Management Accounting
Meaning
· Management Accounting assists the managerial functions at all the levels by providing managers with the required
information so as to enable them to run the business efficiently, in policy
creation, controlling and decision making.
· It begins from where the role of Financial
Accounting ends.
· Management accounting is concerned with data, which is collected
from both internal and external source.
Characteristics
· Future oriented, increase in efficiency, cause and effect
relationship, flexible, provides information and not decisions,
tools and techniques, uses accounting information.
Scope
· Financial
accounting, Cost accounting, Cost control and procedures, statistic tools,
reporting to management, tax planning, budgeting and forecasting, internal audit, office services.
Functions
· Planning: Data and information provided by management accounting helps managers to forecast and prepare all
kinds of plans and strategies.
·
Controlling: Through techniques like standard costing,
budgetary control, etc.
· Coordinating, Qualitative information, Financial analysis
and interpretations,
Communication, Decision making, Tax policies.
Limitations
· Based on historical data, depends on the level of knowledge
of management accountant,
relatively newer concept, costly, complex.
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