Management Accounting System for Managing Value - MyAssignmenthelp

Question: Discuss about theManagement Accounting System for Managing Value. Answer: Management accounting system is the system used by the management used obtained the relevant information in relation to organization financial and economic factors which helps them to perform efficiently and effectively (Weygandt, Kimmel and Kieso, 2015). There are many processes and techniques which are used by management accountant to provide the information required by internal mangers on consistent basis. Some of the processes and techniques are describe below: Techniques: Financial Arrangement It is the planning required for finance function in an organization which is the back bone of its working and existence. Efficient utilization of funds in order to meet the obligation in time is financial arrangements by maintaining the balance between inflow and outflow of funds. Analysis of data Analysis of the data to provide the logical and reliable results at by using different scientific methods. Statistical analysis is most important in management accounting which helps in choosing proper sample rather than using whole population and to draw required conclusions. Cost Management Method- It an essential element of management accounting system which used by management accountant which involves analyzing the financial performance of the organization by classifying, identifying, recording and interpreting the cost records. This method is used by internal manager to find the how the cost can be reduced and what can be cost control methods (Smith, Thorne, Smith and Hilton, 2015). Variable Costing In this technique only the marginal cost that variable manufacturing cost has been considered for valuing the cost of sales and inventory by the accountant. The information from this technique helps the management to ascertain the variable factors with are considered in cost and are used as internal decision tools (Zimmerman and Yahya-Zadeh, 2011). Processes: Cost Reduction The company shall appoint the cost manager who will match the costing of the product with the costing as defined by the management and will help management to go for cost reduction techniques as defined above. Budget Process and Performance Measurement In this standard target costs are set a bench mark for comparison with actual results by accountant. And the variations between actual and standard are identified and evaluated to provide information to the management for proper controlling and monitoring. It helps in making the system of performance measurement effective. References Smith L, Thorne H, Smith D and Hilton R (2015), Management Accounting: Information for Creating and Managing Value, Mc Graw Hill, 7th Ed, Chapter 2 Weygandt, J. J, Kimmel, P. D., and Kieso, D. E. (2015), Financial Managerial Accounting-John Wiley Sons, p-32-56 Zimmerman, J. L, Yahya-Zadeh, M. (2011), Accounting for decision making and control-Issues in Accounting Education,26(1), 258-259