This document provides an overview of managerial accounting. It discusses how managerial accounting provides qualitative and quantitative information to internal managers for planning, decision-making, and controlling. It also outlines some key concepts in managerial accounting like just-in-time, total quality management, process reengineering, and theory of constraints. Finally, it discusses professional ethics in accounting and compares financial and managerial accounting.

1. P r e s e n t e d B y :
A mr a n u l H a s a n M d . S a i m
P ro g r a m: R M B A
Managerial Accounting and
The Business Environment
Prepared To:
Md. Musharof Hossain
Lecturer, DBA, IIUC

2. Managerial Accounting:
Managerial accounting is concerned with providing information to managers- that is,
people inside an organization who direct and control its operations.
Objectives of Managerial Accounting:
To provide qualitative and quantitative information management for planning .
To help management in decision making in the case of short and long term
planning.
To play effective role in controlling various techniques of management.
To help management in identifying and solving any problem arises in the business.

3. Concepts and Approaches
Just in time concept (JIT):
A production and inventory control system in which materials are purchased and
produced only as needed to meet actual customer demand.
Benefits of Just In Time System:
1. Funds that were tied in inventories can be used elsewhere.
2. Areas previously used to store inventories are made available for other, more
productive uses.
3. Throughput time is reduced, resulting in greater potential output and quicker
response to customers.
4. Defect rates are reduced, resulting in less waste and greater customer satisfaction.

4. Total Quality Management:
The most popular approach to continuous improvement that focus on serving
customers and systematic problem solving using teams made up of front line workers.
The Plan-Do-Check-Act Cycle:
A systematic approach to continuous
improvement that applies the scientific
method to problem solving.

5. Process Reengineering:
An approach to improvement that involves completely redesigning business process
in order to eliminate unnecessary steps, reduce errors and reduce cost.
Theory of Constraints (TOC):
A constraints is anything that prevent ones from getting more of what he/she want.
TOC is a management approach that emphasis the importance of managing
constraints . The Theory of Constraints maintains that effectively managing the
constraint is a key to success.

6. Professional Ethics in Accounting:
Ethical accounting practice build trust and promote loyal, productive relations with
users of accounting information.
Many companies and professional organizations such as the International Federation
of Accountants (IFAC), have written code of ethics that serve as guides.
IMA Code of Ethics for Management Accounting:
Four broad areas of responsibility-
Maintain a high level of professional competence.
Treat sensitive matters with confidentiality.
Maintain personal integrity.
Be objective in all disclosure.

7.  Report to outsiders- owners,
lenders, tax authorities, regulators.
 Emphasis on summaries of
financial records of past activities.
 Objectivity and verifiability of
data.
 Precision of information.
 Only summarized data for entire
organization.
 Must follow GAAP.
 Mandatory for external reports.
 Reports to insiders- planning,
directing, controlling, performance.
 Emphasis on decisions affecting
the future.
 Relevance is emphasized.
 Timeline of information required.
 Detailed reports about
departments, products, customers
and employees are prepared.
 No need to follow GAAP.
 Not mandatory.
Financial Accounting Managerial Accounting
Comparison of Financial Accounting and Managerial accounting