Management accounting uses both cost and financial info to advise management in planning and controlling the organization. Management accounting is used for providing information the organization people.
Management accountants design specific purpose reports to serve needs of decision makers. Because internal decision makers are primarily concerned with impact of their decisions on future performance of the organization, many management accounting reports are future oriented. Past and current activities are reported to the future extent that such information helps management to plan for the Institute of Cost and Management Accountants of U.K. defines management accounting in the following words:
“The application of professional knowledge and skill in the preparation and presentation of accounting information in such a way as to assist management in the formulation of policies and in the planning and control of operations of the undertaking”.
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