Management Accounting

Management Accounting - Management Accounting Kenroy...

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Management Accounting Kenroy Fletcher ACC 206 Keith Graham September 28, 2009 Management Accounting Management accounting plays an important role in managing today’s corporations, firms, or any other businesses that is trying to be successful. 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. It focuses on information for internal
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decision making by the company’s managers. “Management accounting provides information to help managers plan and control operations as they lead the business. This includes managing the company’s plant, equipment, and human resources. Management accounting often requires forward-looking information because of the futuristic nature of business decisions (Horngren & Harrison, accounting, 7 th ed, 2007, p. 901).” 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 Resource (economics)resources. Management accounting also comprises the preparation of financial reports for non-management groups such as shareholders, creditors, regulatory agencies and tax authorities" (CIMA Official Terminology). The American Institute of Certified Public Accountants (AICPA) states that management accounting as practice extends to the following three areas: 1. Strategic Management – Advancing the role of the management accountant as a strategic partner in the organization. 2. Performance Management –Developing the practice of business decision-making and managing the performance of the organization. 3. Risk Management –Contributing 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), states "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
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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
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This note was uploaded on 01/12/2012 for the course ACCT ACC305 taught by Professor Mark during the Spring '10 term at Ashford University.

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Management Accounting - Management Accounting Kenroy...

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