Management Accounting: Role, Functions, and Tools for Financial Problem Solving

UNIT 5 MANAGEMENT
ACCOUNTING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Explaining role, functions and principles of management accounting and importance to
integrate its system within company...........................................................................................1
Explaining different management accounting reports................................................................3
Explaining advantages and disadvantage of budgetary tools......................................................4
Explaining & comparing how organizations are adopting management system to respond
financial problem........................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Management accounting is concerned with having process of having financial information and
resources information so that strategic decision can be made. It allows analyzing, interpret and
control the information in turn greater insights to have proper functioning. The current report is
based on Eastern Engineering Co. Ltd which is medium-sized organization operating in the
manufacturing industry. Present report will highlight role & functions, principles of management
accounting and its significance in integrating its system within company. It will provide insights
related to different methods of management accounting reports and advantages & disadvantage
of budgetary tools. The current study will highlight how organization is responding to financial
problems.
MAIN BODY
Explaining role, functions and principles of management accounting and importance to integrate
its system within company
Management Accounting (MA) is associated with maintaining proper insights from
collecting, analyzing, gathering and interpreting both financial & non monetary data in turn
strategic decision can be taken. The main role of MA comprises recording, selecting, managing
company's practice, risk management h, budgeting, planning, strategic and decision-making. It
helps fir to get the reliable information to decline cost, analyzing pricing strategy so that risk can
be reduced to have optimum utilization of resources (Abdusalomova, 2019). Easter Engineering
Co. Ltd as being manufacturing company requiring paying attention on having relevant &
reliable insights so that continuous improvement can be derived.
The principles of management accounting is focusing on influencing, relevance, analyze
and trust. These principles are having ability to communicating insights that is able to influence,
information is relevant, stewardship build trust, impact on value is analyzed (TRUHACHEV,
KOSTYUKOV and BOBRISHEV, 2017). It aids in designing, compiling, managing expansion,
controlling sources, utilizing resources, etc are the crucial functions of management accounting.
Management Accounting System (MAS) is the process of using different techniques in turn
higher ability to decline cost, increase profitability, etc can be obtained. It comprises job costing,
cost accounting, price optimization and inventory management system. Each system plays
crucial role in affecting the business processes in positive manner.
Job costing system
1