Management Accounting: Techniques, Systems, and Reporting

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
(a) Different between Management accounting and Financial Accounting................................1
(b) Cost accounting system.........................................................................................................2
(c) Inventory management systems.............................................................................................2
(d) Job costing systems...............................................................................................................3
(e) Benefits of management accounting systems........................................................................3
(a) Different types of marginal accounting reports.....................................................................3
(b) Explain why information presented should be accurate, relevant to the use, reliable up to
date and timely............................................................................................................................4
(c) Evaluate that how management accounting systems and management accounting reporting
should be integrated organisation operational process................................................................4
TASK 2............................................................................................................................................5
Calculate costs using appropriate techniques of cost analysis to prepare an income statement
using marginal and absorption costs...........................................................................................5
TASK 3............................................................................................................................................6
Advantages and disadvantages of different types of planning tools used for budgetary control6
TASK 4............................................................................................................................................9
Compare how organisations are adapting management accounting systems to respond
financial problems.......................................................................................................................9
CONCLUSION ...............................................................................................................................9
REFERENCES................................................................................................................................9

INTRODUCTION
Management accounting is a tool and technique that is utilised by the administrators in
most of the business firms with the motive of analysing the capability of the organisation to
accomplish its predefined aims. To perform in all the business activities and operation in
efficacious manner, it is crucial for all the entities to organise it every year so that intrinsic
information can be collected to take effective decisions for future (Abernethy and Wallis, 2018).
This assignment is based on KPMG which is a leading accountancy company across the world
and offering its services to its diverse customers like Excite Entertainment Ltd. It is operating its
business activities and operations in entertainment and leisure sector. This written document will
include information about management accounting system, reporting methods, framing of
income statement by using marginal absorption techniques. Further, will discuss role of financial
governance and benchmarking in management accounting is correlated to respond financial
problems in efficacious manner.
TASK 1
Section A
(a) Different between Management accounting and Financial Accounting
Basis Management accounting Financial accounting
Meaning It is an activity and technique
of managing, organising and
controlling the financial
information of a company and
provide it to the administrators
to devise policies, plans and
strategies for effective running
of the business.
It is an accounting system
which mainly concentrates on
formulating financial
statements of the company to
offer information to the
interested parties (Alawattage,
Wickramasinghe and Uddin,
2017).
Information The information which is
provided by this technique is in
term of monetary and non-
monetary.
It provide only monetary
information of the company.
enefits1

Objective The major purpose of it to help
the management in planning
and determination devising
activity in term of offering
brief information about several
matters.
The main objective of it is to
offer financial data to outsiders
(Falla and Opstad,2014).
Time frame These reports are defined as
per the requirement of the
company.
Financial statements are
designed in the end of the
accounting period.
(b) Cost accounting system
It can be explained as a system which is basically used by the enterprises for monitoring
the actual cost which is faced by them during the time of performing organisational actions and
operations. In Excite Entertainment Ltd., administrators of the company can use it to identify the
reasons of all the expenditures which are occurred cause of business activities.
Direct costs- In it, all the expenditures are instantly affiliated with the business operations
and known as the part of these kind of costs. These kind of expenses faced by the managers of
the respective company in term of promoting concerts, festivals across UK.
Standard costing- This technique can be used by Excite Entertainment Ltd. Yo collect
data towards those components which are providing outcome in variation among standard and
actual cost.
(c) Inventory management systems
This system is used by the companies to administrate all the products which are utilised
subject to organise operations efficaciously. In Excite Entertainment Ltd., it can be apply by the
administrators to keep record of all the inventories in which is being utilised by workforce to
offer leisure to the consumers.
LIFO- In it, the firms concentrates on those inventories which are purchased in last and
used first in the manufacturing activity (Feng and Ho, 2016). In respective company, this
technique can be use for efficient stored of the inventories.
enefits2