MANAGEMENT ACCOUNTING: AN OVERVIEW
MANAGEMENT ACCOUNTING - the process of identifying, measuring, accumulating, analyzing, preparing,
interpreting, and communicating information that helps managers fulfill organizational objectives.
MANAGEMENT ACCOUNTANT - a person who provides financial data and advice to a company for use in
the organization and development of its business.
FUNCTIONS/OBJECTIVES OF MANAGEMENT ACCOUNTING:
The basic function of management accounting is to assist management in performing its functions
effectively. The functions of management are planning, organizing, and controlling. It also provides
information that may be used by management for decision-making.
MANAGEMENT FUNCTIONS AND THE NEED FOR MANAGEMENT ACCOUNTING INFORMATION
1. PLANNING - involves:
a. setting of immediate, as well as long-range goals for the organization;
b. predicting future conditions that are expected to prevail;
c. considering the different means or strategies by which the goals set may be achieved; and
d. deciding which of the strategies should be used to attain such goals.
2. DIRECTING AND MOTIVATING -involves overseeing the day-to-day activities, seeing to it that the
organization is functioning smoothly and the members of the organization are mobilized to carry out
plans.
3. CONTROLLING -involves checking the performance of activities against the plan or standards set and
deciding what corrective actions to take should there be any deviation between the actual and
planned/standard performance.
•All of these functions involve decision-making. In performing the decision-making function, managers
need information which is provided by management accountants.
MANAGEMENT ACCOUNTING - the process of identifying, measuring, accumulating, analyzing, preparing,
interpreting, and communicating information that helps managers fulfill organizational objectives.
MANAGEMENT ACCOUNTANT - a person who provides financial data and advice to a company for use in
the organization and development of its business.
FUNCTIONS/OBJECTIVES OF MANAGEMENT ACCOUNTING:
The basic function of management accounting is to assist management in performing its functions
effectively. The functions of management are planning, organizing, and controlling. It also provides
information that may be used by management for decision-making.
MANAGEMENT FUNCTIONS AND THE NEED FOR MANAGEMENT ACCOUNTING INFORMATION
1. PLANNING - involves:
a. setting of immediate, as well as long-range goals for the organization;
b. predicting future conditions that are expected to prevail;
c. considering the different means or strategies by which the goals set may be achieved; and
d. deciding which of the strategies should be used to attain such goals.
2. DIRECTING AND MOTIVATING -involves overseeing the day-to-day activities, seeing to it that the
organization is functioning smoothly and the members of the organization are mobilized to carry out
plans.
3. CONTROLLING -involves checking the performance of activities against the plan or standards set and
deciding what corrective actions to take should there be any deviation between the actual and
planned/standard performance.
•All of these functions involve decision-making. In performing the decision-making function, managers
need information which is provided by management accountants.
