques (ABC at the time) were not a priority.
The gap between what industry needs and what management accounting education offers is widening.
A review of related literature on management accounting practices and research questions is discussed.

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