Relevance of Management Accounting in GSQ Ltd

Management Accounting

Executive summary
This report presents the relevance of management accounting in an organization name
GSQ ltd. It throws light on its benefits, role and function in an organization. Different tools and
techniques that can be used by the organization in achieving its objectives and overall decision
making process.

INTRODUCTION
Management accounting refers to identifying, measuring, analysing and interpreting the
information that assists manager in decision making process of an organisation. It involves
timely preparing financial information and providing it to managers so that managerial decisions
can be taken. In this report, GSQ Ltd is taken as an organization. The present report will develop
understanding about management systems and tools that facilitate effectual reporting as well as
planning. Report will also shed light on the techniques that can be undertaken by business unit
for responding monetary problems.
LO1
Introduction to management accounting (MA) system
According to the Institute of Cost Accountant, London, management refers to the set of
professional skills and knowledge needed for the preparation of reports. Managerial accounting
reports provide higher management team with an input for the formulation of policies, strategic
development and controlling purpose (Jiambalvo, 2019).
Different types of management accounting system and its benefits
Management accounting system is a system deployed to furnish relevant information to
the management to take a better decision. Different types of MA system and their requirements
with regards to business unit are enumerated below:
Cost accounting system: It refers to a system that employed by business organization for
making estimation about the cost of product pertaining to fulfil objective regarding cost control,
profitability analysis etc. It is essential for GSQ Ltd to implement this system as it helps in
assigning cost to different objects and proper allocation of resources (Marota and et.al, 2017). Its
key benefits are- it helps in fixing the price of the product based on cost, helps in reducing the
cost using cost control measures, helps in analysing the reason for loss etc.
Inventory management system: This system allows users to track its inventory from the
order placement to production of final product and delivery of the same to the end consumer
(Kulanda and et.al, 20190. The reason why GSQ Ltd should implement is that it is more
accurate, money saving and everything is automated which saves lot of time of the organization.
Its benefits are- It helps in minimizing the inventory cost, automation of manual tasks, helps in
achieving productivity etc.