What is management Accounting

The process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan, evaluate and control within an entity and to assure appropriate use of and accountability for its resources.

• Costing is the ascertainment of cost
  
• It involves the determination of cost of goods and services and the relationship of these costs to sales and profits
  
• A costing system is used by a business to collect information about costs for planning and decision making

DIFFERENCE BETWEEN MANAGEMENT AND FINANCIAL ACCOUNTING

Management accounting
· Information is used within a business
· No legal requirement
· No requirement to comply with IAS
· focus on specific areas of an organisation’s activities
· Uses predetermined costs, estimates and budgets for decision making
· Focuses on generating forecast & budget information

Financial Accounting
· For both internal and external use
· Often has a legal requirement
· There is the need to comply with IAS
· concentrates on the organization as a whole
· Uses historical data
· Focuses on external reporting

ROLE OF MANAGEMENT ACCOUNTING

• Planning
• Organising
  
• Controlling
  
• Decision Making
  
• Motivation

FEATURES OF USEFUL MANAGEMENT ACCOUNTING INFORMATION

• Relevant for decision making
  
• Complete for its purpose.
  
• Should be sufficiently accurate for its purpose.
  
• It should be clear to the manager using it.
  
• It should be timely.
  
• It should be provided at a cost which is less than the value of the benefits it provides