Transcript Introduction to Management Accounting

Introduction to
Management Accounting
Dr.Meenakshi.A.singh
• Management accounting or managerial
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.
Definition of Management
Accounting:
• Provision of information required by management for
planning, organising and control - for such goals as:
- recording, analysing and reporting actual costs and
inputs of products, services and processes
- evaluating stocks of raw materials, W-I-P and finished
goods
- working with other functions:
- establishing standards of performance
- establish cost, revenue and quantity budgets
- (plus) evaluating alternative opportunities
Primary Users
Financial
Management
Investors
Internal managers
of the business
Creditors
Government
authorities (IRS,
SEC, etc.)
Purpose of Information
Financial
• Help investors,
creditors, and
others make
investment,
credit, and
other decisions
Management
• Help managers
plan and control
business
operations
Focus and Time Dimension
Financial
• Reliability,
objectivity, and
focus on the
past
Management
• Relevance
Type of Report
Financial
• Financial
statements
restricted by
GAAP
Management
• Internal reports
not restricted by
GAAP;
determined by
cost-benefit
analysis
Verification
Financial
• Annual
independent
audit by CPAs
Management
• No independent
audit
Scope of Information
Financial
Management
• Summary
• Detailed reports
reports primarily on parts of the
on the company
company
as a whole