Management Accounting is that branch of accounting in which crucial accounting information is provided to managers of the organization to facilitate in sound decision making in order to have rational decision making.
Referring to the Institute of management accounting website under resources and publications section, I am not surprised by the topics of management that have been prioritized. The topics of interest are cost/management accounting techniques Activity based costing (ABC), statistical process control, Target costing, Theory of constraints and Methods of calculating stock options. These topics provide the most relevant information to the management. For instance, ABC costing method will allow the management to include those units of cost related to the output per unit This will allow them evaluate the most costly input consumed in the production of the unit output. It will also assist in optimizing the cost of production which will assist in sound price quotation which dictates the price competitiveness of the product in the market.
The topics offered are a source of progressive knowledge to the management as it is the source of new information. The topics are sincere to the desired performance of the management of any visionary organization; they provide a non-statistic source of management information such as techniques to advance finance and accounting education as well as fresh and accredited theories in finance and accounting.
Looking; the management will forecast the future performance of the company. Such forecast is based on present performance, and such performance is obtained from financial statements. Furthermore, when forecast is made the results are prepared using the financial accounting approach and the results of the forecast and actual performance are compared to have a clear picture of the variances. The two approaches work on a complementary manner and thus they are equally relevant.
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