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Management Accounting

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Trading activities are a thing of the past! From time immemorial various forms of trade against various formats of currencies have been prevailing all over the world. With introduction of an organised form of trade, financial accounts were maintained. However, these financial accounts are merely ways in which external members would get an idea regarding position of that business unit.

However, that is not enough for a management to determine position of its production unit. Given the difficult lifestyle in present times that is completely associated with technology, a management needs daily updates for proper functioning of a company. To enhance this process, management accounting is the one to check out.

Defining Management Accounting:

Management Accounting is the financial data that is provided to an organisation that would help in discharging their functions in a proper manner and understand financial position of their company in regards to other companies in the same domain. By getting details associated with this, a company can carry on with its operational costs in a better manner.

As one of the most important subjects to study, it is known as management oriented accounting.

Various definitions propounded by experts:

As per Institute of Chartered Accountants of England, management accounting is a form of accounting that helps in increasing efficiency within a business unit.

The Institute of Chartered Accountants of India considers management accounting as a set of procedures and techniques that aid the management process. This is quite like echoing the words of Robert N Anthony.

While T G Rose states that management accounting is concerned with diagnosis and analysis of accounting information that helps in ensuring that management gets a better understanding of the current situation and acts accordingly.

 Specialised Areas:

Since management accounting is gaining importance in recent times, so various subjects come under its purview.

  • Budget and Forecasting
  • Statistical Data
  • Cost Accounting
  • Cost Control Technique
  • Financial Accounting
  • Internal Financial Control
  • Taxation

All these branches have extreme importance in present times!

 

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