management accounting system

MANAGEMENT
ACCOUNTING SYSTEM

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Question 1........................................................................................................................................1
Explaining MA and the role of the management accountant in an enterprise ...........................1
Question 2........................................................................................................................................2
Management accounting scope and its role with respect to different business function............2
Question 3........................................................................................................................................3
Areas where financial accountant and management accountant overlap and their differences..3
Question 4........................................................................................................................................4
Cost reports and there types in MA and difference these type of cost reporting have with
evaluation of there advantages....................................................................................................4
Question 5........................................................................................................................................5
Income statement using marginal and absorption costing techniques........................................5
Question 6........................................................................................................................................6
The way Break even analysis works and its importance for the enterprise................................6
Question 7........................................................................................................................................7
Net profit calculation and explanations of its importance for the management accountant and
its use in driving organisational objectives.................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
APPENDIX....................................................................................................................................10

INTRODUCTION
Management accounting system usually mean the system that helps the business in
measuring and evaluating different management process of the organisation(Armitage, Webb
and Glynn, 2016). Report is based on the company Unilever and it is transnational business
having its headquarter at London, UK. Report will include Understanding of management
accounting systems and application of different management accounting techniques.
Question 1
Explaining MA and the role of the management accountant in an enterprise
MA defined as the practice of facilitating the financial information and the
resources to the managers in the process of making decision. It is used by an internal
management of the company where different activities within the business are analysed. The
main objective of MA is to use the statistical data and in taking accurate and better decision in
controlling an enterprise, development and the business activities. In other words, management
accounting is representation of the financial data and the business activities for internal
management of company(Ball, Grubnic and Birchall, 2014)
MA is the profession which includes partnering in the decision making of management,
devising performance systems of management on providing an expertise in the financial
reporting and controlling for enabling the management in framing and executing strategy of an
organization.
Role of management accountant
Managerial accountant analyses and records financial information through collection
interpretation and preparation of financial data for the company and management team of an
organisation. The MA data is used for forming practical decision that will the benefit the growth
of the firm. MA is required to be critical thinker and strong mathematical background so that it
can make correct calculation of the financial data. Accountant has to keep record of all the
transaction that are incurred by the company. They have to forecast about the future by making
appropriate budgets and estimated cash flows. They plays very critical role in the present times
as organisations take their decisions based on financial information that is prepared by the
organisation. The routine reports and the reports for the long run purposes are been forwarded to
the managerial personnel at different levels in order to take appropriate action at right time. He
also make use of such reports for the purpose of taking an important decisions in an effective
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manner. He plays an important role in raising and application of funds for making decisions
about maintaining leverage position. Therefore, management accountant seeks for maintaining
optimum level of capital structure and giving appropriate considerations to the several costs of
the capital theories, possibility of trading and leverage. He occupies the pivotal position within
an enterprise by performing all the staff functions and also contains a line authority over an
accountant & the other employees in their respective office. He facilitates significant information
to internal stakeholders for decision making in short period. He plays a critical role in framing
reports in relation to standard cost, variance analysis, cash flow assessment, budgets,
performance evaluation, liquidity management that in turn ensures proper controlling. His role is
to guide and educate executives in respect to need for controlling information & ways in using it.
He shifts the important information from the report in a clear format for the external
parties(Barbu and et. al., 2014).
Question 2
Management accounting scope and its role with respect to different business function
Management accounting is having a wider scope, as it contain important information
which is used by the accountants for financial analysis of the business. The scope for different
role of management accounting in Unilever is as following:- Financial accounting:- Without the efficient use of financial accounting, the management
accounting can not operate effectively as financial accounting provides the historical
information of the Unilever that is used by business managers for making decision that
can benefits the organisation.
 Cost accounting:- By using cost accounting, different techniques are used to determine
cost of manufacturing and financial data is been used in order to find the cost associated
with product and processes. It is generally considered as backbone of management
accounting as it provides different analytical that business can use in order to discharge
its respective responsibilities(Bromwich and Scapens, 2016).
 Financial management:- It is generally the planning and controlling of different financial
resources and it usually deals with raising funds and their effective utilization in
Unilever.
Management accounting is playing an important role for different function of business
and these roles are as following:-
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