Importance of Management Accounting in Budgetary Control : Report
Added on -2020-07-23
| 16 pages| 5408 words| 59 views
Trusted by 2+ million users,
1000+ happy students everyday
Showing pages 1 to 4 of 16 pages
Management Accounting
Table of ContentsREPORT..........................................................................................................................................2FROM: MANAGEMENT ACCOUTNING OFFICER..................................................................2TO: GENERAL MANAGER..........................................................................................................2INTRODUCTION...........................................................................................................................2TASK 1............................................................................................................................................2P1 Management accounting and different types of management accounting systems..........2P2 Explain different methods used for management accounting reporting...........................4TASK 2............................................................................................................................................6P3 Techniques of cost analysis to prepare an income statement using marginal and absorptioncosts........................................................................................................................................6TASK 3............................................................................................................................................8P4 Advantages and disadvantages of different type of planning tools used in budgetary control................................................................................................................................................8TASK 4..........................................................................................................................................10P5 How organisations are adapting management accounting systems to respond to financialproblems...............................................................................................................................10CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................121
REPORTFROM: MANAGEMENT ACCOUTNING OFFICERTO: GENERAL MANAGERINTRODUCTIONManagement accounting is considered as managerial accounting which used atmanagement level of any organisation (Otley and Emmanuel, 2013). It is a system which help inmanaging operational departments, administration department and functional departments. It is asystematic format of keeping records of performance of employees and departments. This is oneof the technical management system which used in decision making process and strategicplanning. Scope of management accounting is found at various management level as strategicmanagement, performance management and risk management. This report present theimportance of management accounting in budgetary control (Tucker and Lowe, 2014). Differenttypes of management accounting system are explained subject to decision making and budgetarycontrol process in organisation. Cost accounting systems as marginal costing, absorption costingand cost volume profit analysis are the methods which are used in general managementaccounting system. There is a company named as Equilibrium Assets management which is small scaleorganisation in UK. Company is engaging in providing wealth management serves, financialplanning, investment management in terms of new assets under management regions.Management accounting concepts and methods are explained in above mentioned organisation. TASK 1P1 Management accounting and different types of management accounting systemsManagement accountingManagement accounting is one of the aspect which is becoming more essential andimportant in terms of effective management and operations. This is the accounting system whichhelps to correlate the data and information provided by the various departments of theorganisation. These information remain essential for managers, senior level authorities andhigher level management. With the help of summarised information managers become eligible tomake impressive strategies and plans for sustainable growth of the organisation.2
As per definition provided by Institute of Management Accounts (IMA), “ managementaccounting is considered as a profession which utilized in partnering in management decisionmaking, performance management system and financial reporting. This is the managementsystem which support in various management process and departments (Parker, 2012). Role ofmanagement accounting become more vital and important in making budgets and controlling thecost. It is an analysis of future events, which are prepared according to requirement of business.Cost accounting also a part of management accounting system. This process is operated totranslate and estimate the further cost to be implemented in manufacture, production andoperational departments. This is the process used to support and guide decision making process.Scope of management account is found in various fields:Strategic management – Plans, strategies, decisions are taken in this managementprocess. By using the methods and technologies of management accounting best options andstrategies are find out.Performance management – Efficient and skilled employees are the base of anyorganisation (Qian, Burritt and Monroe, 2011). It is important to achieve fluency and accuracy inmanufacturing and production process. Management accounting help in getting the informationsand data from all departments of organisation and help in analysing the performance oforganisation.Risk management – This management approach is considered as beneficial in respect ofanalysing the estimated risk and events, which remain responsible to attain aims and objectivesof organisation.Different types of management accounting systemsAccording to present scenario accounting and management scope has become vast anddynamics in organisational context. Different types and nature of organisations are found inbusiness environment. Accounting and management systems have been designed as per the typeand nature of organisation. Organisation's management department have multiple options ofaccounting and management system as per nature and structure of business. Below are differenttype of management accounting systems are explained :Finance management – Financial reporting and finance management are the two majortasks for management department of organisation (Shah, Malik and Malik, 2011). Financialreporting help in analysing the market position and capital share of company. Financial3
Found this document preview useful?
You are reading a preview
Upload your documents to download
or
Become a Desklib member to get accesss
Paid Plans
Free Plan
Single Unlock
Monthly Plan
Yearly Plan