Comprehensive Report on Management Accounting: Systems and Integration

This report provides a comprehensive overview of management accounting, differentiating it from financial accounting and detailing its core components. It explores various management accounting systems, including cost accounting, price optimization, job costing, and inventory management, outlin...Read More

MANAGEMENT
ACCOUNTING
TASK 1

TABLE OF CONTENT
 INTRODUCTION
 MANAGEMENT ACCOUNTING
 DIFFERENCE BETWEEN MANAGMENET
ACCOUNTING AND FINANCIAL ACCOUNTING
 MANAGEMENT ACCOUNTING SYSTEM
 MANAGEMENT ACCOUNTING REPORTING
METHODS
 BENEFITS OF MA SYSTEM
 INTEGARTAION OF MA AND ITS SYYSTEM
 CONCLUSION
 REFERENCES

INTRODUCTION
Management Accounting implies to practice of conducting
the inner operating operations and implementing relevant
decisions to efficiently accomplish the business purpose.
This is generally used to make the necessary choices for
company's internal motives which involve financial and
non-fiscal information.

MANAGEMENT ACCOUNTING
Management accounting comprises financial details which
helps the managers in carrying out day-to-day
managing operations to improve both profitability level and
productivity. The primary focus of managerial accounting
practices is to assist the company and make productive
decisions except financial accounting that involves financial
statements for an organization's external interested parties.

DIFFERENCE BETWEEN MANAGEMENT
ACCOUNTING AND FINANCIAL
ACCOUNTING
Basis Management Accounting Financial Accounting
Meaning It mentions to those accounting
systems that help in offering
required data to managers. So
that they frame plan and
strategies to operate the
business of venture in effective
way.
This tool makes concentration
on the designing of financial
document of a company to the
fascinated function.
Objectives It help the management of the
company to frame tactics and
polices to analyse activity of
collecting deep and accurate
information.
The main motive of fiscal
accounting is to provide
financial data to externals.

DIFFERENCE BETWEEN MANAGEMENT
ACCOUNTING AND FINANCIAL
ACCOUNTING
Basis Management Accounting Financial Accounting
Time frame These types of reports are
framed according to the
requirement of the comoany.
These statement and documents
are created at the end of
financial year or after
competing accounting period.
User The inner administration of the
comoany can utilise these kinds
of system and tools.
The intrinsic and extrinsic
parties use the information that
is monitored with the assistance
of fiscal accounting.

MANAGEMENT ACCOUNTING
SYSTEM
This corresponds to specific internal mechanism that is employed
to assess and analyse an organisation's results/outcomes. These
frameworks or systems also valuable for integrating within an
enterprise because they help to determine and analyse a
company's routine operating activities. Here following is a
discussion on multiple system of MA, as follows:
 Cost accounting system: This kind of framework/system is
used to keep track of complete manufacturing processes and to
follow the specific processing cycles during the preparation
of finished products.

CONTINUE…
 Price Optimisation system: Price optimization
system determines or identifies consumer
reaction against price increase. Using such system
enterprise can assess the trends in price and demand as well
as about how they have to adjust price policy.
 Job costing system: This is designed to determine the
costs of manufacturing processes by classifying them in
specific jobs and determine the real amount of both the net
loss expended and the revenue generated by the company.

CONTINUE…
 Inventory management system: The objective of
implementing inventory management system/framework is to control
product movement across multiple supply chains and effectively execute
the business activities. Several key methods used in this system are
outlined as below:
 LIFO: The company's last goods purchased are sold or processes first
relative to latest purchased goods as per LIFO process of valuation of
inventories.
 FIFO: The very first product the organization buys as per FIFO method
is considered to sold or processed first.
 Average cost method: Here under this method costs of all the
inventories are simply averaged to value losing costing.

MANAGEMENT ACCOUNTING
REPORTING METHODS
 Cost accounting Reporting: This reporting method offers
wide range of details and information relating to multiple
costs incurred by corporation like Prime Furniture
throughout the manufacturing or production processes or
phase.
 Performance Reporting: This reporting method primarily
provides detailed data or information regarding employees’
performance within organisational structure.

CONTINUE…
 Inventory management reporting: Inventory management
reporting method offers numerous inventories details along
with actual movement of inventories that help control the
inventory-items in real-time like inventory transfer, quality
variations, and many more.
 Budget reporting: Budget reporting method is designed to
monitor the company's internal output and guide the position
of different departments to reduce excessive spending. Report
prepared under it is being used to equate real spending with
expected spending over the specified period of time.

BENEFITS OF MA-SYSTEMS

CONTINUE…

INTEGRATION BETWEEN
MANAGEMENT ACCOUNTING AND
ITS SYSTEM
Practically, Managerial Accounting is core base of whole
organisational structure as for different key organisational
aspect it provides a specific system which not only support
the basic framework of organisation but also maintain it
effectively. Systems of MA are indeed are structure form of
Different ordinary organisational processes.

CONCLUSION
From the above presentation it has been articulated that
managerial accounting is effective framework which offer
vital information to top managing staff by transforming raw
data into such information, this is wider and core aspect
which enable managers to take effective decision.

REFERENCES
 Arroyo, P., 2012. Management accounting change and
sustainability: an institutional approach. Journal of
Accounting & Organizational Change. 8(3). pp.286-309.
 Chenhall, R. H. and Moers, F., 2015. The role of innovation
in the evolution of management accounting and its
integration into management control. Accounting,
organizations and society. 47. pp.1-13.