Essay On Managerial Accounting

2101 Words5 Pages

Introduction
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. 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 managers of a particular organization which they will in turn utilize in making informed decisions that touch on the business and thus allowing them to carry out their control and management duties effectively (Caplan, 2006). Management accounting is a preserve of chartered management accountants though some companies my use other types of accountants to measure and report information regarding the economic activities of those companies. According to the Chartered Institute of Management Accountant (CIMA), 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.
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 decis...

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... The above ethical standards can be accomplished through the utilization of the managerial accounting techniques of budgetary control, management reports and analyzes of fund flow and financial statements. For any business to maximize on its profits, the management accountants should be able to establish the capital structure of the firm and come up with ways of manipulating the debt/equity and the debt/asset ratios which should be positively related to profitability ratios. Being able cut of costs, increase on revenues and savings during budgeting is a sure way of safeguarding a smooth running of a business. When the quality is good, customers get more satisfaction thus ensuring constant purchases which improves the business revenues. A high quality of products or services is achieved through quality controls that are overseen by management accountants.

References

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Essay On Managerial Accounting

ASDA: The Retail Giant In The World

Debenhams PLC