ch01s - Management Accounting Information That Creates...

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Management Accounting: Information That Creates Value Chapter 1
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Management Accounting Information Management accounting provides both financial information and nonfinancial information The role of management information supports strategic (planning), operationa l (operating) and control (performance evaluation) management decision making
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Users of Accounting Information Internal managers Internal managers Creditors:                      Creditors:                      Suppliers                                 Suppliers                                  Bankers  Bankers Day-to-day operating decisions Day-to-day operating decisions Long-range strategic decisions Long-range strategic decisions Management Management Accounting Accounting Financial Accounting Financial Accounting External Users External Users Investors: Stockholders Investors: Stockholders Government Authorities Government Authorities
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Examples of management accounting information include: The reported expense of an operating department The costs of producing a product The cost of delivering a service Management Accounting Information
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Management Accounting Information Management accounting also produces measures of : Business units Divisions Departments These measures help senior managers assess the performance
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Management Accounting Information Management accounting information is a key source of information for decision making , improvement , and control in organizations Effective management accounting systems provide value by providing timely and accurate information about the activities required for their success
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Changing Focus Traditionally , management accounting information has been financial information Management accounting information has now expanded: Quality and processes More subjective measurements, such as: Customer satisfaction Employee capabilities New product performance
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Financial v. Management Accounting Financial Accounting Communicates economic are external to the direct operations of the
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ch01s - Management Accounting Information That Creates...

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