Report on Management and Accounting Process of Small Scale Industry

Added on - 03 Jun 2020

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Management Accounting
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1. Management accounting and essential requirements of its different types..........................1P2 Methods used in management accounting reporting.............................................................3M1 Evaluation of benefits of management accoutring within the organisation.........................5D1 Integration of management accounting and management accounting reporting...................5TASK 2............................................................................................................................................5P3 Calculation of cost by using appropriate techniques.............................................................5M2 Range of management accounting techniques......................................................................8D2 Financial report with the interpretation of data.....................................................................8P4 Advantages and disadvantages of various type of planning tools.........................................8M3. Evaluation of planning tools..............................................................................................11D3. Critical analysis of financial problem................................................................................11TASK 3..........................................................................................................................................11P5 Comparison of management accounting system subject to implanting in organisation......11M4 management accounting as a leading factor.......................................................................12CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................14
INTRODUCTIONManagement accounting is one of the branches of accounting process used by managersand senior level management of company (Otley and Emmanuel, 2013). This is the managementsystem which contains principles, standards, rules and guidelines in respect of managingdivisions and departments of an organisation. This report is made around management andaccounting process subject to small scale industry. Aspen travel and hospitality industry is thechosen organisation in report to describe the meaning and scope of management accounting.Different types of management accounting systems, methods and principles are used inmanagement accounting process elaborated briefly. Cost accounting process and systems arediscussed for reducing cost of company by applying absorption and marginal costing.Advantages and disadvantages of various types of planning tools are used with respect tobudgetary control as well. There is a comparison made in respect of adapting managementaccounting system in organisation.TASK 1P1. Management accounting and essential requirements of its different typesManagement accountingThis is an accounting system used to provide information and data to managers andsenior authorises. Management accounting also considered as managerial account. Informationand data provided under this accounting system are useful for decision making process andstrategic planning. It is one of the practical approaches that is widely used in management andoperations (Papaspyropoulos and et. al., 2012). It works as a bridge to flow the information anddata in a systematic manner. Making plans, budgets, growth model and forecasting are the mainfields in which management accounting concept is used. To grab new growth opportunities andadopting new techniques for better operations are the main objectives of organisation. Variousdefinitions are given with respect to management accounting. According to Institute ofManagement Accountants (IMA), management accounting is a professional way to representaccounting and financial details to the managers. It includes partnering in management decisionmaking, developing plans, performance analysis and management, financial reporting as well assummarised report, implementation and formulation of organisation's strategy.1
As per the American Institute of Certified Public Accounts (AICPA), managementaccounting works in three major areas such as strategic management, performance managementand risk management. It helps the organisation as a supporter to manage the operations and playa role of a partner to make strategies and plans. It improves the process of decision making andenhance credibility of financial statements and financial reports. It assists accountants andmanagers to analyse the risk and forecasting of future opportunities. It is a way to produceinformation for financial decisions and decision oriented information to make policies andaccounting compliance structure of company.Person who manage all the accounting records are considered as value creators.Knowledge and experience of management accounting can be obtained by management oftreasury, efficient and accurate auditing process, marketing and valuation of assets, analysis ofrisk management, pricing and logistic and information system.Different type of management accounting systemsGovernmental accounting:accounting of legislations, legal rules and keeping legalrecords are the main key work fields managed under this accounting system. This accountingsystem also considered as federal accounting and public accounting system (Renz, 2016).Governmental accounting system was implemented to separate accounting for public and privatesector. Determine aims and objective of private and public sector was the main reason tointroduce governmental accounting system in organisational context. This accounting tool isbeneficial to ascertain public and private organisation's financial position and performance andbifurcate the rules and regulation are theFinancial accounting:Finance is a major requirement of any type and nature ofbusiness. Finance is one of the sources which helps to execute the functions and operations insmooth way. This is another branch of accounting helps to manage the requirement of finance inorganisation. Find out best option to generate finance and proper allocation and utilisationexamined in this accounting system. Financial statements, financial reports are made under thisaccounting system to analyse the financial strength of company.Tax accounting:payment of tax and calculate the amount of tax liability is one of themajor field of accounting system. Rules, standards, provisions and regulations are made inrespect of tax accounting. In large organisation there is a specific branch of accounting found inwhich team of accountants works as charted accountants, company secretary and cost2
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