Management Accounting: Principles, Systems, Reports, and Functions

ACCOUNTING
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
PART 1............................................................................................................................................3
Explaining the principles of management accounting ...............................................................3
Explaining role of management accounting and its system ......................................................4
Describing different types of Management accounting report....................................................6
Presenting calculation of cost analysis technique........................................................................6
Explaining the management accounting integration within organization...................................9
Describing management accounting functions.........................................................................10
PART 2.........................................................................................................................................10
Explaining three planning tools along with its advantages and disadvantages........................10
Describing the ways in which firm can deal with financial problems......................................13
CONCLUSION..............................................................................................................................14
Recommendation......................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Management accounting is concerned with the summarizing, analysing and
communicating & interpreting the financial information in effective manner. In the current era,
management accounting play important role in gaining competitiveness by gaining crucial
financial information for decision making. The current report is based on the Associated British
Food which operates in manufacturing organization and focuses on food processing & retailing.
Present report is based on providing information regarding principles & role of management
accounting, Management accounting systems and reports will be included in present report. The
practical example regarding cost analysing technique will be involved in eh current case study.
Integration of management accounting with organization and benefits of functions will be
emphasized in present report. It will give emphasis on three planning tools and its advantages
& disadvantages, ways to deal with financial problems and recommendations to gets sustainable
processing will be included.
MAIN BODY
PART 1
Explaining the principles of management accounting
Management accounting is concerned with measuring and interpreting crucial financial
information for taking strategic decision. Management accounting comprises few principles
which play crucial role in ensuring accuracy and smooth functioning of organisation. These
focuses on designing & compiling, use of return on investment, integration,utilization of
resources, etc.
 Influence is associated with communication which reflects insights about strengths so
that decision making procedure can be exerted effectively (Mahmoudian and et.al.,
2021). Sound communication and critical information makes integrated procedure.
 Relevance is one of the crucial management accounting principle that gives valuable
information that gives ability to the organization to be in position to have strategic
decision. It is associated with providing data regarding past, present, future events by
including all external & internal through focusing on all financial and non monetary
data set.

 Management accounting links organizational procedure with its core model and makes
possible to accomplish the larger number of opportunities so that higher value principle
can be implemented.
 Credibility principle helps in making the decision procedure that a permits entity to
develop the significant proceeding of ideals, governance and interpersonal commitment.
It provides assistance in deriving proper trustworthiness and credibility so that
stakeholders can be attracted. These are are principles of management accounting.
Explaining role of management accounting and its system
Management Accounting (MA) play crucial role in providing crucial information to
organization so that proper decision can be formulated. There are ways in which MA can can
contribute significantly in achieving objectives of Associated British Foods (ABF). There are
various reasons for which organization can execute MA into operational practices as it allows to
develop short as well long term planning, deriving crucial information for decision making,
allocating and optimization of resources, etc. Management accounting contribute in controlling
the irrelevant aspects via identifying and eliminating them so that proper efficiency of
manufacturing procedure can be derived (Weetman, 2019). In current era, MA plays significant
role in sharing relevant data so that strategic decision can be made. Financial accounting is
used to track operation so that knowledge regrading financial health can be obtained whereas in
MA both monetary and non money factor are included.
Management accounting system can be sued by Associated British food to ensure that
all crucial aspects are involved into decision making procedure. There are four types of of
management accounting system which involves job costing, inventory management, cost
accounting and price optimization.
Different types of Management Accounting Systems (MAS)
Inventory Management System (IMS) helps in assuring that all inputs, work in process
and finished goods are managed and control effectively. Associated British food (ABF) can sue
this system of management accounting to ensure that it can meet market forces such as demand
and supply. This system contributes in ensuring that manufacturing procedure is conducted
effectively so that customers demand can be met.
Job Costing System (JCS) is useful in assessing the cost associated with each task so
that its share in achieving success can be identified (Allain, Lemaire and Lux, 2021). It is