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Management Accounting
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. In contrast to financial accountancy
information, management accounting information is:
primarily forward-looking, instead of historical model based with a degree of
abstraction to support decision making generically, instead of case based;
designed and intended for use by managers within the organization, instead of
being intended for use by shareholders, creditors, and public regulators;
usually confidential and used by management, instead of publicly reported;
computed by reference to the needs of managers, often using management
information systems, instead of by reference to general financial accounting
standards.
One
simple definition of management accounting is the provision of financial and
non-financial decision-making information to managers.According to the
Institute of Management Accountants (IMA): "Management accounting is a
profession that involves partnering in management decision making, devising
planning and performance management systems,and providing expertise in
financial reporting and control to assist management in the formulation and
implementation of an organization's strategy".
The
American Institute of Certified Public Accountants (AICPA) states that
management accounting as practice extends to the following three areas:
Strategic management—advancing the role of the management accountant as a
strategic partner in the organization.
Performance management—developing the practice of business decision-making and
managing the performance of the organization.
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
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 (score keeping) aspects of the profession.
Management accounting knowledge and experience can therefore be obtained from
varied fields and functions within an organization, such as information
management, treasury, efficiency auditing, marketing, valuation, pricing,
logistics, etc.
Read more : http://en.wikipedia.org/wiki/Management_accounting
