SAREST

1. Management
Accounting

2. Development of accounting
In India chanakya in his artha shastra had emphasized the existence and
need of proper accounting and auditing.
• However modern system of accounting owes its origin to pacoili who
lived in Italy in the 15th century.
• The advent of industrial revolution has resulted in large scale
production, cut throat competition and widening of the market. This
has resulted in decentralization of authority and control.
• • Accounting today, therefore cannot be the same as it used to be
about half a century ago. Changes in technology have also brought a
remarkable change in the filed of accounting

3. • Management accounting is the accounting system for making
decisions of the business enterprise. Management accounting
furnishes the necessary information to assist the business
enterprise to make rational decisions through the development
of policies and procedures in order to meet the day to day
commitments of the enterprise.
• According to the Institute of Management Accountants (IMA),
"Management accounting is a profession that involves
partnering in management decision making, devising planning
and performance management systems, and providing
expertise in financial reporting and control to assist
management in the formulation and implementation of an
organization's strategy"

4. Application:
The Association of International Certified Professional Accountants (AICPA) states
management accounting as a practice that extends to the following three areas:
Strategic management — advancing the role of the management accountant as a strategic
partner in the organization.
Performance management — developing the practice of business decision-making and
managing the performance of the organization.
Risk management — contributing to frameworks and practices for identifying, measuring,
managing and reporting risks to the achievement of the objectives of the organization.

5. Role within a corporation
1. Financial accounting –Management accounting is mainly concerned
with the rearrangement of the information provided by financial
accounting.
2.Cost accounting – Many of the techniques of cost control like
standard costing, budgetary control
3. Budgeting and forecasting – This includes framing of budgets.in
order to plan business activities for the future forecasting and
budgeting play a very significant role.
4. Inventory control- Inventory Control denotes raw materials, goods in
the process of manufacture and finished products.

6. 5. Financial Management – Financial management is concerned with the planning
and controlling of the financial resources of the firm. It deals with raising funds and
their effective utilization
6. Reporting to management- One of the functions of management accountant is to
report to the management. The reports are presented in the form of graphs, diagrams
, statistical techniques.
7. Cost control procedures – Any system of management accounting is
incomplete with out effective cost control procedures like inventory
control , labour control,budgetrary control etc

7. 8. Internal Audit – Management accountant heavily depends on internal financial
controls like internal audit and internal check to plug the loop holes in the financial
systems of the concern. Internal audit system is necessary to judge the performance
of different individuals
9. Tax accounting- Tax planning is an important part of management
accounting . Income statements are prepared and liabilities are
calculated. The management is informed about the tax burden from
central, state and local governments. Tax returns are to filed with
different departments.
10. Office services – Management accountant is expected to deal with
data processing. filing. copying ,duplicating, communicating etc

8. Specific methodologies
• Activity-based costing
• Grenzplankostenrechnung (GPK)
• Lean accounting
• Resource consumption accounting
• Standard cost accounting
• Throughput accounting
• Transfer pricing

9. Tasks and services provided
• Listed below are the primary tasks/services performed by management
accountants.
• The degree of complexity relative to these activities are dependent on the
experience level and abilities of any one individual.
• Rate and volume analysis
• Business metrics development
• Price modeling
• Product profitability
• Geographic vs. industry or client segment reporting
• Sales management scorecards

10. • Internal financial presentation and communication
• Sales forecasting
• Financial forecasting
• Annual budgeting
• Cost allocation
•Cost analysis
•Cost–benefit analysis
•Cost-volume-profit analysis
•Life cycle cost analysis
•Client profitability analysis
•IT cost transparency