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How Managerial Accounting Adds Value to the Organizations

In: Other Topics

Submitted By ezaijad
Words 3231
Pages 13
1.0 ABSTRACT
Managerial Accounting is tools for business decision making. The use of management accounting information is a key for organizational success. This essay will explain on the importance of managerial accounting process in organization to successfully carrying out the day to day as well as long term activities and goals. First, it describes how the evolution and change in managerial accounting. Second, the essay looks at the role of managerial accountants. Third, it explains several function of managerial accounting that tend to contribute the adds value to organization.

2.0 INTRODUCTION

According to the Chartered Institute of Management Accountants ( CIMA ), Management Accounting is defined as the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information for both financial and operating used by management to plan, evaluate and control within an organization and to assure use of and accountability for its resources. The Institute of Management Accountants ( IMA ) defined Management Accounting is a profession that involves partnering in management decision making, devising planning and performance management system and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization’s strategy.
Managerial accounting applies to all types of business such as service, merchandise and manufacturing. It also applies to all forms of business organizations such as proprietorship, partnerships and corporations. Not for profit as well as profit oriented enterprise need managerial accounting. In the past managerial accountants were primarily engaged in cost costing accounting and reporting to management. Recently the role has changed significantly. First as business environment has become more automated, methods to...

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