Management Accounting: Principles, Role, Techniques, and Planning Tools

Management accounting

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
MAIN BODY..................................................................................................................................3
Principle of management accounting...........................................................................................3
Role of management accounting and system...............................................................................4
Utilization of techniques and methods of management accounting systems..............................5
Presenting ways management accounting is integrated within the organisation.........................7
Explaining benefits of the function to organization....................................................................8
Conclusion reflects application of management accounting......................................................8
PART 2............................................................................................................................................9
Comparing and contrasting three planning tools used in management accounting.....................9
Comparing about the adaption and application of the management accounting and evaluating
its effectiveness in dealing the financial problems....................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES................................................................................................................................1

INTRODUCTION
Management accounting is mainly defined as the practice which helps in identifying,
measuring and interpreting the financial data of a business which helps in attaining the set
organizational gaols. This function mainly helps in providing the details of the company and
helps in taking the timely decision for attaining the long term growth in the business. It plays key
role in preparing the reports and results in taking the long term and short term decision in the
company for attaining the goals by recording the financial transactions of a particular business.
This report manly provide details about the medium size manufacturing company with
explaining the principles of the management accounting. Also, defining the role of management
accounting and it systems. Future using variety techniques and methods which helps in defining
and presenting the calculations for an income statements using costing. Also, evaluating the
management accounting and its integration within the business and the benefits of using this
functions. Further, comparing and contrasting three planning tools used in management
accounting with defining its advantages and disadvantages. Also, adopting the management
accounting for dealing with all the financial problems.
PART 1
MAIN BODY
Principle of management accounting
Designing and compiling: Accounting information, records, reports and other evidence of
present, past and future should meet the needs of the particular business Along with this, it
should be designed in such a way that it represents the relevant data so that particular problem
can be solved. The information should meet the essentials of management (Santoro and et.al.,
2018).
Management by exception: This principle is followed when presenting the data related to
management and it means that budget control and standard costing methods are followed by the
company.
Control at sources Accounting: In this principle a qualitative and quantitative report is
formed in which work details like cost, machinery, repair and maintenance is recorded. Which
helps in controlling the extra cost.
Influence: Communication present crucial data and it present the start and end of the
management accounting and it strengthen the process of decision making(Reyes-Menendez and

et.al., 2020). Moreover, sound communication is important to maintain the smooth flow of data
within the company and authority can take decision in order to deal with harmful situation.
Relevance: Information is valuable for the company so management accounting should check
the best available resource so that it can take and implement decision for solving the issues.
Moreover, accounts should be related with past, present and future information, external and
internal data as well as financial and non-financial details.
Value: It has been estimated as management accounting links with company details and core
enterprise model that provide intensive knowledge regarding the macro economic and market
situation. Along with this, it deals with evaluating information along with identifying
opportunities and risks. Situational analysis helps company in reviewing their risk and
opportunity available in the market area.
Role of management accounting and system
There is various role of management accounting that are discussed in details below:
Planning long and short term:
It plays important role in identifying the future business and economic events so that company
can make long and short term aims related to strategies, accounting and market study. However,
when company have details regarding their financial and non-financial recorded it can easily
develop tactics to grab the opportunity or solve problems.
Developing management information system: The routine report is given to managerial
personal at all levels so that it can take corrective actions at the right time. Along with this,
management accountant helps in making the important decisions.
Maintaining optimum capital structure: It play major role in raising the funds and their
application. The accounts manager has to maintain the mix of equity and debts so that it can gain
tax benefits Moreover, it is risk because interest on debt has to be paid even if company is
running into loss (Raut and et.al., 2019). Thus, management account maintains the capital
structure and give due consideration to capital theories and trading equity.
Participation in management process:
The management accountant is occupied with the position of the company as manager has to
performs staff functions and give author to other members. It has to teach their executives to
control information and shift the important data as well report the clear information to external
parties.