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.
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).
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/