Advanced Management Accounting Doc

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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 ofaccounts enables business to develop and sustain within the market for longer duration oftime with its effectiveness and efficiency. This report will cover different types ofrequirements 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 onbetter data base that will matter within organisation and aiding with the management andperformance of control functions. This is also sometime called to as cost accounting whichis regarded to as process of identifying, measuring, analysing, interpreting andcommunicating information to managers for pursuit of goal of company. This will becontaining both financial and non-financial information that would be used by managers ofcompany so that they could make provisions of decision making inform. The managementaccounts will be professional that involves partnering within the decision making andplanning of systems.The scope of management accounts is very wider which includes strategic, performance and riskmanagement which are the three most important aspects of accounts. Strategicmanagement includes advancing within the role played of management accountant asstrategic partner. Performance management is that practice which helps in maximising theperformance and strength of company with making decisions. Risk management towardsthe end is that contributing part which will help in managing whole risk, failure and lossthat could occur and it’s reporting as wellThe most important management accounting information will be that of extracting external andinternal information which is from various sources. Thus all information will be used forregarding pricing, strategies, cost reduction and planning as well. But there are certainessential requirement that managers need to consider at time of various types ofmanagement accounting systems that company is using.Organisational structure- This is the most important part which will defines role and responsibilityfor each of the employee working within company. This will also let the manager knowwhat 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 informationthat is based on critical decision.Functional structure-This is that type of structure which will include the type of information usedfor 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 wayof applying management accounting that is most important essential decisionmaking. There are many type of characteristics which must be used within thisinformation includes like that of sources, relevancy, reliability, accuracy and whattype of information is.LO 2P2 Different methods used for management accounting reportingManagement accounting will be including various types of reporting system as wellwhich 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 thattype 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 correcttype of information to be delivered to all stakeholders of firm.Financial reports- This is the type of financial information related to company like thatof book of accounts and balance sheet. This help company to summarise theoverall profits and loss to firm with including amount of money to be investedand amount to be expensed on company.Pro forma cash flow- As per this type of information include the amount of funds thatfirm will be spending on short and medium term accounting period and theamount which is expected to be spend. Under this monthly summary will becreated so that managers are allowed to know how much funds they are havingand how much they need to spend as well.Sales report- This report have the details if useful information on number of sales thatcompany 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 definingbusiness activities and its promotional strategies that company is following.Item cost report- This will cover each department that is making most number of profitsand sales during the year or period. This will have the spending of amount oneach department including materials, labour and other expenses which need tobe done. Then the expense from each category will be subtracted from saleswhich 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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