The Key Area of Management Accounting Practice | Report
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Added on 2020-02-18
The Key Area of Management Accounting Practice | Report
Added on 2020-02-18
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Management accounting practice1Name of the studentTitle topic-Management accounting practiceUniversity name-
Management accounting practice2Table of ContentsTask 1..........................................................................................................................................................3INTRODUCTION...................................................................................................................................3LITERATURE REVIEW:.......................................................................................................................3Changes in the focus of management accounting practices.....................................................................3Management Accountant’s role in the contemporary business world..................................................4Customer’s value and Shareholder’s wealth........................................................................................7Contemporary techniques of resource management.............................................................................9Task 2........................................................................................................................................................12Cost allocation Methods........................................................................................................................12Report....................................................................................................................................................13Background.......................................................................................................................................13Practical analysis of the problem.......................................................................................................13Implications.......................................................................................................................................15Conclusion.................................................................................................................................................16Appendices........................................................................................................................................17References.................................................................................................................................................21
Management accounting practice3Task 1INTRODUCTIONThis report reflects the key understanding on the accounting practices and particular changes arise after implementation of newly adopted accounting practices and rules. In this report, key area of management accounting is related to the management accounting practice andbenefits arise from the newly introduced accounting practice on the business organizations. With the increasing ramification of economic changes, management accounting practice has been changing throughout the time and it is becoming cumbersome process for accountant to comply with implemented rules and regulations in determined approach. In this report, various newly introduced accounting rules and adopted management process system have been taken into consideration. It is considered that management department has to ensure all the changes in accounting rules and regulation with a view to adopt new process system and process management in determined approach. These accountants have to evaluate whether company is complying with all the rules and applicable standard while running its business effectively in organization (Muckstadt & Sapra, 2010).LITERATURE REVIEW:Changes in the focus of management accounting practicesAs per the perception of Muckstadt & Sapra, (2010) it is reflected that with the increasingramification of economic changes, management accounting practice has been changing and it is becoming cumbersome process for accountant to comply with implemented rules and regulationsin determined approach. These changing factors are imposing the requirement on business to change their ways of operating a management of business. There are several big organizations such as G.E. capital, Wesfarmers, Woolworth and Morrison plc. That has adopted changed management accounting practice in their accounting and reporting frameworks. These changed
Management accounting practice4have been adopted with a view to strengthen the accounting and reporting frameworks of organization and increasing transparency of business functioning to their shareholders. As per the perception of Christ, & Burritt (2013) it is reflected that there are several managementaccounting techniques which have been adopted by organizations such as cost management technique, ABC accounting technique, LIFO, FIFO methods, overhead absorption and apportions accounting technique and costing technique. However, accountants have become aware about these accounting techniques to manage their accounting practice in determined approach. Nonetheless, Multinational organizations set up different big rules and regulations for the management accounting practices with a view to strengthen the accounting and reporting frameworks and increasing transparency of business functioning to their shareholders. Ideally, when companies adopt different management accounting practice, then they have to evaluate various factors such as life cycle of business, size of business, regulatory requirements, modernisations of techniques and inventory management techniques. Management Accountant’s role in the contemporary business world As stated by Needle, (2010) it is reflected that with the changes in economic factors and business conditions, accountant has various responsibilities of management accountant and other executives of management. Management accountant has covered not only accounting task to manage the business transactions but also play important role in playing financial tasks in determined approach. However, there are several reporting and analysis work which are played by accountant in an organization.Reporting and analysis work:As per the views of Hada, Chakravarty & Mukherjee, (2014) it is divulged that Reporting of financial statement to stakeholders is an important functioning of organizations. The
Management accounting practice5management accountant is responsible for preparation the management accountant is responsiblefor preparation of reports on the functioning of various operations and to identify the root causes of any deficiency in the operations. Also the accountant is required to apply the analytical skills to the data of the company to compare the actual results with the benchmarks and to report the deviations, if any with the suitable recommendations.Formulation of Strategies: The management accountants are responsible to formulate the strategies for the management and the effective implementation of the same so as to achieve the targets and the goals effectively.Decision Making: The decision making function is the most crucial function in any organization as it require good amount of information to take important decisions for the company. The management accountant provides material and necessary to the top level management. Interpretation of Information: Management accountant helps in the interpretation of financial information provided to the management so that it becomes easy for the managers to understand the operating results. Advisor: Cost management is supposed to provide the best advice relation to various crucial matters on which management has to take firm decisions. The accountant is required to provide the advice which is best suitable to the company so as to improve the overall performance of the different functions of the company.Change Manager: As organization has to adapt to the changes that are rapidly occurring in the environment in which it is operating, the management accountant will help the firm to cope up with the changes by identifying and assessing the need and implications of changes through provision of updated information (Christ, & Burritt 2013)
Management accounting practice6Performance measurement: The management accountant helps the organization in measuring the performance of overall organization as well as the performance of individuals of the management such as employees and the managers.
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