Question

how does managerial accounting assist managers with their responsibilities to the companies stakeholders

Answer 1

Answer

Management accounting is that branch of accounting which analysis data provided by financial and cost accounting regarding business costs and operations so as to prepare internal reports and records to help managers’ in decision making process.

Stakeholders’ of a company are those parties having interest in business operations, profitability and growth. These are investors, shareholders, employees, government, suppliers, banks and financial institutions and customers.

Managerial accounting by providing information to managers assist and facilitate them in taking prudent decisions and managing resources available at company’s disposal with effectiveness. It also considers regular evaluation of company’s operations, so as to take corrective actions on time. All these issues are of utmost importance to meet responsibilities towards stakeholders of the company.

For example: Some of the examples depicting fulfilment of manager’s responsibilities for stakeholders’:

- Payments to suppliers on time.

- Providing appropriate return on investment to investors”.

- Timely repayment to creditors.

- Constructing secure working environment.

-Timely payment of taxes applicable to the government.

- Providing safe and defect free products to the customers.