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 wayas 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
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.
K.A.Fareed (Fareed Siddiqui)
Writer, Trainer, Author, Vba/Vb Developer
BBA; MBA-Finance; M.Phil-Financial Management; (PhD-Management)
Individual Member of Institute of Management Consultants of India
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