Nature of Management Accounting

THE NATURE OF MANAGEMENT ACCOUNTING [SUMMARY]

What is Management Accounting?
Management Accounting is the process within an organization that provides information used by an organization’s managers in planning, implementing and controlling the organization’s activities.
Management Accounting as One Type of Information
Information is a fact, datum, observation, perception or nay other thing that adds to knowledge.
• An organization’s day-to day activities requires a considerable amount of operating information. This information provides the raw materials for the summarized information that is reported in the financial accounting and management accounting processes.
Management Accountants
Those employees of an organization who are responsible for the design and operation of the management accounting system are called management accountants.
Treasurer – responsible for more outward directed tasks such as arranging loans and other external sources of funds.
Steps to become a Certified Management Accountant
• File an application for admission and register for the CMA examination
• Pass all four parts of the CMA examination within a three year period
• Satisfy the experience requirement of two continuous years of professional experience in management and/or financial accounting prior to or within seven years of passing the CMA examination.
• Comply with the standards of ethical conduct for practitioners of management accounting and financial management
CONTRAST BETWEEN MANAGEMENT ACCOUNTING AND FINANCIAL ACCOUNTING
DIFFERENCES
DIMENSION MANAGEMENT ACCOUNTING FINANCIALACCOUNTING
• Necessity Optional Required
• Purpose A means to the end of produce statements for outside users
• Users relatively small group; relatively large group; Known identity mostly unknown
• Underlying structure varies according to use of the information one