Management Accounting Systems: Application in Business Context

This presentation provides an overview of management accounting, its role, principles, and various systems used within a business context. It emphasizes the importance of management accounting in assisting administration for effective decision-making and achieving organizational goals. The presentation discusses different management accounting systems such as cost accounting, inventory management, and price-optimizing systems, along with various reporting methods including budget reports, accounts receivable aging reports, and inventory and manufacturing reports. It highlights the significance of accurate and relevant data in these reports for informed decision-making. The presentation concludes that systematic application of management accounting principles and systems is crucial for analyzing company performance and making informed decisions related to improvement and investment.

Management Accounting

Table of contents
 Introduction
 Management accounting.
 Different management accounting systems
 Different management accounting reporting methods.
 Conclusion
 References

Introduction
Management accounting refers to the process
of preparation of accounting reports through
which the managers of the firm take various
long and short term decisions. It helps in
analysing the position of organisation and
conveying it to the various interested parties.
The report is based on Prime Furniture, a UK
based dormant company.

Describe management accounting along with the
requirements of different management accounting
systems.
Management accounting is a tool of
providing help to administration for making
effective and efficient decisions through
which the goals of company can be achieved
optimally. Its techniques are useful in
controlling costs, making plans and directing
the activities related to the accounting
section.

Continued…
Importance/ Role:
It is very important to embrace this system in the structure of Prime furniture due to following
reasons:-
 Increases efficiency
 Imparts reliability
Principals of management accounting
 Relevance
 Principal of causality

Management accounting system
It can be defined as a methods used for controlling the financial aspects of company to attain organisational
goals. They prepare financial statements which further helps internal as well as external parties to analyse the
position and performance of firm for making various business related decisions. It assists Prime Furniture in
tracking costs incurred in various steps of production, determining the prices and controlling expenses.
There are number of systems used by Prime Furniture as discussed below:
 Cost Accounting system
 Inventory Management system
 Price-optimising system

Different methods used for management accounting
reporting
These are the statements which provides information about the internal scenario of business. They
establishes a base for various users to take multiple analytical decisions for the successful
achievement of company goals. The accounts department of Prime Furniture must consider that
the data recorded in these reports should be correct and relevant as they hold the capacity to
influence the choices made by parties. Misrepresented or incomplete information can lead to
wrong decision making for Prime Furniture as well as the investor. Along with this, it should be
represented in such a manner that it is understandable by all as it makes the results easy for its
users to read and interpret.

Continued…
Various types of these reports made by Prime Furniture is as follows:
 Budget Report
 Accounts Receivable Aging Report
 Inventory and Manufacturing Report

Conclusion
It can be concluded from the above PPT that a firm must apply various management
accounting principles and systems in its organisation systematically and accurately. Its helps in
analysing the performance of company accurately and assists in taking various decisions
related to improvement, investment etc. to the internal users of company. The multiple reports
made by businesses helps in generating information about the price to be offered, optimum
inventory level, excess levy of costs and many more.

References
 Adhariani, D., 2020. The influence of the ASEAN economic community on the future of the
management accounting profession. Meditari Accountancy Research.
 Gomez-Conde, J. and Lopez-Valeiras, E., 2018. The dual role of management accounting and
control systems in exports: Drivers and payoffs. Spanish Journal of Finance and
Accounting/Revista Española de Financiación y Contabilidad. 47(3). pp.307-328.
 Hiebl, M.R. and Richter, J.F., 2018. Response rates in management accounting survey
research. Journal of Management Accounting Research. 30(2). pp.59-79.
 Hoozée, S. and Mitchell, F., 2018. Who influences the design of management accounting
systems? An exploratory study. Australian Accounting Review. 28(3). pp.374-390.
 Pasch, T., 2019. Organizational lifecycle and strategic management accounting. Journal of
Accounting & Organizational Change.

Thank You