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Lecture 1- The Concept of Management Accounting (1)

Management accounting measures and reports financial information for internal users to assist in achieving organizational goals. It plays a crucial role in strategy formulation, planning, and resource allocation, while differing from financial accounting in its focus on internal users and non-regulatory nature. Additionally, management accounting aids in performance measurement and operational decision-making through effective resource control.

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Raisul Islam Bappy
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4 views10 pages

Lecture 1- The Concept of Management Accounting (1)

Management accounting measures and reports financial information for internal users to assist in achieving organizational goals. It plays a crucial role in strategy formulation, planning, and resource allocation, while differing from financial accounting in its focus on internal users and non-regulatory nature. Additionally, management accounting aids in performance measurement and operational decision-making through effective resource control.

Uploaded by

Raisul Islam Bappy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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The Concept of

Management Accounting
Definition
 Management Accounting-
• Measures and reports financial information for
internal users such as officers, management
teams, internal auditors, etc.
• Primarily assists the managers
• Aids the organization in fulfilling specified
goals and objectives
The Role of Management
Accounting
 Formulating strategies by informing the decisions
 Planning of long, medium, and short-term objectives
 Determining capital structure
 Designing motivational strategies
 Informing operational decisions by controlling
corporate resources effectively
 Maintenance of corporate governance, risk
management, and internal controls
Management Accounting vs
Financial Accounting
Areas Management Financial Accounting
Accounting
Relevant Users Internal users (Officers, External (Employees,
managers, internal Government, financial
auditors, etc.) institutions, etc.)
Regulations No such regulations like Follows the guidelines
IFRS and GAAP of GAAP and IFRS
Detail of Information Financial, non-financial, Focuses only on
and qualitative financial information
Reporting Interval Frequently Usually annual report
but it can be quarterly
and semi-annually
Time period Historical and current Only historical data
data
Management Accounting vs Cost
Accounting
Areas Management Cost Accounting
Accounting
Purpose To assists the managers To determine the cost of
in reaching an activity or an output
organizational goals
Users Internal Both internal and
external
Information Financial, non-financial, Financial and non-
and qualitative financial
Accounting systems and
Management Controls
 The major purposes are
• Strategy and overall long-term plans formulation
• Resource allocations decisions such as customers,
products, and pricing
• For operations and activities, planning and controlling
cost
• Performance measurement by evaluating people
• Meeting the requirements of external and legal reporting
Planning and Control
 Representation of financial plans
 Documenting the transactions and classifying
them in the accounting records
 Reports of preventive measures or actions
after comparing actual and budgeted
outcomes
Planning and Control
Designing the management
accounting systems
 Customer Focus  Key Success Factors (Cost, quality,
 time, and innovation
Value and supply chain analysis
 Continuous Improvement &
• Research and Development
Benchmarking
• Product design
• Production and marketing
• Distribution
• Customer service
Thank You

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