Managerial Accounting

Published: 2020-05-06 09:29:18
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Category: Accounting

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This case study will discuss how managerial accounting is different from financial accounting (internal versus external uses). Next the case study will cover the different needs and use of financial information in managerial accounting (internal uses). Then this case study will talk about managerial accounting as a profession and its role in today’s business environment and how it has changed over time. Lastly, the case study will discuss Certified Management Accountant designation.
Managerial accounting is concerned with getting information to the organization itself such as the managers so that they can better direct operations for gain and profit . Managerial accounting is different from financial accounting, which is concerned with providing information to stockholders, creditors and others who are outside an organization . Managerial accounting informs management of the information on the cost of the products and services the organization provides. The managerial accountant also budgets and reviews the performance reports.
The performance reports get analyzed and the comparisons are given to management in order for them to better plan and control in order to have higher profits . Each employee of an organization uses internal accounting information. From basic laborer to the chief executive officer or president, they are all paid, and those paychecks are given based off the accounting information or managerial accounting . However, the amount of knowledge and use of managerial accounting by each employee varies considerably .
Each organization has specific goals and objectives. Most have a mission statement which states their goals. The goals vary among organizations ranging from not-for-profit organizations, where goals are aimed at serving specified constituents, to for-profit organizations, where goals are directed toward maximizing the owners’ objectives . Managerial Accounting has changed considerably over the past forty years. Times have changed and to get correct information to make profits, managerial accounting changed.
The last decades new managerial accounting practices such as activity-based-costing, the balanced scorecard and bottleneck accounting were developed: Unlike traditional managerial accounting, activity-based-costing deemphasizes direct labor or raw material as cost drivers and concentrates instead on activities (e. g. the number of production runs per month) that drive costs. Activity-based costing gives the management of an organization a clear picture of the cost drivers and the opportunities to reduce costs” . What is a CMA designation?
The CMA designation is a certified Management Accountant. The Certified Management Accountant (CMA) designation is offered by the Institute of Management Accountants (IMA). This is the certification individuals should get if they are in the management accounting profession. While you don’t have to become a CMA to work as a management accountant, more than 30,000 people have chosen to do so since the program’s inception in 1972, and you might want to as well . Having a CMA designation or certification will give individuals in the management accounting profession an advantage in the job market.
This case study discussed how managerial accounting is different from financial accounting (internal versus external uses). Next the case study covered the different needs and use of financial information in managerial accounting (internal uses). Then this case study talked about managerial accounting as a profession and its role in today’s business environment and how it has changed over time. Lastly, the case study discussed Certified Management Accountant designation.

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