Management accounting Essay Example | Topics and Well Written Essays - 1000 words - 5

Management accounting - Essay Example It includes a proper comparison of the roles that are performed by management accounting with those that are performed by financial accounting. An appropriate definition of ‘management accounting’ is provided by Institute of Management Accountants. According to this institute, management accounting is the process through which financial information is identified, measured, accumulated, analyzed, prepared, interpreted and communicated to the management who then use these information for the purpose of planning, evaluating and controlling the operations of the firm (Siegel and Shim, Accounting handbook). Management accounting helps in preparing financial reports for various non-management groups like tax authorities and regulatory agencies. In simple words management accounting is such an accounting system that helps an organization and its management to plan, control and make effective decisions. Financial accounting, on the other side, is all about maintenance of record, classification and summarization of financial transactions.