Management Accounting Flashcards
Management Accounting
Internal
Aid decision making
Can be in any format
No rules
Financial Accounting
Externally Focused Statutory Requirement Governed by rules and regulations Historic Set format
Management Accounting Uses
Inform decisions and formulate business strategy
Plan long, short and medium operations
Design reward strategies for execs and shareholders
Ensure efficient use of resources
Measure and report financial and non financial performance
CIMA Code Of Ethics
COPPI Confidentiality Objectivity Professional competence and due care Professional behaviour Integrity
Mangement Information Uses
Planning
Control
Decision Making
Planning
Strategic - long term
Managerial - short to medium term
Operational - short term day to day
Control
Once planning has been carried out targets can be set to evaluate;
Variances
Profitability measures
Return measures i.e. return on capital
Characteristics of Good Information
ACCURATE Accurate Complete Cost Beneficial Understandable Relevant Authoritative Timely Easy to use
Strategic Level Information
Will have an impact on the whole organisation
Will be long term
Unstructured
Highly summarised
Managerial Level Information
Medium impact on the business
Will be medium term
Act as the bridge between operation and strategic
Some summarisation
Operational Level Information
Small impact on the organisation
Short term
Highly structured
Full detail
Environmental costing
Can be;
Internal
External
Internal Environmental Costing
Direct costs of compliance
Waste disposal costs
Decommissioning costs on project completion
External Environmental Costs
Indirect costs
Carbon emissions
Usage of energy and water
Social Welfare costs
