Management Accountancy : Introduction

Going through some revision notes I made last year for management accountancy on my MSC, I thought it might be useful to publish the revision notes I made, as I found it difficult to find revision material online myself.  I'll be publishing a series of posts from my collection of revision notes and will be interested to see if anyone finds it useful.

Management Accounting/accounts

MA are designed to give an indication of an organisations performance and current financial standing.  MA are designed to be:-

·         Comparable – so that the business can be compared easily to others.

·         Relevant – Only data that is required is included

·         Reliable – The data presented is up to date and more importantly is accurate, as may be used in high level decision making processes

·         Understandable – is in a form that is clear although not at the expense of simplicity (i.e. excluding values/figures as they are complex)

Users of MA are typically :-

·         Customers –As a customer of a company, especially a commercial customer it is useful to find out if an organisation is financially strong and as such service your needs (warranty/supply of long order).

·         Competitors – As a competitor it is useful to look at another organisations MA to give an indication as to how strong (financially) they are as a competitor.