The role of management accounting and its Characteristics PDF

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Consider the role of management accounting in relation to the company for which you work (or have worked). Discuss how the principles of management accounting can be utilized. What specific managerial accounting activities would be useful?

For a small business start-up company like our’s, in general, we have very few personnels. Considering myself as a Managerial Accountant for the same gives me satisfaction about what I am doing till now. The main functionality of this role is to analyze financial information of the company and improve the capability of projecting the business performance. Unlike the financial statements, namely the income statement, the balance statement and the cash flow statement, the reports generated by the management accounting such as budget reports, inventory and manufacturing reports are used inside the organization for future planning say for example, in adding a new segment of product in the business or establishing a new geographical sector. According to Larry and Christopher planning, directing and controlling are the three corresponding working procedures which characterize the managerial decisions. (Managerial and Cost Accounting, 2009, p.11. Retrieved from https://my.uopeople.edu/pluginfile.php/923290/mod_resource/content/3/managerialand-cost-accounting-compressed.pdf) Planning refers to developing strategies to place the company in a better position for which the budget component such as operational budget, capital budget and financial budget has to be planned. There may be more than one plan to achieve our goal. In an organization where there are a handful of departments and numerous employees, working together towards the success of the organization, it is important that their actions implement the same plan. It is the responsibility of the management accounting personnel to direct the actions performed in the company, aiming for the better outcome during the plan implementation. The proper direction in costing, production management and analysis is the next important characteristic related to the planning process. If there is any deviation in the execution of the plan, that is where controlling characteristics of the management accounting plays a major role. In our small business, as a managerial accountant, I plan for working out better logistics in shipment and customs clearance sections. To expand our business the website launched, developed in expanding the range of customers. As the requirements from the customer increases, the sales increases with our ability to supply the demand. Some of the non-financial measures such as percentage of defective products, percentage of products delivered on time are also taken into account in determining each product’s cost. Depending on the demand, we are extending our business in importing more related products.

As a Management Accountant, the characteristics business process we undertake is to plan, direct and analyze. Apart from those main functions, providing cause and effect analysis, achievement of objectives, improving efficiency and forecasting based on the reports generated are also the leading business processes. References: Walther, L.M & Skousen, J. C. (2009). Managerial and Cost Accounting, p.11. https://my.uopeople.edu/pluginfile.php/923290/mod_resource/content/3/managerialand-cost-accounting-compressed.pdf Heisinger, K., & Hoyle, J. B. (n.d.). Accounting for Managers. Chapter 1 – What is Managerial Accounting? https://2012books.lardbucket.org/books/accounting-for-managers/index.html Sushila, R. (n.d.). Management Accounting: Meaning, Nature, Characteristics, Objectives, Tools, Advantages and Limitations. Section 3 - Characteristics of Management Accounting https://www.accountingnotes.net/management-accounting/management-accountingmeaning-nature-characteristics-objectives-tools-advantages-and-limitations/17041

Sullivan, D. Chron, (March 08, 2019). Types of Managerial Accounting Reports. Chron.

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