Management Accounting: Systems, Methods, and Reporting in Business

This report delves into the core concepts of management accounting, elucidating its significance in decision-making, planning, and performance management. It outlines four key principles: influence, relevance, value, and credibility, which underpin effective management accounting practices. The report then explores four main management accounting systems: job costing, cost accounting, inventory management, and price optimization, highlighting their benefits for businesses like CORUS. Furthermore, it details various reporting methods used in management accounting, including budget reports, accounts receivable reports, job cost reports, inventory reports, and performance reports, providing insights into their applications and importance for strategic decision-making. The report concludes with a list of references, including books and journals, to support the information presented.

MANAGEMENT ACCOUNTING

TASK
P1. Explaining meaning of management accounting and significance of
its systems
Management accounting refers to the profession that includes participating
in the decision making of management, devising for planning, system of performance
management. It provides for facilitating expertise in the financial reporting and also
controlling for enabling the management in formulating strategy of an enterprise.

Continued
4 major principles of MA are as follows-
 Influence- Effective communication of the crucial information ensures possibility for
the MA in cutting across the silos and encourages for an integrated process.
 Relevance- MA seeks for best possible availability of the resources for the information
that is pertinent to decision that is to be taken.
 Value- It entails for assessing an information along with generating value pathway,
concentrating on risks, gauging for the possible opportunities, expenses and possibility
of value generation opportunities in the business.
 Credibility- Stewardship forms a credibility where responsibility and the scrutiny assist
in making the decisions more and more purposeful.

Continued
4 main MA systems are as follows
 Job costing system- It referred as the practice of collecting an information regarding the
cost attached with the particular production or the job.
 Cost accounting system- - It means the framework that is been used by CORUS in
estimating their product cost for analysing the profits, valuing inventory and controlling
cost.
 Inventory management system- It is the system that combines technology, procedures
and the processes for overseeing, maintaining and monitoring stocked products
 Price optimization system- It present mathematical analysis for an enterprise that
reflects the response of the customers at different price level of an entity's products and
the services through the use of different channels.

Continued
Systems Benefits
Cost accounting system It helps in determining an
unprofitable activities, inefficiencies
and losses in any of the form.
Job costing system This systems helps in monitoring the
cost throughout the process of
producing the product.
Inventory management software It acts as the most useful system for
CORUS as it provides for better cash
flow reporting and the forecasting
capabilities.
Price optimization It helps the company in determining
the best prices in accordance with
the expectation of the customers.

P2. Explaining various methods that is been used for the reporting under MA
 Budget report- This report represents the estimated figures regarding the income and the
expense for the particular period on the basis of the actual expenses in the prior periods.
 Accounts receivable report- It is the MA report that breaks down the balances of the
customer that are been owed and due on part of them to CORUS.
 Job cost report- This report is been prepared for showing an expenses for the specific
project that is financed by CORUS.
 Inventory report- It is been prepared for maintaining the record of the physical
inventory so that optimum use of the resources can be attained as it helps in identifying
the need of the resources and its availability in manufacturing the product efficiently and
effectively.
 Performance report – – It is the MA report that shows analysis about the performance of
an entire CORUS and its employees at year end. Managers creates this report for making
strategic decisions in relation to the future of an entity.
 Other reports- It involves the major reports that are been prepared by the managers such
as project reports, information reports, competitors analysis report which are tended to
be vital for CORUS.

REFERENCES
Books and Journals
Alaeddin, O. and et.al., 2019. The Effect of Management Accounting Systems in Influencing
Environmental Uncertainty, Energy Efficiency and Environmental Performance. International
Journal of Energy Economics and Policy. 9(5). p.346.
Maas, K., Schaltegger, S. and Crutzen, N., 2016. Integrating corporate sustainability assessment,
management accounting, control, and reporting. Journal of Cleaner Production. 136. pp.237-248.
Quinn, M. and et.al., 2018. Future research on management accounting and control in family firms:
suggestions linked to architecture, governance, entrepreneurship and stewardship. Journal of
Management Control. 28(4). pp.529-546.
Schaltegger, S., Etxeberria, I. Á. and Ortas, E., 2017. Innovating corporate accounting and reporting for
sustainability–attributes and challenges. Sustainable Development. 25(2). pp.113-122.
Sinaga, O. and et.al., 2019. The Role of Management Accounting Systems, Energy Efficiency and
Organizational Innovation in driving Competitive Advantage and Firm Performance. International
Journal of Energy Economics and Policy. 9(3). pp.395-402.
Stacchezzini, R., Melloni, G. and Lai, A., 2016. Sustainability management and reporting: the role of
integrated reporting for communicating corporate sustainability management. Journal of
Cleaner Production. 136. pp.102-110.