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Management Accounting Systems - Alfa consultancy

   

Added on  2021-02-20

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ManagementAccounting Systems& Techniques
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Table of ContentsINTRODUCTION...........................................................................................................................4TASK 1............................................................................................................................................4Management Accounting and its systems:...................................................................................4Management Accounting Reports:..............................................................................................7TASK 2............................................................................................................................................8Costing Techniques to prepare income statements:.....................................................................8TASK 3..........................................................................................................................................16Advantages and disadvantages of different types of planning tools used for budgetary control:....................................................................................................................................................16TASK 4..........................................................................................................................................19Comparison of business entities applying management accounting systems for respondingdifferent financial problems:.....................................................................................................19CONCLUSION..............................................................................................................................20REFERENCES..............................................................................................................................22
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INTRODUCTIONIn current business environment, every business entities want to establish a structure todevelop a source of information for managerial decision-making. Management accounting isonly a way that provides a systematic way to create structure within business entity, because itcontains functions and task directly related to providing information for taking vital decisions(Bagautdinova, Kundakchyan and Malakhov, 2013). In this context a consultancy firm namedAlfa consultancy company. Report contains an exhaustive definition along with different aspectslike role, origin etc. of management accounting, clear distinction between financial accountingand management accounting and, presentation of financial information under managementaccounting reporting and systems in context of client company ITW Construction Products. It isUK's manufacturing company engaged in manufacturing of fixing, fastening and drilling systemsfor wood, steel and concrete applications. This report also includes pricing strategies, PESTanalysis, SWOT analysis and other different kind of reports of management accounting.TASK 1Management Accounting and its systems:Management Accounting: Management accounting is the process in which the financialinformation is utilised by the management in systematic manner in order to achieve financial aswell as operational goals (Collis and Hussey, 2017). Management Accounting comprises of alltechnical aspects of financial accounting and cost accounting which assists management withconstructive data set which helps the ITW Construction Product's management in formulatingfinancial and operational policies which further provides the management with a strong set ofparameters to build robust decision-making systems. Under the aegis of management accounting,accounting information is utilised judiciously by the management to improve the continuousfinancial health of the organisation and devising further measures to minimise losses. Management Accounting System: Management accounting systems refers to systematised useof accounting information to achieve targeted goals in harmony with the organisational policies.There are various management accounting systems which works in unison to integrate theoverall managerial processes which attributes to the substantial framework of policy making likecost accounting, inventory management etc.Significance of integration of systems within business organisation:
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Efficiency and effectiveness in organisational functions is main aim of ITW ConstructionProducts, so managerial person always tries to integrate systems like inventory management, costaccounting, price optimisation etc. with numerous activities of company. Such systems act as aframework for business enterprise to run their business tasks smoothly (Demski, 2013). Forexample company has integrated inventory management system with inventory process whichassist them in optimising expenses of inventory handling, warehouse expenses, storage expensesetc.Role, Origin and principle of management accounting:There are no common view about management accounting's origin. The termManagement Accounting is initially used in approx 1959s. It is also considered as costaccounting but afterwards management accounting becomes a filed of accounting (ManagementAccounting. 2019). In business context it play role in safeguarding of financial resources ofbusiness enterprise. It assist managers in quick and effective accomplishment of task of decision-making. Following are some significant management accounting principles:Influence:Management accounting require to generateinformations that can persuasion potentialdecisions. Relevance:Information must be consistent and applicableor usable for different users. Values:Functions of management accountingrequired to be combine an analysis whichexhibits effect on values determined bybusiness organisation (Thomas, 2016).Trust:Information generated from reporting of resultof management accounting system require tobe reliable and with a motive to develop trustin individual. Differences: Financial Accounting v/s Management Accounting:Management AccountingFinancial Accounting Main objective of adopting of managementaccounting is to circulate compatibleinformation for managerial and businessdecisions. Financial Accounting is adopted by entities tocommunicate performance of company tovarious interested parties and stakeholders.No legal or statutory requirement for adoption. In almost all countries financial accounting is
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