Introduction to Management Accounting I Flashcards
Who are the 8 users of accounting information?
‘I Like Every Good Person, Creditor And Manager’
- investors
- lenders
- employees
- government
- public
- creditors
- analysts
- management
How does Drury identify management accounting?
‘Management accounting is concerned with the provision of information to people within the organisation to help them make better decisions and improve the efficiency and effectiveness of existing operations’
How do Langfield-Smith, Thorne and Hilton identify management accounting?
‘the processes and techniques that focus on the effective use of organisational resources, to support managers in their tasks of enhancing both customer value and shareholders value’
What is a management accounting system?
An information system that produces the information required by managers to manage resources and create value
What does a management accounting system include?
- Regular estimates of the cost of goods and services
- Information for planning and controlling operations
- Information for measuring performance
How is management accounting information different to financial accounting information?
It is ad-hoc (when necessary) to satisfy manager’s short-term and long-term decision-making needs
What is management accounting oriented towards?
The future
What kind of function are management accounting systems?
A service function (a means to an end; not an end in itself)
What is the focus of management accounting information on?
The needs of the internal managers within the organisation
What is management accounting information influenced by?
- Production and service technologies
- Organisational structure
- Organisational size
- Level of sophistication of computer systems
Who is management accounting information relevant to?
Senior managers through to operational managers
What is management accounting?
The process of identification, measurement, accumulation, analysis, preparation, interpretation and COMMUNICATION of information used by management to plan, evaluate and control with an entity and to assure appropriate use of and accountability for its resources’
What is the first step in the planning and control cycle?
Formulating long-term and short-term plans (Planning)
What is the second step in the planning and control cycle?
Implementing the plans (directing and motivating)
What is the third step in the planning and control cycle?
Measure performance (controlling)
