Management Accounting Purpose

The primary purpose of management accounting is to provide information useful for management decisions (planning or control phase).

Required:

Discuss the statement above and support your opinion/argument with relevant review on the implementation of management accounting practices.

Accounting information is the language used by businesses to communicate with interested parties. Each party has its own information requirements. Access to accounting information differs according to the relationship between the business and the interested party. There are many uses of the accounting information in the organisation. These are some of the users of accounting information with their own purpose;

1) Equity Investors require the information on

Management accountants (also called managerial accountants) look at the events that happen in and around a business while considering the needs of the business. Cost accounting is the process of translating these estimates and data into knowledge that will ultimately be used to guide decision-making. Management accounting involves applying accounting and financial management principles to the provision of information to managers within an organisation to help them plan and control the organisation’s activities and to make business decisions. Management accounting is concerned with providing information to users within the organisation to assist with effective and efficient management of the

Planning involves converting goals and objectives into the specific activities and resources that are required to meet the set goals and objectives. For a plan to come to life, it requires initiation and direction of numerous actions. It needs to be realized into action. Since things rarely go exactly like planned, the management must exercise control to monitor and adjust for deviations. Management accountants add value to their organizations by helping the top management in decision making and planning. Additionally, management accountants participate as an important part in the management team in decision making and processes. Recently, management accountants provide all kind of information to the management, (much of these information is financial information). In addition to their significant role in providing information, management accountants have become an integral part in the management team that they take proactive role players when it comes to strategic business planning and day to day needs to be made decisions. Furthermore, modern management accounting systems are considering more and more the activities that occur in all levels of the