Decision Making in Managerial Accounting

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Managerial accountants need to use accounting information in seeing to it that they are able to plan, evaluate the company performance, manage risks and control the business operations in a manner that is deemed beneficial to the business as a whole (Caplan, n. d). This can be achieved through: having high standards of ethics in all situations; employing the techniques of management reports, budgetary control, and analysis of fund flows and financial statements; making prudent capital investment decisions; and maintaining continuous quality control systems. The Definition of Managerial Accounting Managerial accounting which is a synonym for management accounting refers to the provision of accounting information to the managerial accountants of particular organizations which they will in turn utilize in making informed decisions that touch on the business. This allows them to carry out their control and management duties effectively (Gao, 2002). According to Hall (2010), managerial accounting entails a process of identifying, measuring, accumulating, analyzing, preparing, interpreting and communicating information of accounting information by managers with the aim of assuring appropriate use of available resources and accountability. Role of Managerial Accounting and the Management Accountant Subsequent to obtaining the accounting information, managerial accountants will then proceed to use it to plan, evaluate the company performance and also control the business operations. With regards to planning, the managers are required to make decisions concerning the kind of product to introduce into the market, when to introduce the product and where the production should take place. In performance evaluation, individual product lin... ... middle of paper ... ...nancial Accounting, 3(3), 237. Mcphail, K. (2010). Management ethics, contemporary context. European Accounting Review, 19(2), 378-385. Neranda, B. (2012). Personality and moral character traits and acknowledging the principles of management ethics, auditing and accounting ethics. African Journal of Business Management, 6(28), 67-98. Reichelstein, S. (2000). Providing Managerial Incentives: Cash Flows versus Accrual Accounting. Journal of Accounting Research, 38(2), 243. Wallis, L. (2009). Budgetary control. Nursing Standard, 23(25), 64-64. Wang, S. (2010). An Application of Fuzzy Set Theory to the Weighted Average Cost of Capital and Capital Structure Decision. Technology and Investment, 01(04), 248-256. Westgard, J. O. (2013). Perspectives on Quality Control, Risk Management, and Analytical Quality Management. Clinics in Laboratory Medicine, 33(1), 1-14.

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