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Advanced Management Accounting Doc

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Added on  2020-11-23

Advanced Management Accounting Doc

   Added on 2020-11-23

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MANAGEMENT ACCOUNTSINTRODUCTIONManagement accounting is that branch of accounts which will enable the financial data and advice tocompany about use of organisational and development of its business. This branch of accounts enables business to develop and sustain within the market for longer duration of time with its effectiveness and efficiency. This report will cover different types of requirements of types of systems used by management accounting and then it will describethe different methods used within management accounting reporting.LO 1P1 Management accounting and its essential requirements of different type of systemsManagement accounting is that type of managerial accounting which provides information based on better data base that will matter within organisation and aiding with the management and performance of control functions. This is also sometime called to as cost accounting whichis regarded to as process of identifying, measuring, analysing, interpreting and communicating information to managers for pursuit of goal of company. This will be containing both financial and non-financial information that would be used by managers ofcompany so that they could make provisions of decision making inform. The management accounts will be professional that involves partnering within the decision making and planning of systems. The scope of management accounts is very wider which includes strategic, performance and risk management which are the three most important aspects of accounts. Strategic management includes advancing within the role played of management accountant as strategic partner. Performance management is that practice which helps in maximising the performance and strength of company with making decisions. Risk management towards the end is that contributing part which will help in managing whole risk, failure and loss that could occur and it’s reporting as wellThe most important management accounting information will be that of extracting external and internal information which is from various sources. Thus all information will be used for regarding pricing, strategies, cost reduction and planning as well. But there are certain essential requirement that managers need to consider at time of various types of management accounting systems that company is using.Organisational structure- This is the most important part which will defines role and responsibility for each of the employee working within company. This will also let the manager know what type of information could be needed for book keeping and accountancy purpose. There are 2 types of organisational structure which company could have like that of:Flat structure- Under this structure all providing with wider range of reporting within information that is based on critical decision.Functional structure- This is that type of structure which will include the type of information used for manager himself.Management style- This is the way in which management will be following accountingsystems to be essential to be followed by certain types which is defined to as typeof functional process to yielding results.Information- This is that type of information or data which is used by company in way of applying management accounting that is most important essential decision making. There are many type of characteristics which must be used within this information includes like that of sources, relevancy, reliability, accuracy and whattype of information is.LO 2 P2 Different methods used for management accounting reportingManagement accounting will be including various types of reporting system as well which very important task of company is as this will allow them to give reportsto its managers and top level management as well. Reporting system is that type which will be required for taxation, managerial reporting and collection ofinformation in form of both financial and non-financial. There are various typesof reporting system that are used by company helping them all in report correct type of information to be delivered to all stakeholders of firm.Financial reports- This is the type of financial information related to company like that of book of accounts and balance sheet. This help company to summarise the overall profits and loss to firm with including amount of money to be invested and amount to be expensed on company.Pro forma cash flow- As per this type of information include the amount of funds that firm will be spending on short and medium term accounting period and the amount which is expected to be spend. Under this monthly summary will be created so that managers are allowed to know how much funds they are having and how much they need to spend as well.Sales report- This report have the details if useful information on number of sales that company need to do to earn revenue from the said or expected one. The numberof sale company is expected to make in particular year or term will be defining business activities and its promotional strategies that company is following.Item cost report- This will cover each department that is making most number of profits and sales during the year or period. This will have the spending of amount on each department including materials, labour and other expenses which need to be done. Then the expense from each category will be subtracted from sales which they are doing so as to gain profitability of each department.REFERNCESKaplan, R.S. and Atkinson, A.A., 2015.Advanced management accounting. PHI Learning.Langfield-Smith, K., Hilton, R. and Thorne, H., 2017.Management accounting: Information for creating and managing value. McGraw-Hill Education Australia.Otley, D., 2016. The contingency theory of management accounting and control: 1980–2014.Management accounting research,31, pp.45-62.
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