Management Accounting and the

Business Environment
Management Accounting
 Involvesthe application of appropriate
techniques and concepts to economic
data so as to assist management in
establishing plans for reasonable
economic objectives and the making
of rational decisions with a view
toward achieving these objectives.
Scope of Management Accounting

Scorekeeping or data
accumulation
Interpreting and reporting
of information
Problem-solving
Objectives of Management
Accounting

 Planning, evaluating and

controlling operations
 Safeguarding the
organization’s assets
 Communicating with interested
parties
Management Accounting VS.
Financial Accounting

 As to Objectives:
MA: to provide data for internal
users within the business
organization.
FA: To provide data for both
internal and external users
Management Accounting VS.
Financial Accounting

 Asto compliance with GAAP

MA: reports need not be
presented in conformity w/
GAAP
FA: Should be in accordance
with GAAP
Management Accounting VS.
Financial Accounting

 As to emphasis on the future:

MA: has a strong future
orientation
FA: provides summaries of past
financial transaction.
Management Accounting VS.
Financial Accounting

 As to precision and timeliness:

MA: Timeliness is often more
important than precision.
FA: reports are still useful even
if submitted late.
Management Accounting VS.
Financial Accounting

 As to compliance with law:

MA: this is not mandatory
FA: required by law. BIR, SEC
and other governmental
entities.
Controllership

 Isthe practice of the established

science of control which the is the
process by which management
assures itself that the resources
are procured and utilized
according to plans in order to
achieve the company’s objectives.
Controller

 Chief accounting executive of

an organization
 Comptroller