Report on Managerial Accounting Methods and Their Relevancy

This project report provides a comprehensive overview of managerial accounting, exploring different methods and their applications within organizations. It delves into various management accounting systems, including Just-in-Time (JIT), Total Quality Management (TQM), and the Balanced Scorecard, and analyzes their relevance in contemporary business environments. The report examines the impact of these systems on managerial personnel and overall company performance, emphasizing their role in improving operational efficiencies. Furthermore, it discusses the importance of management accounting in competitive markets and uncertain business environments. The report also includes case studies of multinational manufacturing companies and reinforces steel bar manufacturers, to illustrate the practical application of these accounting techniques and their influence on decision-making and strategic planning. Finally, the report summarizes the learning outcomes derived from the research findings, offering valuable insights for Australian management accountants.

MANAGERIAL
ACCOUNTING

ABSTRACT
The project report summarise about different kind of management accounting systems in
the aspect of corporation as well as way companies manage their financial performance. In
addition, the report summarise about impact of accounting systems on managerial personnel and
overall performance of companies that helps in improvement in efficiencies of operations.

Table of Contents
ABSTRACT.....................................................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
1. Different types of management accounting methods from the given case study....................4
2. Relevancy of management accounting system with contemporary organization...................6
3. Role of management accounting system in competitive market and uncertain business
environment.................................................................................................................................8
4. Learning outcomes based on research findings which will be helpful for Australian
management accountants............................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
The term managerial accounting can be defined as process of gathering, assessing,
analysing, interpreting and spreading the financial informations to the internal stakeholders of
companies for better decision-making (Fellows and Liu, 2017). This accounting varies from
financial accounting because, it is linked with helping to managers in order to take effective
decisions, while financial accounting is beneficial for internal and external stakeholders. The aim
of this project report is to describing various kind of management accounting methods and many
more. Basically, the project report is based on two articles that includes about implementation of
modern management accounting systems in different countries. The selected article is about a
multinational manufacturing company in that modern management accounting systems are
applied.
Under the project report, management accounting techniques in given case and evaluation
of relevancy of MAS with case company is done. As well as an another real life company is
selected from an article and compared with given case company. In the end part of report, four
outcomes are explained from selected two articles.
MAIN BODY
1. Different types of management accounting methods from the given case study.
The term management accounting can be defined as a field of accounting that is
associated with preparation of wide range of internal reports by using financial and non financial
information (Adebambo and Yan, 2017). This accounting is useful for only to internal
stakeholders because provided information helps only to managers in better decision-making as
well as in strategy preparation. Basically, this accounting is based on various kind of accounting
methods. Herein, the aspect of provided case-study the multinational company is using below
mentioned accounting methods that are as follows such as:
 Just in time ( J. I. T. )- It can be defined as a kind of inventory strategy that guides
organisations in ordering and receiving materials as per requirement in production
procedure. The main objective of this approach is to minimising additional cost in
production that leads in savage of money to companies. Eventually, this is essential of
companies to order or purchase new material on the basis of availability of material and

warehouses as well as need of production department. In the context of multinational
manufacturing company, this technique of management accounting is too crucial because
by help of it, they initiate purchasing of material as per need. On the other hand, in
absence of this technique it can be difficult to companies to manage purchasing of
material that can lead to more production cost.
 Total quality management ( T. Q. M. ) - It can be defined as a kind of management
accounting technique that is associated to improving quality of a company's outputs,
products and services by enhancing internal operations (Chakravorty and Chaturvedi,
2015). This technique of management accounting is linked with the improving customers'
experience. It is so because if companies will offer better quality of products and services
then this will automatically improve customer's experience. Apart from it, this is also
useful for enhancing skills and capabilities of employees because if organisations want to
achieve target of better quality of products and services then it is important to have highly
skilled of employees. In the aspect of multinational companies, the TQM is very crucial,
this is so because by help of it they can assess actual problem and on the basis of it make
suitable plans, strategies to resolve. On the other side, in absence of this accounting
technique it can be tough for multinational companies to survive at global level. It is so
because, this is essential to maintain an effective level of quality of products and services
if companies want to perform well at global stage.
 Balance scorecard- The term balanced scorecard can be defined as a kind of technique of
management accounting that is associated to measuring performance of various activities
as well as to translate organisational strategies into clear objectives (Thoelen and Zanoni,
2017). In general, this is being used by managers to track the performance by assessing
execution of all activities. In the aspect of multinational manufacturing companies, this
technique is very crucial because there are various kind of activities and are required to
be executed in an effective manner. This can become possible only by this technique.
So these are the management accounting techniques that are discussed in given case scenario of
multinational manufacturing company.

2. Relevancy of management accounting system with contemporary organization.
The management accounting systems are beneficial for all kind of organisations. This is
so because these accounting systems have a link with organisational process and activities. In
addition, companies need to comply with these systems to get better results as well as to sustain
in competitive environment. Hence, this can be said that MAS are aligned with contemporary
organisation. Below the relevancy of these accounting systems with organisations are mentioned
that are as follows such as:
(I). Evidence from Multi-national Manufacturing Company:
On the basis of given case study, this can be find out that company A applies a kind of
framework in that headquarters play an important role. The headquarters of company manage all
branches of different locations at strategic-level. In addition, provides support in effective
planning and decision-making. The managerial personnel is categorised into three levels which
are higher, medium and lower. The higher level of managerial personnel is linked in process of
creation of effective plans and policies to achieve the goals and target easily. While the
managerial personnel at middle level is involved in process of gathering internal and external
data for making tactical-decisions. In addition, the managerial personnel at lower level is
involved in compilation of companies' tasks and activities that leads to operating decision-
making.
In company A, at the operational level the managerial personnel assess key performance
indicators in relation to every level of production. Eventually, the analysis of key performance
indicator is done by help of pre-set level of production of each stage. It becomes possible by
comparing of actual result with budgeted results. As well as in the case of negative result,
suitable changes are done to enhance production level.
The managerial personnel at tactical-decision level is involved in process of managing
various kind of tactical issues (VANDAMME, 2019). Eventually, it consumes time of 6 to 12
months in process of making management accounting system useful for managers by gathering
and analysis of data. In the tactical decision making, the factors are based on internal data and
comparison as well as demand of customers.
Company A depends on framing of strategies that exceeds the time limit of one year , at
the strategic-level management. The managerial personnels are needed to focus on external
factors so that various kind of stakeholders can attract towards company. Under the external

factors economical events, multinational policies, interest rates, worldwide economic crises etc.
are included. The senior management personnel gathers information from these factors that
become an important framework for better decision-making.
Apart from it, company A applies a wide range of management accounting techniques
and systems such as just-in-time ( J. I. T. ) , total quality management ( T. Q. M. ) , balance
scorecard and activity based costing. Each of these accounting techniques help in corporate
organisations at different stages and in achieving higher growth. Like just in time helps in
effective management of inventories as well as for reducing additional cost of production. Same
as the total quality management is linked with improving quality of products and services.
(II). Discussion about management accounting systems in company:
The chosen article focuses on activity based costing system which defines modern
companies to improve framework of activities in aspect of Reinforcing steel bar manufacture
(Peterson, 2016). The objective of this research is to evaluate about the way through which
various kind of accounting systems effect development of companies. As well as the major
objective of research is to evaluating the process by which activity based costing helps in finding
issues regarding to production. Eventually, the activity based costing is being applied by
management department because it helps in categories activities into multiple parts and allocates
cost into these activities separately. As well as finds the difference in actual cost & output by
comparing with standards.
As per the given case study, this can be stated that above Reinforcing steel bar
manufacture limited company is having problem related to implementation of activity based
costing system in their operations (Reynolds, 2017). The company have identified various kind
of technical issues that contains improper access of information and ineffective allocation of
funds. For an example, information related to sales volume is needed to be allocated in activity
based costing but this is difficult to find out the actual data about sales volume. Hence, the key
issue of above Reinforcing steel bar manufacture limited company is about inefficiency about
access of information about various kind of costs.
In the Reinforcing steel bar manufacture limited company, they are not using a computer
based accounting system for purpose of recording companies' financial transaction in a digital
manner (Chen & Wang, 2016). Due to this, it becomes difficult for company to get information

about daily occurred financial transaction. In addition, this is resulting in higher time consuming
in process of recording transactions as well as it leads to late in decision-making process. Apart
from it, in company another issue is related to lack of communication between management
department and accounts department. This is resulting in various kind of conflicts in aspect of
decision-making. Eventually, the proper communication between these two departments is
necessary because if there will be share of information between these two then it will be easy to
managers to take right decisions. In addition, the managers will also help to accountants about
providing information related to financial transactions.
In addition, the accountants do not have effective understanding of manufacturing
process. In the Reinforcing steel bar manufacture limited company, researchers can collect data
in three months in which organisations' proprietor may support. This is important for above
company to apply an effective costing system that should be equal for all as well as it can resolve
the issue of accessing financial information. The companies' accountants required to get
complete information so that they can produce financial statements about company which may
help to the managers in better decision-making (Boyson and Mooradian, 2016).
3. Role of management accounting system in competitive market and uncertain business
environment.
The role of management accounting systems is very crucial in context of competitive
market and uncertainty of business environment. This is so because each accounting system has
its own feature and functions which are useful for different aspect of companies. Specially, at
global level the role of management accounting system is more wider and crucial because they
operates their activities across the border. As well as management accounting systems are useful
for all kind of companies and it depends on their way to operate these accounting systems.
Herein, below role of management accounting systems for companies is mentioned that is as
follows:
 Electronic business- This is the era of new and advanced techniques & technologies.
Only those companies can survive in competitive market who adopts new techniques and
operates their business by electronic medium (Sharpe and Hanson, 2018). The
management accounting systems are being used by companies by help of computer
based system. Apart from it, there are some other software such as ERP (Enterprise

resource planning) and many more that leads bringing business activities at global level
by use of electronic medium. In addition, this role of management accounting system
helps in sustaining competitive and uncertain environment because of implementation of
new techniques.
 Enhancement of customer's value- Another role of management accounting system is
that these systems help in improving the value of customers (Lado-Sestayo and
Fernández-Castro, 2019). It is so because by implementation of various kind of
accounting systems, corporate organisations can improve quality of products and
services. As well as these accounting systems are also useful for tracking the availability
of material such as by help of just-in-time methodology. These all role of management
accounting systems lead to improved customer satisfaction. As well as in this
competitive environment only those companies can survive who are able to satisfy their
customers in an effective manner and all this become possible by help of management
accounting systems.
 Improves in efficiencies- In addition, the management accounting systems are useful for
enhancement of efficiency of business activities and operations. This is so because
various kind of accounting systems like price optimisation system, inventory
management system etc. lead to managing all business activities in an effective manner.
Apart from it, these accounting systems also lead to compilation of business activities on
time and in cost effective manner. All these importance of management accounting
systems help in sustaining in competitive and uncertain business environment.
So these are the importance of management accounting systems.
4. Learning outcomes based on research findings which will be helpful for Australian
management accountants.
The first case study is about effectively implementation of various kind of management
accounting systems. Eventually, these accounting systems are linked with collecting and analysis
of all financial and non financial information that leads to better decision-making and strategy
creation (Sulistyowati and Andreany, 2018). The managerial personnels are required for
development of futuristic plans and policies. In company A, the managerial personnels applied
various kind of accounting systems to improve the organisation's financial performance. In the
strategic level management, company is focusing on implementation of strategies for time period

of more then one year. In this aspect, the role of external factors can not be neglected. This is so
because these factors are useful in context of increasing the various kind of stakeholders who
willing to invest in companies operations.
Eventually, this is necessary for a multinational manufacturing company to adopt
management accounting systems for improvement of quality of products and services. As well as
to sustain at global level (Ndubisi and Money, 2015). Apart from it, this is necessary for an
Australian based company to create a kind of organisational structure in which various kind of
accounting systems can be implemented. The role of these accounting systems is beneficial for
not only to adapting organisation but also for individuals. It is so because by implementation of
these skills and capabilities of employees automatically improves to achieve the set targets.
While from the second article, this can be concluded that it is essential for companies to
apply new and advanced technologies along with management accounting systems. The
alignment of advanced technologies and accounting systems is crucial for sustaining at
competitive business environment (Pizzutilo and Roncone, 2017). Though, there are various kind
of companies which are not adapting new techniques in their operations. Such as in the context
of S limited, they are having problems in implementation of activity based costing system. Apart
from it, company is facing the problem of lack of analysed financial information whose reason is
poor implementation of accounting systems. As well as the above company is not using
computer based accounting system in the process of recording financial transactions. The
individuals who work in company, they do not have enough understanding about financial
statements as well as to keep balancing record of all financial transactions. Hence, this is
important to S limited to apply the management accounting systems effectively and to provide
crucial information to managers so that they can make decisions.
CONCLUSION
On the basis of above project report, it has been concluded that the role various kind of
management accounting system is vital for companies because of important information
provided by these systems. Under the project report, both selected journals are based on
implementation of accounting systems to accomplish the goals and objectives. This plays an
important role in the aspect of improving production level and level of profit of entities in an
effective manner. As well as managerial personnels of companies are useful for better adaption

of management accounting systems and improves the skills of workers. Such as just in time
system of management accounting leads to making purchasing decision of material effective as
well as total quality management approach is useful in enhancement of quality of products and
services.

REFERENCES
Books and Journals:
Fellows, R. and Liu, A.M., 2017. ‘What does this mean’? Sensemaking in the strategic action
field of construction. Construction management and economics. 35(8-9). pp.578-596.
Adebambo, B. N. and Yan, X., 2017. Investor Overconfidence, Firm Valuation, and Corporate
Decisions. Management Science. 64(11). pp.5349-5369.
Chakravorty, S. and Chaturvedi, S., 2015. Visas: How They Work—An India–Bangladesh Case
Study. Strategic Analysis. 39(3). pp.303-318.
Thoelen, A. and Zanoni, P., 2017. 9 Bringing strategy back. Critical Perspectives on
Entrepreneurship: Challenging Dominant Discourses. p.146.
VANDAMME, F., 2019. 1-The Commission's Motives in Presenting its Proposal for a
Directive. Employee Consultation and Information in Multinational Corporations.
Sharpe, S. and Hanson, N., 2018. Can socially irresponsible firms benefit from corporate
advertising?. Journal of Strategic Marketing. pp.1-12.
Lado-Sestayo, R. and Fernández-Castro, Á .S., 2019. The impact of tourist destination on hotel
efficiency: A data envelopment analysis approach. European Journal of Operational
Research. 272(2). pp.674-686.
Sulistyowati, A. and Andreany, D., 2018. PARTISIPASI ANGGARAN DAN KINERJA
MANAJERIAL DENGAN MOTIVASI SEBAGAI PEMEDIASI (Studi Pada Pemerintah
Daerah Kabupaten Wonogiri) (Doctoral dissertation, Institut Agama Islam Negeri
Surakarta).
Ndubisi, N. O., Nataraajan, R., Sampson, S .E. and Money, R. B., 2015. Modes of customer co-
production for international service offerings. Journal of Service Management.
Pizzutilo, F. and Roncone, V., 2017. Red sky at night or in the morning, to the equity market
neither a delight nor a warning: the weather effect re-examined using intraday stock
data. The European Journal of Finance. 23(14). pp.1280-1310.
Peterson, A., 2016. Descriptive study of the daily activities and roles of a Catholic elementary
school principal (Doctoral dissertation, University of San Francisco).
Reynolds, D .S., 2017. A Content Analysis: Inclusion Climate in Higher Education in the Oregon
University System of Seven Oregon Universities (Doctoral dissertation, Grand Canyon
University).
Boyson, N .M., Ma, L. and Mooradian, R. M., 2016. Serial activists. Northeastern U. D’Amore-
McKim School of Business Research Paper. (2727371).
Chen, W.T. & Wang, C.W. 2016, "APPLICATION OF ACTIVITY-BASED COSTING ON
REINFORCING STEEL BAR MANUFACTURER", International Journal of
Organizational Innovation (Online). vol. 9. no. 1. pp. 228-243.