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BUS630: Managerial Accounting: Final Paper

Final paper on managerial accounting principles and applications.

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    Final 1 Final Paper Robert Baca BUS630 : Managerial Accounting Prof. Anthony Perez October 7 th 2013 Explain the role of managerial accounting within a business, focusing on its application in cost management, budgeting, and quality control. Discuss how managerial accounting techniques contribute to decision - making processes, and highlight the ethical considerations that management accountants must address. Ensure to provide examples from real - world scenarios or your personal experience to support your analysis. Your response should be approximately 1,500 words. Final Paper Introduction Due to varying business characteristics, the managerial accounting techniques applied in each business may differ. For example, a business in the start - up phase may rely heavily upon budgeting and capital investment techniques; whereas, a business in the mature/maintaining phase may rely heavily upon cost management and quality control. Ultimately, the techniques used by management should assist the business in achieving its short - term and long - term goals through effective decision - making. Managerial accounting has an integral part in the business world. The purpose of this paper is to explain the role of managerial accounting. The paper will explain what managerial accounting is along with its role in a business or organization and certain ethical issues or concerns for the management accountant. The paper will also explain the following topics:

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    Final 2  Cost Management Techniques  Costing Methods  Budgeting  Quality Control Definition of Managerial Accounting The accounting sphere can be divided into two parts, financial or external accounting and managerial or management accounting. Management accounting is future - orientated, is dynamic, produces forward looking figures and is meant to be decision and control relevant, should not be too concerned with objectivity and is not generally subject to external regulation (Bromwich, 1988). Managerial accounting is also the branch of accounting that meets the manager’s information needs. Because managerial accounting is designed to assists the firm’s managers in making business decisions, relatively few restrictions are imposed by regulatory bodies and generally accepted accounting principles. Therefore, a manager must define which data are relevant for a particular purpose and which are not ( Schneider, 2012). Managerial accounting can simply be defined as accounting that is concerned with provisions. It uses account information in order to inform managers about best courses of action while analyzing and measuring information in order to pursue to an organization’s goals. Role of Managerial Accounting The managerial accountant has an integral role in the business . The management accountant records, prepares financial statements, generates managerial reports and analyses, and coordinates budgeting efforts. The management accountant is an advisor and has an important role in decision - making (Schneider, 2012). Some of the roles of managerial accounting are:  Internal financial accounting for score keeping

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    Final 3  Figures for control  Decision making and problem - solving roles Activities involving internal financial accounting for scorekeeping help provide figures for routine decision - making. Compiling actual unit and departmental costs for control by comparing them with targets. Some activities include periodic internal accounting reports for internal st ewardship and are subject to internal audit (Bromwich, 1988). Figures for control involve using a detailed database which produces figures on a routine basis but is generally limited to recording past activities using financial accounting conventions. This is the area where most of the problems could persist when it comes to dealing with overhead our real time data. Activities under figures for control include budgets, standard costs, and divisional control, which are used for attention direction, motivation, and performance appraisal (Bromwich, 1988). Decisi on - making and problem solving ro les include strategic management accounting, which helps the organization make long - term plans by using strategy, forecasting and evaluating competitors. Another role is investment appraisal, which includes the appraisal of long - term physical investments and the funding o f accepted projects (Bromwich, 1988). There are many other objectives for managerial accounting. They can be grouped as ( Fotache, Fotache, Busca, Radu, & Ocneau, 2011):  Knowing the costs of the economic entity;  Knowledge of internal operating conditions;  Provision of information becoming more relevant for evaluating certain elements of financial accounting The purpose of managerial accounting for a long time was considered to be, knowing the cost of the economic entity. The role has since evolved and will continue to evolve as time goes on.

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