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    Alenne Felizardo
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    Managerial accounting provides information to managers within an organization to aid in planning, controlling, and decision making. It uses financial accounting records as the basis for reports needed for these internal functions. The three primary components of managerial accounting are planning, controlling, and decision making. Various departments like marketing, manufacturing, and human resources utilize managerial accounting concepts. Strategy development in businesses may revolve around customer intimacy, operational excellence, and product leadership. Risk management planning uses controls to reduce risks to planned budgets and processes.

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    Managerial accounting provides information to managers within an organization to aid in planning, controlling, and decision making. It uses financial accounting records as the basis for reports needed for these internal functions. The three primary components of managerial accounting are planning, controlling, and decision making. Various departments like marketing, manufacturing, and human resources utilize managerial accounting concepts. Strategy development in businesses may revolve around customer intimacy, operational excellence, and product leadership. Risk management planning uses controls to reduce risks to planned budgets and processes.

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    7 views11 pages

    AccountingManagers 05

    Uploaded by

    Alenne Felizardo
    Managerial accounting provides information to managers within an organization to aid in planning, controlling, and decision making. It uses financial accounting records as the basis for reports needed for these internal functions. The three primary components of managerial accounting are planning, controlling, and decision making. Various departments like marketing, manufacturing, and human resources utilize managerial accounting concepts. Strategy development in businesses may revolve around customer intimacy, operational excellence, and product leadership. Risk management planning uses controls to reduce risks to planned budgets and processes.

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    of 11

    Accounting for Managers

    Module 5: Managerial Accounting in Business


    Financial and Managerial Accounting
    Differentiating Between Financial and Managerial
    Accounting
    Financial accounting focuses on recording transactions as they occur, and is done for people
    outside of the country.

    Managerial accounting, on the other hand, is to provide information to managers within the
    organization. It is used for planning, controlling, and decision making.
    Managerial Accounting

    3 Primary Components of Managerial Accounting:

    1. Planning
    2. Controlling
    3. Decision Making
    Relationship Between Financial and Managerial Accounting

    • Financial accounting records are the basis for what is used in managerial accounting.
    • Financial and managerial teams need to work together to create the information needed for
    planning, controlling, and decision making within the country.
    • Managerial teams need historical data from the financial teams to prepare their reports.
    Managerial Accounting Perspectives
    Accounting Decision Makers

    Marketing Department Managers


    • Need an understanding of managerial accounting concepts
    Manufacturing Department Managers
    • Managers involved in the day to day manufacturing process
    Human Resources Managers
    • Need to pay extra attention to planning
    Top Management
    • Will generally be more involved with the big picture
    Strategy Development

    • A strategy is a game plan to help a business be successful


    • Business strategy development may revolve around several different components
    • Customer intimacy
    • Operational excellence
    • Product leadership
    Risk Management Planning

    Companies use controls to reduce the risk that what they planned to
    happen during the budgeting and planning processes will not happen.
    Influence on Accounting Decisions

    Ethical, value-based leadership is based on a variety of factors, including loyalty and respect, a
    history of fair dealing and trust among others.

    Values-based leadership is an execution in practice of the philosophy of management. Leaders


    need to encourage employees to embrace the core values of the company.
    Quick Review

    • Financial vs. Managerial Accounting


    • Financial: using internal data for external purposes
    • Managerial: using financial data for internal purposes
    • Components of Managerial Accounting
    • Planning
    • Controlling
    • Decision making
    • Components of Strategy Development
    • Customer intimacy
    • Operational excellence
    • Product leadership

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