managerial accounting

The assignment will be discussing the different types of management accounting systems used in various companies. Different companies use different types of management accounting systems to suit their different divergence will also try to understand the importance of the different management accounting systems and how they help in better running and management of the organization in order to achieve company goals and objectives. This will be done by critically analyzing the two journal articles related to the management of accounting systems and techniques and come up with the usefulness I those organizations. Question one: Specific management accounting techniques
The management accounting techniques are the various mean in used by accountants to operate, handle come up with different financial reports, interpret and make decision form those reports. they are ways of making accounting process and general company operation more effective and of high quality. From the case there are different management accounting techniques stated in and outlined. The following are the three management accounting techniques. Total quality management(TQM)
This is a technique to ensure that in any process of accounting, there is the aspect of not only quality but assured quality of information, message, transactions and the output of all the accounting information for better decision making both internally for management decisions and externally for investors decisions (Chong and Rundus, 2004). This technique ensures that for any accounting transition, there is correct figure and narration assigned to if for easy understanding. This is to ensure that all the accounting standards and procedures are following and that all the statutory deductions and factors are followed to the letter in the company’s financial management. This technique is to ensure quality of service and goods delivered by the company to its stakeholders (Watts and Dellaportas , 2014 and Pan and Cao, 2016). Just in time(JIT)
This is the management technique used by most companies to manage the inventory of any sort either raw materials of supply good for either wholesale or retail. the main aim of this accounting technique is to increase efficiency in the management of the company. This is done by reducing cost of inventory when it comes to storage and obsolete of the inventory for overstaying in the store and overtaken by technology. The technique has been captured in the case for cost reduction management of the company. Companies with large amount of inventories should employ this method because it will help in reducing the storage costs, spoilage costs, and save of space foe storage purposes. the JIT insists on purchasing something if it is needed but not for storing, therefore it is a technique for buy and use or resale not buy and store. The techniques are essential when making decision on what is urgent to be purchase first and what can wait in the presence of strained finances (Watts and Dellaportas , 2014 and Otley, 2016). Activity base costing
This is the accounting techniques for management to ensure that each and every cost in the company is accounted for and cleared known by the activities in which the cost is used or will be applied. All the costs are assigned to activities they are associated with and in each activity each cost linked to each service and product is categorized in order as opposed to the traditional methods whereby costa are randomly associated with an activities and products and services (Innes et al., 2000). The costs are allocated according to the number of activities associated with a given product or service and the technicality of the activity, the more the number of activities related to a given product or service, the higher the cost and vice versa. this technique allows the management to ensure that costs are fairly distributed to all activities of the organization for cost effective and better resource management (Watts and Dellaportas , 2014). Question two:
The Management accounting system are not such important when it comes to management of contemporary organizations. All organization operates in the changing environment and therefore there is need to adopt accounting systems that simplifies work and makes it easy to come up with financial statements for decision making and improve service or product delivery but not all organization carry on a business of similar nature. each and every company has its own processes and services. The modern management accounting is not important to an organization and they are short-lived and tech to change. i. Evidence that Management accounting systems are importance to management of contemporary organizations
The activity based costing, total quality management, just in time and other managerial accounting are theoretically meant to is helps the company to manage its costs and quality issues for decision making by relying on this accounting system to manage the organization is of help (Schaltegger and Burritt, 2017). The operation managerial level position more depends on the outputs of the management accounting system information to make decisions; other information is much important when it comes to managing a company. Other information from external partners and stakeholder are also important when making the decision but more importantly for lower level managerial who make daily decisions. Other information from external partners and stakeholder like customers and suppliers are also important when making the decision. for Company –A lower management level solely depends on the output of management accounting information system to made operational decisions. therefore, at Company-A all operational decisions are made in relation to the information received from the management accounting is at this point operational managers know how to allocate expenses and ensure quality and reduce costs when it comes to just in time, TQM and ABC techniques (Morden, 2016 and Harrison and Lock, 2017)
When it comes to tactical decision of the company, management accounting information is very vital but should be used alongside other external information like customer vies and these level for any decision to be made, key performance indicators should be considered and these key performance indicators are derived from the management account ting system Company-A tactical manager do use both external and management accounting system outputs to make decisions, therefore as a reference point for other companies, management accounting information system are important in making tactical decisions of the company and managing the company needs tactical decision and plans for it to be competitive and successful.
At top management level where strategic decisions of the company are made do get information from external and management accounting systems but they mostly rely on the macro-economics and micro-economics. despite the decline in the relevance of the management accounting system information, they remain important because at Company-A, the middle managers do get information from management accounting system and simplify for top and therefore even strategic decisions do incorporate the management accounting systems outputs. (Morden, 2016 and Harrison and Lock, 2017)
The managing director of Company-A acknowledges the importance of the management accounting system but insist that they should be modified to fit the company needs and operations in terms of functionalities. Therefore, TQM, ABC and JIT and other accounting techniques should be modified in functionalities to suit the company specifications and type of services and products involved (Bouwens and Abernethy, 2000).
Therefore, management account systems are vital in the management of the contemporary companies and they rely very important information as outputs which are used to make management decisions in all levels of management but the top level also use external information when coming up with strategic decision but they do include the management accounting system output information. ii. Comparing and contrasting the articles and their findings
The Multinational Manufacturing Company-A article discussed about the newly modern management accounting systems and their relevant in the management of companies while the Nepalese Commercial Banks case article discussed about the effects of management accounting systems.
Both cases are all about the management accounting system but The Multinational Manufacturing Company-A used JIT, TQM, ABC and BSC as management accounting systems while the Nepalese Commercial Banks case article used management accounting system controlling and reporting, planning and budgeting, decision making, costing systems and performance evaluation system. There numerous management accounting systems the copay opt to use depending on what they company want to achieve as a company for applying the (Gnawali, A., 2017 and Watts and Dellaportas , 2014).selected management accounting systems.
The articles are from different sectors, the first article Company-A case is a manufacturer company and sector while the second article of Nepalese Commercial Banks is a service company under banking industry. This is an indication that management accounting systems is applicable in all sectors regardless of the size and the industry, management accounting systems should be adopted for better management of the company. The finding is the same even if they used different management accounting systems. The firs article indicated that management accounting system are vital when it comes to making decisions and its finding was that all management level sues the management accounting systems information to make operations, technical and strategic decision or plans and the second article indicated that management accounting systems are essential when it comes to planning and the accountant should ensure the company has right combination of management accounting systems for better planning on different activities of the company for better performance. Therefore, from the above finding do indicate that management accounting systems are vital tools for planning because of their outputs (Gnawali, A., 2017 and Watts and Dellaportas , 2014).
Management accounting systems are important in management of the companies that is according the article one which show Company-A depended on the information from the management accounting systems to make decisions on how the company should be run and this will involve the forecasting the future performance of the company and the finding of the second company is that management accounting systems are meant to improve the performance of the company and this will be achieved by using planning and forecasting and the measuring the actual result with the forecasted one. (Gnawali, A., 2017 and Watts and Dellaportas , 2014)
Each and every company should use different management accounting systems and modify the functionalities to achieve the desired goals, management accounted systems are used in order to have better result and improve the quality, have cost effectiveness and for planning purposes. (Gnawali, A., 2017 and Watts and Dellaportas , 2014)
Therefore, from the above finding, regardless of the type of management accounting system used, they all serve similar purpose in any organization of smooth running and management of the entire company capital and human resources for better performance (Gnawali, A., 2017 and Watts and Dellaportas , 2014)
Question three: My conclusion on the relevance of the management accounting system