logo

Principles of Management Accounting Report

   

Added on  2020-07-22

14 Pages4128 Words35 Views
Accounting

TABLE OF CONTENTSINTRODUCTION......................................................................................................................1TASK 1......................................................................................................................................11. Identifying the principles of management accounting.......................................................12. Presenting the most common accounting systems used by organizations.........................53. Assessing the role of management accounting and methods that can be used for thepurpose of reporting...............................................................................................................64. Explaining the manner in which management accounting is integrated within anorganization............................................................................................................................8CONCLUSION..........................................................................................................................8REFERENCES.........................................................................................................................10

INTRODUCTIONIn the present era, business unit places high level of emphasis on undertakingmanagerial accounting tools and techniques. The rationale behind this, managementaccounting tools provides input for the cost control and thereby helps in enhancing businessperformance in monetary terms. Such accounting field also provides high level of assistancein monitoring business activities and overall performance to a great extent. In this way,managerial accounting aid in decision making and contributes in the attainment oforganizational goals and objectives. The present report is based on Al Sham Automotive Co,which is operating in the small business segment of car industry. In this, report will highlightthe extent to which financial accounting varies from managerial. Besides this, it will providedeeper insight about the aspects of management accounting and reporting. Further, report alsodepicts the roles and responsibilities shared by accounting as well as financial managerwithin the firm. TASK 11. Identifying the principles of management accountingManagement accounting and reports provide managers with appropriate and timelyfinancial as well as statistical information. Hence, managerial reports assist in making day today and short-term decision that contributes in the growth of firm. Thus, managerialaccounting may be served as a process of analysing, interpreting and presenting informationin front of higher management team for decision making. By considering all such aspects AlSham Automotive Co lays emphasis on undertaking the tools and techniques of managementaccounting. Principles of management accounting: The main principles of management accountingwhich are accepted at global level as follows:Influence:In management accounting, decision making aspect is based on effectivecommunication so it must be influential. Hence, managerial accounting improves

decision making to a great extent by serving useful information at all level. Suchprinciple lays high level of emphasis on integrated thinking and assists inunderstanding the business areas in a prominent way. On the basis of decision makersneed relevant information is sourced and analysed under such field (Otley, 2016).Hence, by taking into account all such aspects it can be said that recommendations arehighly useful for decision makers and helps in the formulation of competent strategicframework. Relevance:The main focus of management accounting is on the relevancy aspect andappropriateness of information. Thus, as per the needs of stakeholders such asmanagement, managerial accounting team gathers relevant information and preparedthe same for analysis. Hence, such principle facilitates balance between past, presentand future related information (The 4 Global Management Accounting PrinciplesYour Company Can Adopt, 2017). Along with this, it also tends to make focus ongetting information about financial, non-financial, environmental and social aspects.This in turn helps in making appropriate decision for the business organization’ssuccess. Value:As per such principle, managers make focus on risk, cost, value generationandpotential of opportunities. Hence, scenario analysis is the most effectual techniquesthat can be undertaken by the firm to evaluate the impact of opportunities and risks. Inthis way, value principle of management accounting helps in assessing the waysthrough which firm can grab the opportunity and mitigate risk level. Trust:It entails and place emphasis on improving the trust of stakeholder group. Onthe basis of trust factor, it is highly required for firm to get feedback and give quickresponse to the questions and complaints (Weetman, 2016). By doing this, businessunit can indulge trust, creditability and thereby would become able to improveprocess as well as brand image. Integration: In accordance with such principle,information must be integrated withall the departments. Moreover, without having integration informationfirm is not inposition to develop competent framework for the near future. Difference between managerial and financial accounting are enumerated below:Basis of differenceManagerial accountingFinancial accountingMeaningIt offers input to theThis accounting system lays

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Management Accounting and Reporting
|14
|1027
|47

Management Accounting - Barry House Hotel
|18
|5179
|146

Significance of Management Accounting Tools in the Hospitality Industry
|16
|4424
|490

Management Accounting System Used by Dell with Hp
|13
|3741
|409

Management Accounting Qbic Hotel - Doc
|16
|4910
|45

Presenting the Significance of Management Accounting
|18
|3919
|39