MANAGEMENT ACCOUNTING: NATURE AND SCOPE

 Introduction
 Definition of Management Accounting
 Nature of Management Accounting
 Objective of Management Accounting
 Scope of Management Accounting
 Functions of Management Accounting
 Limitations of Management Accounting
 Difference between Management accounting and
Financial Accounting
 Difference between Management Accounting and Cost
Accounting
 Management Accounting Organization
 Management Accountant
 Functions of Management Accountant
 Management accounting can be viewed as
Management oriented Accounting.
 It shows how the accounting function can be
re-oriented so as to fit it within the
framework of management activity.
 The primary task of Management Accounting
is therefore to redesign the entire accounting
system so as it may serve the operational
needs of the firm.
 Management Accounting refers to the
presentation of accounting information in
such as to assist management to the creation
of policy and the day to day operation of an
undertaking.
 The term “Management Accounting” covers
all those services by which the accounting
department can assist the top management
and other departments in the formation of
policy, execution and control.
 Service Function – it assist management by
providing necessary information related to
accounting.
 More Concerned with Future – it is related to
future decision and are taken by analyzing
accounting information for the future.
 Selective in Nature – it provides selective
information to the management.
 It only supplies data and not a decision
 Integrated system
 To provide selective information to the
management.
 To assist in planning
 To assist in decision-making
 To assist in controlling
 To assist in coordination
 To help in reporting
 Financial Accounting
 Cost Accounting
 Revaluation Accounting
 Budgetary Control
 Inventory Control
 Statistical Methods
 Interim Reporting
 Taxation
 Office Services
 Internal Audit
 Management accounting helps in the
performance of the following functions:
1. Provides data
2. Modifies data
3. Analyzes and interprets data
4. Serves as a means of communicating
5. Facilitates Control
6. Use of quantitative andqualitative information
 Proper Planning
 Effective Controlling
 Increase Efficiency
 Maximizing Profitability
 Performance Appraisal
 Increase Productivity
 Based on Accounting Information or
Accounting Data
 Lack of Knowledge and Understanding
 Lack of Continuity and Coordination
 Very Expensive
 Time Consuming
 Based on Historical Data
 Management Accountant is a person who
assist the management in decision-making
by providing necessary accounting
information.
 The Management Accountant has a very
significant role to perform in the installation,
development and functioning of an efficient
and effective management information
system.
 Important functions of Management
Accountants:
1. Planning
2. Controlling
3. Coordinating
4. Reporting
5. Interpreting
6. Evaluation
7. Advising
8. Other Functions