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How to Compare and contrast financial management wit management accounting and financial accounting?
Management accounting is a field of accounting that analyzes and provides cost information to the internal management for the purposes of planning, controlling and decision making.Management accounting refers to accounting information developed for managers within an organization. CIMA (Chartered Institute of Management Accountants) defines Management accounting as "Management Accounting is the process of identification, measurement, accumulation, analysis, preparation, interpretation, and communication of information that used by management to plan, evaluate, and control within an entity and to assure appropriate use of an accountability for its resources". This is the phase of accounting concerned with providing information to managers for use in planning and controlling operations and in decision making.Managerial accounting is concerned with providing information to managers i.e. people inside an organization who direct and control its operations. In contrast, financial accounting is concerned with providing information to stockholders, creditors, and others who are outside an organization. Managerial accounting provides the essential data with which organizations are actually run. Financial accounting provides the scorecard by which a company's past performance is judged.Because it is manager oriented, any study of managerial accounting must be preceded by some understanding of what managers do, the information managers need, and the general business environment.
What is the relation between accounting theory and accounting practices?
Accounting theory examines practical and theoretical issues in accounting practices such as historical costs, decision usefulness, portfolio risk, fair-value-oriented standards and executive management compensation and earnings. In addition, it also discusses economic and political issues and criteria related to accounting practices required by accounting governing bodies such as Canadian Institute of Chartered Accountant (CICA), Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB). The first goal of accounting theory is to describe and explore various theories that underlie financial accounting and reporting. The second goal is to explain and illustrate the relevance of these theories in order to understand the practice of accounting and reporting. Some of the main theories are based on economics and finance. For instance, by discounting future cash flows to present time, the present value model enables a theoretically correct basis of asset and liability valuation and income measurement of a firm. Thus, the present value model provides a benchmark to guide accounting practice. From a finance stand point, portfolio and efficient market theory are used in accounting practices in understanding how investors make rational investment decisions and how they use financial accounting information to make their decisions. Accountants can then prepare financial statements that are of greatest use to investors. To put in a nutshell, accounting theory helps to understand the impact of complex ideas and regulations on financial reporting and the interpretation of information generated by financial reporting at the conceptual level.
Characteristics of Human resource accounting?
Provide cost value information for building appropriate and effective management decisions on the subject of acquiring, allocating, developing and retaining human resources to achieve cost effective organizational objectives Monitor the utilization of human resources by the management successfully Analysis of the human assets Help in the development of management principles and accurate decision making for the future by categorizing financial outcomes of a variety of practices Facilitates evaluation of human resources recording the assessment in the books of financial credit and revelation of the information in the financial statement Helps the organization in decision making in Human Resource Management Is A Management Of An Individual, Human Resource Management Is A Continuous Process , Human Resource Management Is A Dynamic Function, Human Resource Management Is a Universal Function, Human Resource Management Is A Strategic Approach, Integration of Goals, Human Resource Management Is Future-oriented
What are the fundamentals differences between financial and managerial accounting?
Financial accounting gives an overview of the company using generally accepted accounting principles. While used internally, it is also presented to external users such as investors, banks and other creditors. Managerial accounting is designed to facilitate internal operational evaluation and decision-making. It may not use generally accepted methods of presentaion; but, rather, present information in a way that is most useable to various department managers. It tends to be more detail oriented in some ways, but might completely omit information that is not pertinent to the intended user.
Importance of management accounting to a manufacturing firm?
Management accountingAccording 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 Resource (economics) resources. Management accounting also comprises the preparation of financial reports for non-management groups such as shareholders, creditors, regulatory agencies and tax authorities" (CIMA Official Terminology).The Institute of Certified Management Accountants (ICMA), states "A management accountant applies his or her professional knowledge and skill in the preparation and presentation of financial and other decision oriented information in such a way as to assist management in the formulation of policies and in the planning and control of the operation of the undertaking." Management Accountants therefore are seen as the "value-creators" amongst the accountants. They are much more interested in forward looking and taking decisions that will affect the future of the organization, than in the historical recording and compliance (store keeping) aspects of the profession. Management accounting knowledge and experience can therefore be obtained from varied fields and functions within an organization, such as information management, treasury, efficiency auditing, marketing, valuation, pricing, logistics, etc.Significance of management accounting to a manufacturing FirmProviding Information for Decision Making and Planning and Proactively Participating As Part of the Management Team in the Planning ProcessesPlanning is a very essential tool in every manufacturing firm. An entity needs to plan the location of its plants, introduction of new product lines and the strategies required to maintain the assets of the firm. Management accounting assists the firm to make cost-benefit analysis of each alternative and the best decision taken. For example, a soap manufacturing firm before undertaking the manufacture of a new type of soap will collect and analyze data on projected sales volumes, profit margins and costs of inputs. Management accounting provides this data. Any decision taken by the management team in the planning process has an effect on costs, revenues, and management accounting data are essential in estimating those effects. For example, management accountingManagement accounting would enable management to for example, budget for the cost of establishing a new plant and alternatives evaluated for the acquisition of the best plant. Budgets will also include targets to be met in the manufacture of goods. Targets include production volume, sales volume, profit, expenses, pilferage, losses and employee training. These data will be collected, analyzed and summarized for management use in the form of budgets prepared by the management accountant. Management accounting data such as daily sales report is crucial in making decisions as to the number of units to produce.Assisting Managers in Directing and Controlling Operational ActivitiesOperational activities form an integral part of the manufacturing process. The control function enables the operational managers ensure that activities conform to set standards. Detailed reports of various kinds prepared by the management accountant provide feedback as to whether the set standards are being met. Controlling is very essential in inventory control, total quality management and benchmarking in manufacturing firms. A performance report compares budgeted to actual results. In a manufacturing firm performance reports will indicate where some parts of production activities are not proceeding as planned so that corrective measures are instituted to reduce losses. E.g. measures of quality, including internal and external failure rates, yields, and rework can be computed. Measures of productivity efficiency, such as machine availability, throughput and lead times, average inventory levels, and set-up times can be calculated.Motivating Managers and Other Employees toward Organizational GoalsA well motivated staff enhances performance and productivity. Organizations are able to achieve their goals if employees are well motivated. Management accounting through budgeting motivates managers to direct their efforts toward achieving the organizational goals. In a manufacturing firm a budget indicates how resources are to be allocated and what activities are to be emphasized. Employee empowerment is the concept of encouraging and authorizing workers to take the initiative to improve operations, reduce costs, and improve product quality and customer service. For example, employees can be given incentives to develop new products for the organization.Measuring the Performance of Activities, Subunits, Managers, And Other Employees within the OrganizationManagement accounting assists management in measuring the performance of employees in executing organizational objectives. Performance measurement is used as a basis for rewarding performance through positive feedback, promotions and pay rises. Performance measure may be productivity per worker on which compensation may be based. Management accounting also provides data about the performance of the various sub units product lines, geographical units and divisions. These measures are important in determining whether a particular process or subunit (e.g. Quality Control Unit) in the firm is an economic viable unit.Assessing the Organizations Competitive Position and Working with Other Managers to Ensure the Organizations Long Run Competitiveness in the Industry.Globalization has heightened competition and among industries. Management accounting plays a crucial role in ensuring that an organization competes effectively and survives the competition. The financial strength of the organization must be prominent on the agenda of management. Innovative measures must be instituted and operations streamlined. Competitive prices must be adopted by the organization. Data on other competing products must be collected and carefully analyzed before investment decisions are taken. Cost benefit analysis is also important in the adoption of a particular method of production (labour or machines), make or buy decisions, inventory management and outsourcing. Management accounting provides the necessary data for these very essential decisions to be made.ReferencesDrury, C. (2004). Management and Cost Accounting. London: Thompson Learning.Garrison, & Noreen, (2000). Managerial Accounting. New York: Thompson Learning.Hilton, R.W. (1999). Managerial Accounting. New York: Irwin McGraw-Hill.Ingram, et al, (2001). Managerial Accounting: Information for Decisions. Ohio: Thompson Learning.By Kumor Reuben SeyramBachelor of CommerceSchool of BusinessUniversity of Cape Coast, Ghana.
How to Compare and contrast financial management wit management accounting and financial accounting?
Management accounting is a field of accounting that analyzes and provides cost information to the internal management for the purposes of planning, controlling and decision making.Management accounting refers to accounting information developed for managers within an organization. CIMA (Chartered Institute of Management Accountants) defines Management accounting as "Management Accounting is the process of identification, measurement, accumulation, analysis, preparation, interpretation, and communication of information that used by management to plan, evaluate, and control within an entity and to assure appropriate use of an accountability for its resources". This is the phase of accounting concerned with providing information to managers for use in planning and controlling operations and in decision making.Managerial accounting is concerned with providing information to managers i.e. people inside an organization who direct and control its operations. In contrast, financial accounting is concerned with providing information to stockholders, creditors, and others who are outside an organization. Managerial accounting provides the essential data with which organizations are actually run. Financial accounting provides the scorecard by which a company's past performance is judged.Because it is manager oriented, any study of managerial accounting must be preceded by some understanding of what managers do, the information managers need, and the general business environment.
How management information system is people oriented?
Management information system is people oriented in that it focuses on people and technology. This is a study that seeks to establish the relationship between people and services offered through technology.
What has the author David A Taylor written?
David A. Taylor has written: 'Object-oriented technology' -- subject(s): Database design, Object-oriented databases, Development, Computer software 'Object-oriented information systems' -- subject(s): Management information systems, Object-oriented databases, System design
What has the author Robert M Mattison written?
Robert M. Mattison has written: 'The object-oriented enterprise' -- subject(s): Object-oriented databases, Management information systems
Should results-oriented project-management professional be hyphenated?
I believe that it should be, "Results-oriented project management professional."
Where can one find information on project management templates?
Consumers can find information on project management templates on various software programs and business websites. These sites are generally business oriented. Users adjust the templates to their own needs.
What are management systems?
Management reporting systems are the most elaborate of management oriented MIS components. Indeed, some writers call MRS management information systems, the name we reserve for the entire area of information support of operations and management. Its main objective is to provide lower and middle management with printed reports and inquiry capabilities to help maintain operational and management control of enterprise.
Limitations of cost accounting?
Some limitations of cost accounting include: Not capturing all intangible costs and benefits, such as employee morale or brand reputation. Tendency to focus on historical data rather than future-oriented analysis. Can be complex and time-consuming to implement accurately, leading to potential errors or biases in the information provided.
What are management reporting systems?
Management reporting systems are the most elaborate of management oriented MIS components. Indeed, some writers call MRS management information systems, the name we reserve for the entire area of information support of operations and management. Its main objective is to provide lower and middle management with printed reports and inquiry capabilities to help maintain operational and management control of enterprise.
Where can one find information about an object oriented database?
One can find information about an object oriented database in the book 'On Object Oriented Database Systems'. One can also find information about an object oriented database online on the IndiaBix website.
What type of service jobs do you think are created when industries increase?
When industries increase, many service oriented jobs become available such as finance and accounting, legal services, Information and technology services. Other services include facility management services, security service, banking services, human resource services and merchandising services.
What has the author Peter Bruce Bowman written?
Peter Bruce Bowman has written: 'A decision-oriented management information system in a naval shipyard by Peter Bruce Bowman and Roy Irwin Newton' -- subject(s): Management
