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    Management Accounting

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    τυσηαρ ηαβιβ
    Management accounting provides accounting information to managers within organizations to aid in decision making and help manage various business functions. It helps plan strategies, evaluate performance, and control operations. Management accounting differs from financial accounting in its focus - it produces internal reports for management rather than external reports for stakeholders. In developing countries like Bangladesh, management accounting plays an important role in planning, controlling, organizing, motivating, and decision making for organizations. It assists with recording transactions, budgeting, monitoring performance, analyzing costs and profits, and providing key financial data to evaluate strategies and control expenses. Thus, management accounting is a valuable tool that supports management and helps businesses operate effectively.

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    Management Accounting

    Uploaded by

    τυσηαρ ηαβιβ
    133 views5 pages
    Management accounting provides accounting information to managers within organizations to aid in decision making and help manage various business functions. It helps plan strategies, evaluate performance, and control operations. Management accounting differs from financial accounting in its focus - it produces internal reports for management rather than external reports for stakeholders. In developing countries like Bangladesh, management accounting plays an important role in planning, controlling, organizing, motivating, and decision making for organizations. It assists with recording transactions, budgeting, monitoring performance, analyzing costs and profits, and providing key financial data to evaluate strategies and control expenses. Thus, management accounting is a valuable tool that supports management and helps businesses operate effectively.

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    Management Accounting

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    Management accounting provides accounting information to managers within organizations to aid in decision making and help manage various business functions. It helps plan strategies, evaluate performance, and control operations. Management accounting differs from financial accounting in its focus - it produces internal reports for management rather than external reports for stakeholders. In developing countries like Bangladesh, management accounting plays an important role in planning, controlling, organizing, motivating, and decision making for organizations. It assists with recording transactions, budgeting, monitoring performance, analyzing costs and profits, and providing key financial data to evaluate strategies and control expenses. Thus, management accounting is a valuable tool that supports management and helps businesses operate effectively.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    133 views5 pages

    Management Accounting

    Uploaded by

    τυσηαρ ηαβιβ
    Management accounting provides accounting information to managers within organizations to aid in decision making and help manage various business functions. It helps plan strategies, evaluate performance, and control operations. Management accounting differs from financial accounting in its focus - it produces internal reports for management rather than external reports for stakeholders. In developing countries like Bangladesh, management accounting plays an important role in planning, controlling, organizing, motivating, and decision making for organizations. It assists with recording transactions, budgeting, monitoring performance, analyzing costs and profits, and providing key financial data to evaluate strategies and control expenses. Thus, management accounting is a valuable tool that supports management and helps businesses operate effectively.

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    What do you mean by management accounting?

    Management accounting is concerned with the provisions and use of accounting information to managers within organizations, to provide them with the basis to make informed business decisions that will allow them to be better equipped in their management and control functions.

    According to the Chartered Institute of Management Accountants (CIMA), Management Accounting is "the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan, evaluate and control within an entity and to assure appropriate use of and accountability for its resources. Management accounting also comprises the preparation of financial reports for non management groups such as shareholders, creditors, regulatory agencies and tax authorities"

    The American Institute of Certified Public Accountants (AICPA) states that management accounting as practice extends to the following three areas:

    Strategic Managementadvancing the role of the management accountant as a strategic partner in the organization. Performance Managementdeveloping the practice of business decision-making and managing the performance of the organization. Risk Managementcontributing to frameworks and practices for identifying, measuring, managing and reporting risks to the achievement of the objectives of the organization.

    The Institute of Certified Management Accountants (ICMA), state "A management accountant applies his or her professional knowledge and skill in the preparation and presentation of financial and other decision oriented information in such a way as to assist management in the formulation of policies and in the planning and control of the operation of the undertaking. Management Accountants therefore are seen as the "value-creators" amongst the accountants. They are much more interested in forward looking and taking decisions that will affect the future of the organization, than in the historical recording and compliance (scorekeeping) aspects of the profession. Management accounting knowledge and experience can therefore be obtained from varied fields and functions within an organization, such as information management, treasury, efficiency auditing, marketing, valuation, pricing, logistics, etc."

    Differentiate between financial accounting & management accounting?


    Management Accounting Compared with Financial accounting the following table summarizes the main differences between management accounting and financial accounting. Management accounting Financial accounting

    A financial accounting system produces A management accounting system information that is used by parties external produces information that is used within an to the organization, such as shareholders, organization, by managers and employees bank and creditors. Management accounting helps management to record, plan and control activities and aids the decision making process. There are no legal requirements for an organization to use management accounting. Management accounting can focus on specific areas of an organizations activities. Information may aid a decision making rather than be an end product of a decision. Financial accounting provides a record of the performance of an organization over a defined period and the state of affairs at the end of that period. Limited companies must, by law prepare financial accounts. Financial accounting concentrates on the organization as a whole, aggregating revenues and costs from different operation. Financial accounts are an end themselves.

    Management accounting information may Most financial accounting information is of be monetary or alternatively non monetary. a monetary nature. Management accounting provides both an historical record of the immediate past and a future planning tool No time span for producing financial statements Financial accounting presents an essentially historical picture of past operation. Financial statements are required to be produced for the period of 12 months.

    No strict rules govern the way in which Financial accounting must operate within a management accounting operates. The framework determined by law management accounts and information are and IASs. In principle the financial prepared in a format that is of use to accounts of different organizations can be managers easily compared. Management accounting has no specified format. There are no specific statements which should be produced. Financial accounts are supposed to be produced in accordance with a specified format by IAS or law.

    What are the uses & importance of management accounting in developing country like Bangladesh?

    Uses of management accounting


    Record keeping

    recording business transactions measuring results of financial changes projecting financial effects of future transactions preparing internal reports in a user-friendly format

    Planning and control


    collecting cash controlling stocks controlling expenses co-ordination and monitoring of strategy/performance

    Decision making

    using cost information for pricing, capital investment and marketing evaluating market and product profitability evaluating the financial effect of strategies and plans

    The role of management accounting in developing countries like Bangladesh:


    Assistance in planning The management accounting assists planning by providing information. This information may be about pricing, capital expenditure projects, product costs or competition. In the short-term planning process of budgeting, the management accountant provides information on past costs and revenues which may be used as guidance. The management accountant is also involved in the budgeting process itself. Assistance in controlling The management accounting supplies performance reports which compare actual performance with the planned performance and which therefore highlight those activities which are not conforming to plan. Assistance in organizing By ensuring that the accounting system is tailored to the organizational structure, the management accountant reinforces the objectives of the organizational framework. Assistance in motivating Budgets prepared by the management accountant serve to motivate managers and subordinates to attempt to achieve the organizations objectives. Formalized targets are more likely to motivate than vague comments. Performance reports produced by the management accountant for the control process also motivate by communicating performance information in relation to the targets which have been set. Assistance in decision making The management accounting is a vital cog in the organizations decision making process. He or she collects and analyses data, and presents information to managers to help in the decision making.

    So Management accounting is very important for developing countries like Bangladesh.

    ASSIGNMENT
    On

    Management Accounting

    Submitted To: Mr. Ashutosh Nath


    AHSANULLAH UNIVERSITY OF SCIENCE & TECHNOLOGY SCHOOL OF BUSINESS.

    Presented By:
    MD. Habibur Rahman
    ID: 05.01.02.003

    WILLIAM CHOWDHURY
    ID: 05.01.02.012

    4th year, 2nd semester. Date: 30th , 2008.

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