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What is Management Accounting

What is Management Accounting


The core functions of management are planning, forecasting, organizing, directing, coordinating and controlling. So, accounting that helps the management to carry out these functions is called management accounting. In other words, management accounting aids the management in decision-making by analyzing and interpreting the accounting data.

Some important definitions of management accounting by popular management authors

  • “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.” 
  • “According to the Chartered Institute of Management Accountants (CIMA), Management Accounting is “the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan, evaluate and control within an entity and to assure appropriate use of and accountability for its resources.” 
  • Managerial accounting encompasses techniques and processes that are intended to provide financial and non-financial information to people within an organization to make better  decisions and thereby achieve organizational control and enhance organizational effectiveness – Wilson and Wai

In a nutshell, management accounting is accounting (i.e. producing useful information) for management (whoever those managers happen to be and whatever their job titles).

What is management accounting

 

In this sense, ‘accounting’ includes the production of all information useful in running the organization. Hence, such information may be:

• Financial or non-financial;

• Accurate, or broadly correct;

• Actual (certain) or estimated (uncertain);

• Based in the past or the future;

• Detailed, or in a highly aggregated form;

• Presented in any of a variety of spoken or written forms, such as numbers, tables, and graphs;

• Related to profits/losses, costs/incomes, volumes, quality indicators, trends, etc.

What is CIMA: Chartered Institute of Management Accountants. CIMA is the world’s largest professional body of management accountants. They offer the most relevant finance qualification for business.

Web URL: http://www.cimaglobal.com/

Best Management Accounting Books

1. Management Accounting: Principles & Practice by- M.A. Sahaf

2. Real Numbers: Management Accounting in a Lean Organization by- Jean E. Cunningham and Orest Fiume

3. Best Management Accounting: Successful Business – Decision Making & Budgeting by- Deepak Gupta

4. Advanced Management Accounting by- Robert Kaplan and Anthony A. Atkinson

5. Management Accounting (Projects & Budgets): New Manager Series by- Alasdair Gilchrist

6 . Handbook of Management Accounting Research by- Christopher S. Chapman, Anthony G. Hopwood, Michael D. Shields

7. Introduction to Management Accounting by- Charles T. Horngren, Gary L. Sundem, William O. Stratton, Dave Burgstahler, Jeff O. Schatzberg

8. Management Accounting by- Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young

9. Introduction to Management Accounting by- Charles T. Horngren, Gary L. Sundem, Jeff O. Schatzberg, Dave Burgstahler

10. Management Accounting  by- I.C. Jain

Related Posts:

  1. Functions of Management Accounting
  2. Advantages and Limitations of Management Accounting

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