MANAGEMENT

ACCOUNTING
1. BASIC MANAGEMENT FUNCTIONS AND
CONCEPTS
2. DISTINCTION AMONG MANAGEMENT
ACCOUNTING, COST ACCOUNTING AND
FINANCIAL ACCOUNTING
3. ROLE AND ACTIVITIES OF
CONTROLLER AND TREASURER
4. INTERNATIONAL CERTIFICATIONS IN
MANAGEMENT ACCOUNTING
5. PROFESSIONAL ETHICS AND CODE OF
CONDUCT FOR MANAGEMENT
ACCOUNTANTS
INTRODUCTION TO MANAGEMENT
ACCOUNTING
MANAGEMENT
ACCOUNTING
A field of accounting that provides

economic and financial information for
internal users, particularly the
managers or decision-makers in an
organization
 MANAGEMENT
ACCOUNTING
 Involves the application of appropriate
techniques and concepts to economic
data so as to assist management in
establishing plans for reasonable
economic objectives an din the making
of rational decisions with a view toward
achieving these objectives.
 MANAGEMENT
ACCOUNTING
 It is the process of identification,
measurement, accumulation, analysis,
preparation, interpretation and
communication of financial information,
which is used by management to plan,
evaluate, and control activities within an
organization.
 MANAGEMENT
ACCOUNTING
 It also comprises the preparation of
financial reports for nonmanagement
groups such as shareholders, creditors,
regulatory agencies and tax authorities.
OBJECTIVE OF MANAGEMENT
ACCOUNTING

 To provide information to managers and

people inside an organization who directs
and control the operations.
 To provide variety of reports
 To assure that organization operates as a
unified whole in its long-run, intermediate
and short-run best interest.
MANAGEMENT
FUNCTIONS
Planning - identifying alternatives and selecting a
1.
course of action and specifying how the action will
be implemented to further organization’s
objectives.
 Setting of immediate and long-range goals for the
organization
 Predicting future condition that are expected to
prevail
 Considering the different means or strategies by
which the goals set may be achieved; and
 Deciding which of the strategies should be used to
attain such goals
MANAGEMENT
FUNCTIONS
2. Controlling – involves checking the
performance of activities against the
plan set and deciding what corrective
action to take
• Evaluation should be made to managers
and the operations for which they are
responsible.
DIRECTING AND
MOTIVATING
3. Directing and motivating – involves
overseeing the day-to-day activities,
seeing to it that organization is
functioning smoothly and the members
of the organization are mobilized to
carry out plans
 Decisions are made to reward or punish
managers, and decisions are made to
change operations or revise plans.
 FINANCIAL ACCOUNTING
VS
MANAGEMENT ACCOUNTING
FINANCIAL ACCOUNTING
• Systematic recording of business transactions,
governed by a body of international financial reporting
standards (IFRS) leading to the preparation of financial
statements for the use of various interested parties,
internal as well as external
MANAGEMENT ACCOUNTING
• Concerned with providing financial information to
persons within the organization to enable them to make
informed judgements and effective decisions which
further the organization’s goals
 COST ACCOUNTING
VS
MANAGEMENT ACCOUNTING
COST ACCOUNTING
• Set of procedures for recording and
reporting measurements of the cost of a
manufacturing goods and performance
services in the aggregate and in detail
MANAGEMENT ACCOUNTING
• Purpose is to provide managers with
information which aids decisions.
• No general standards in reporting
 FINANCIAL ACCTG VS MANAGEMENT ACCTG
 Reports to various interested parties
 Emphasis is on summaries of financial
consequences of past activities
 Objectivity and verifiability of data are
emphasized
 Precision of information is required
 Only summarized data for the entire
organization are prepared
 Must follow IFRS
 Mandatory for external reports
 Reports to managers within the organization
for planning, directing and motivating,
controlling, performance evaluation.
 Emphasis is on future-oriented data needed in
decision-making
 Relevance is emphasized
 Timeliness of information is required
 Detailed segment reports about departments,
products, customers, and employees are
prepared
 Need not to follow IFRS
 Not mandatory
ACTIVITIES OF
MANAGEMENT ACCOUNTING
1. Planning
ACTIVITIES OF
MANAGEMENT ACCOUNTING
1. Planning
2. Reporting
ACTIVITIES OF
MANAGEMENT ACCOUNTING
1. Planning
2. Reporting
3. Controlling
ACTIVITIES OF
MANAGEMENT ACCOUNTING
1. Planning
2. Reporting
3. Controlling
4. Resource management
ACTIVITIES OF
MANAGEMENT ACCOUNTING
1. Planning
2. Reporting
3. Controlling
4. Resource management
5. Information systems development
ACTIVITIES OF
MANAGEMENT ACCOUNTING
1. Planning
2. Reporting
3. Controlling
4. Resource management
5. Information systems development
6. Technological implementation
ACTIVITIES OF
MANAGEMENT ACCOUNTING
1. Planning
2. Reporting
3. Controlling
4. Resource management
5. Information systems development
6. Technological implementation
7. Verification
ACTIVITIES OF
MANAGEMENT ACCOUNTING
1. Planning
2. Reporting
3. Controlling
4. Resource management
5. Information systems development
6. Technological implementation
7. Verification
8. Administration
 CONTROLLER TREASURER

1. Planning for control 1. Provision of capital

2. Reporting and interpreting 2. Investor relations
3. Evaluating and consulting 3. Short-term financing
4. Tax administration 4. Banking and custody CONTROL
Government reporting
LER
5. 5. Credit and collections
6. Protection of assets 6. Investments
7. Economic appraisal 7. Insurance VS
TREASUR
ER
 INTERNATION
AL
CERTIFICATIO
NS
 Certified Management Accountant
 Certified Public Accountant
 Certified Internal Auditor
 Economics, Finance and Management
 Financial Accounting and Reporting
 Management Reporting, Analysis and Behavioral Issues
 Decision Analysis and Information Systems
 Economics, Finance and Management
 Financial Accounting and Reporting
 Management Reporting, Analysis and Behavioral Issues
 Decision Analysis and Information Systems
STANDARDS OF ETHICAL
CONDUCT FOR
MANAGEMENT
ACCOUNTANTS
1.

Competence
Maintain an appropriate level of professional expertise by continually
developing knowledge and skills
 Perform their professional duties in accordance with relevant laws,
regulations and technical standards
 Provide decision support information and recommendations that are accurate,
clear, concise and timely
 Recognize and communicate professional limitations or other constraints that
would preclude responsible judgment or successful performance of an activity
STANDARDS OF ETHICAL
CONDUCT FOR
MANAGEMENT
ACCOUNTANTS
2.

Confidentiality
Keep information confidential except when disclosure is authorized or legally
required
 Inform all relevant parties regarding appropriate use of confidential
information. Monitor subordinate’s activities to ensure compliance
 Refrain from using confidential information for unethical or illegal advantage
STANDARDS OF ETHICAL
CONDUCT FOR
MANAGEMENT
ACCOUNTANTS
3.

Integrity
Mitigate actual conflicts of interest. Regularly communicate with business
associates to avoid apparent conflicts of interest. Advise all parties of any
potential conflicts
 Refrain from engaging in any conduct that would prejudice carrying out
duties ethically
 Abstain from engaging in or supporting any activity that might discredit the
profession
STANDARDS OF ETHICAL
CONDUCT FOR
MANAGEMENT
ACCOUNTANTS
4.

Credibility
Communicate information fairly and objectively
 Disclose all relevant information that could reasonably be expected to
influence an intended user’s understanding of the reports or recommendations
 Consult your own attorney as to legal obligations and rights concerning the
ethical conflict