Objectives Of Management Accounting

The term, management accounting, itself describes its distinctive quality setting it apart from different fields of accounting. It is the combination of two words, management and accounting that states its importance in assisting management by providing useful information so that the objectives of a business entity may be attained in a desired way.

If it is to be considered in a broader sense, unlike financial accounting which is exclusively concerned with providing the financial information on the basis of the completed business transactions, one of the main objectives of management accounting is to make the information available in such a way

as to facilitate management in effective planning while enabling management to communicate the plans to the entire levels of a business organization. In this way, it is concerned with both present and future of business.

Considering the objective of management accounting in relation to day-to-day operations of a business, it can be said that having a useful and helpful effect, it establishes such effective tools and techniques, such as, budgetary control and standard costs, through which the performance of a business is evaluated effectively and efficiently.

Management accounting is concerned with all the aspects of business, such as, production, sales and distribution and finance, while working in the most constructive terms by developing plans and budgets and allocating the responsibilities for the implementation of plans and budgets accordingly.
While it is focused at all the aspects

of day-to-day business operations, management accounting sets futuristic aims and objectives for a business entity. in doing so, it is not only concerned with identifying what may happen to the business and what will happen to the business but also generates such useful and analytical information with the help of cash forecasts and profit and loss forecasts that facilitates management in the process of decision making and creating effective policies.

Thus, the functions of management accounting in fulfilling the business objectives are not restricted to any particular period of time, rather, it caters for the needs of a business management as and when needed so as to facilitate management in performing all its functions effectively and efficiently.

Written by:
K.A.Fareed (Fareed Siddiqui)
Writer, Trainer, Author, Vba/Vb Developer
BBA; MBA-Finance; M.Phil-Financial Management; (PhD-Management)
MA-English; M.Phil-English
Pursuing CMA-USA
Individual Member of Institute of Management Consultants of India

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Article Written By FAREED SIDDIQUI

I am an Individual Member of Institute of Management Consultants of India. I am a Professional with a high creative capability based on Business, Management, Financial Accounting, Management Accounting, Finance and Management Consulting Field. I impart part time training and development programs. I write professional articles on business & management, business English and Software Engineering.

Last updated on 08-07-2016 353 0

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