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Basic Framework of Management Accounting: Prof. Mark Jing D. Tayactac, CPA, MBA, MDM

Management accounting provides information to managers for planning, directing, and controlling the organization. It involves determining and explaining costs, computing product costs, analyzing cost behavior, assisting with budgeting and decision making, and developing prices. Management accounting reports use historical, estimated, and projected data to support decision making and performance evaluation. In contrast, financial accounting provides external users like investors and regulators with financial position and results using historical data in accordance with accounting standards.

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Maria Christina Candelario
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© © All Rights Reserved
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31 views

Basic Framework of Management Accounting: Prof. Mark Jing D. Tayactac, CPA, MBA, MDM

Management accounting provides information to managers for planning, directing, and controlling the organization. It involves determining and explaining costs, computing product costs, analyzing cost behavior, assisting with budgeting and decision making, and developing prices. Management accounting reports use historical, estimated, and projected data to support decision making and performance evaluation. In contrast, financial accounting provides external users like investors and regulators with financial position and results using historical data in accordance with accounting standards.

Uploaded by

Maria Christina Candelario
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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BASIC

FRAMEWORK OF
MANAGEMENT
ACCOUNTING
Prof. Mark Jing D. Tayactac, CPA, MBA,
MDM
MANAGEMENT FUNCTIONS AND
THE NEED FOR MANAGEMENT
ACCOUNTING INFORMATION
1. Planning
2. Directing and Motivating
3. Controlling

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ACTIVITIES INVOLVED IN MANAGEMENT ACCOUNTING
1. Determining, accumulating, and explaining costs –
both manufacturing and non-manufacturing costs
2. Computing or determining product cost / service cost
3. Determining cost behavior
4. Providing assistance to management in profit
planning / budgeting
5. Accumulating and presenting data which may be used
by managers in decision-making
6. Providing bases for cost control with the use of
standard costs and other planned objectives
7. Assisting managers in developing the company’s prices
both for external and internal transactions

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APPLICATION OF
MANAGEMENT
ACCOUNTING
1. BUSINESS
2. NON-PROFIT
ORGANIZATIONS
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PRINCIPLES GOVERNING THE DESIGN OF
MANAGEMENT ACCOUNTING SYSTEM
1. The system should help to establish the
decision-making authority over the
organization’s assets
2. The information generated by the
system should support planning and
decision making
3. The reports should provide a means for
performance monitoring and evaluation
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MANAGEMENT ACCOUNTING VS.
FINANCIAL ACCOUNTING
MANAGEMEN
FINANCIAL
T
ACCOUNTING
USERS OF
ACCOUNTING
Internal users: officers and
External users: stockholders,
creditors, concerned government
REPORT managers
agencies

To provide internal users with


information that may be used by To provide external users with
managers in carrying out the information about the organization’s
PURPOSE functions of planning, controlling, financial position and results of
decision-making, and performance operations
evaluation

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MANAGEMENT ACCOUNTING VS.
FINANCIAL ACCOUNTING
MANAGEMEN
FINANCIAL
T
ACCOUNTING
TYPES OF
ACCOUNTING
Budgets, financial projections, cost Financial statements and the
analyses, etc., depending on the accompanying notes to such
REPORTS specific needs of management statements

BASIS OF Combination of historical, Almost exclusively on historical


REPORTS estimated, and projected data data

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MANAGEMENT ACCOUNTING VS.
FINANCIAL ACCOUNTING
MANAGEMEN
FINANCIAL
T
ACCOUNTING
ACCOUNTING Reports are prepared in accordance
STANDARD In preparing reports, the
with generally accepted accounting
S OF management of a company can set
principles and other
PRESENTATIO rules to produce information most
pronouncements of authoritative
N relevant to its specific needs
accounting bodies

Focus of reports is on the


REPORTIN company’s value chain, such as a Financial reports relate to the
G ENTITY business segment, product-line, business as a whole
supplier, or customer

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MANAGEMENT ACCOUNTING VS.
FINANCIAL ACCOUNTING
MANAGEMEN
FINANCIAL
T
ACCOUNTING
ACCOUNTING
Reports may cover any time period
PERIOD – year, quarter, month, week, day, Reports usually cover a year,
COVERED etc. Reports may be required as quarter, or month
frequently as needed

9
Thanks!
Any questions?

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