Importance of Management Accounting and Management Accounting System

This presentation emphasizes the importance of management accounting and management accounting system in successful business planning. It explains how managers can assess business reports to improve performance and make qualitative decisions. It also discusses the benefits of implementing a management accounting system and its application in UCK Furniture.

Management accounting

INTRODUCTION
1. As per the stated case study, it is clear that UCK furniture is planning to commence a
training course for their new interns in September 2016.
2. Therefore, the presentation will emphasize upon the importance of management
accounting and management accounting system in the successful business planning.

Management accounting
1. Management accounting is a process whereby managers of UCK Furniture will make
assessment of their business reports i.e. cost reports, financial records and others. The main
purpose behind such is to improve firm’s performance through making viable and
qualitative decisions.
2. It is important for every corporations regardless their corporate sizes to create appropriate
business strategies and growth plans for deriving long-run success through the evaluation of
business performance.
3. It is significantly important to provide right financial advices to the UCK furniture for their
future development.

Contd.
1. Management Accounting System (MAS) is different from the management
accounting, it is a computer software that is used to collect the financial set of data
from regular business operations i.e. sales data, inventory reports, fluctuations in
material cost and so on and then convert the same into analytical reports.
2. With the help of this, paperwork can be eliminated and automate transactions helps to
summarize the financial transactions quickly and converts into meaningful sense for
making better decisions.

Different types of MA system
1. Cost Accounting system
2. Inventory management system
3. Accounting management system

Different methods used for management
accounting reporting
1. Budget report
2. Accounts receivable reports
3. Job costing report
4. Inventory report

Explaining the benefits of management accounting system
and its application
 MA system provides number of benefits to a
UCK Furniture after implementation,
mentioned below:
• Report integration and summarization
• Informed business decisions
• Strategic formulation
• Maximize efficiency

Contd.
 Larger profitability
 Simplifying the decision-making process
 Freedom & flexibility
 Future prediction

Critical evaluation of management accounting
system and management accounting
• MA is a concept which is directly related to the top level
managers in a business as they evaluate internal confidential
business reports to identify organizational issues and thereby
devise plans accordingly to combat the same.
• Unlike this, MA system has been defined as a value creators for
the firm & its progress as it generates summarized reports
promptly which managers utilize under the MA practices.
• MA is a process of planning, performance evaluation and
examining the critical success and progress of the business. In
despite, MA system is like a key tool that delivers useful
information to the UCK Furniture’s executives for the strategic
planning.

Contd.
• Under the MA, UCK’s top management keeps track records of
the regular corporative functions. It covers both the financial as
well as non-financial information. In contrast, MA system gives
only the financial information to the management for the purpose
of making informed business decisions.

REFERENCES
 Nam, G. and Park, J.W., 2016. A new approach to evaluating earnings
management models. International Journal of Managerial and Financial
Accounting. 8(3-4). pp.247-269.
 Otley, D. and Emmanuel, K.M.C., 2013. Readings in accounting for management
control. Springer.
 Simons, Robert. Performance Measurement and Control Systems for
Implementing Strategy Text and Cases: Pearson New International Edition.
Pearson Higher Ed, 2013.

Thank You!