Question

Managerial Accounting is concerned with providing information to managers so they may make business decisions that satisfy customers while continuously monitoring costs and improving efficiencies. Some reports provide timely updates on key indicators while others investigate problems such as declined profitability.  

Please list a report or activity you learned about in Managerial Accounting which has impacted a company, either positively or negatively. You must include an article or media source to support your discussion. The article must have a publish date within the past 3 months.

Answer 1

Managerial accounting is the practice of identifying, measuring, analyzing, interpreting, and communicating financial information to managers for the pursuit of an organization's goals. It varies from financial accounting because the intended purpose of managerial accounting is to assist users internal to the company in making well-informed business decisions.

Managerial accounting encompasses many facets of accounting aimed at improving the quality of information delivered to management about business operation metrics. Managerial accountants use information relating to the cost and sales revenue of goods and services generated by the company. Cost accounting is a large subset of managerial accounting that specifically focuses on capturing a company's total costs of production by assessing the variable costs of each step of production, as well as fixed costs. It allows businesses to identify and reduce unnecessary spending and maximize profits.

Managerial accounting provides the information needed to fuel the decision-making process. Managerial decisions can be categorized according to three interrelated business processes: planning, directing, and controlling. Correct execution of each of these activities culminates in the creation of business value.

Unlike financial accounting which is designed for external users, managerial accounting is focused on internal managers. Managerial accounting is designed to help managers plan for the future, make decisions for the company, and determine if their plans and decisions were accurate (also called controlling).

Abstract

Professional accountants have to make choices for recognizing, evaluating and classifying financial transactions to ensure the true image of accounting information. In this study we try to avoid the importance of accounting information in the management process through a questionnaire distributed to 75 joint stock companies in the North-East of Romania.

In the first part we approached the literature at the national level, focusing on the changes in the managerial accounting of the economic entities and the way they have achieved a progress or a regress from the fiscal point of view and the alignment with the international accounting standards.

The first role of management (or managerial) accounting was that of costing. But with the globalization and rhythm of decisions being made, management accounting has adapted to new situations by changing the role and increasing utility for management.

INTRODUCTION

The economy of a country is made up of all entities operating on its territory, regardless of the field of activity. Research activity in the field of accounting implies the analysis of the economic-financial activity of an entity or several that have something in common, either size, field of activity, legal form. Studies, research in the field of accounting refer both to financial accounting, ie information provided from financial statements, and to managerial accounting, which provides information from costs, prices, produced quantities, internal production reports to information provided to managers, shareholders or other categories of users who have access to managerial accounting information. Business environment features form business managerial accounting practices. Increasing globalization of markets, international trade, harmonization of financial accounting standards have led to a convergence towards a global set of managerial accounting practices. As developing countries are attractive destinations for foreign investors, it is important to understand how accounting systems work and how to apply these systems. There are relatively few studies on managerial accounting tools in emerging countries, each study bringing a new opportunity to understand the use of these tools correctly (Albu N., Albu C.N., 2012, pp. 2-3).