Management accounting is a tool that helps managers make decisions and maximize benefits. It involves the presentation of accounting information to assist with policy creation, day-to-day operations, and performance measurement. The objectives of management accounting are to measure performance, assess risks, allocate resources efficiently, and facilitate planning, control, and decision making. Some key techniques include budgeting, standard costing, decision making, and management information systems. While it is not legally required, management accounting provides important advantages such as increased efficiency, proper planning, and maximized profitability.

1. 19MST15 – FINANCIAL AND
MANAGEMENT ACCOUNTING
M. NANDHAKUMAR
RESEARCH ASSISTANT
ERODE SENGUNTHAR ENGINEERING COLLEGE (AUTONOMOUS)
PERUNDURAI, ERODE

2. MEANING OF MANAGEMENT ACCOUNTING
• The term “Management Accounting” is composed of two words,
“Management” and “Accounting”. Its tools/techniques facilitate
the management of an organization in the process of “Decision
making”.
• It helps to maximize the benefits in Decision Making process,
Policy Formulation, Planning & Budgeting.

3. DEFINITION OF MANAGEMENT ACCOUNTING
• According to American Council on Productivity, “Management
Accounting is the presentation of accounting information in such a way to
assist management in the creation of a policy and in day-to-day operation of
an undertaking”.

4. OBJECTIVE OF MANAGEMENT ACCOUNTING
• Measuring Performance
• Assessing Risks
• Allocating Resources
• E.g: 1. Availability of resources – (Funds/Investments, Manpower, Transport facilities,
Raw material etc.,)
2. Manufacturing time
3. Selling price of the product and
4. Demand from the market

5. SCOPE OF MANAGEMENT ACCOUNTING
 Financial accounting
 Cost accounting
 Statistical methods
 Operations research

6. ROLE OF MANAGEMENT ACCOUNTING
 Efficient planning
 Increasing efficiency to business operations
 Efficient control
 Increase labour efficiency
 Achieve management efficiency
 Help management function
Communicating

7. FRAMEWORK OF MANAGEMENT ACCOUNTING

8. FUNCTIONS OF MANAGEMENT ACCOUNTING
 Planning
 Organizing
 Coordination
 Controlling performance
 Financial analysis and interpretation
Communication
 Special studies protection of business assets
 Tax policies

9. TOOLS / TECHNIQUES OF MANAGEMENT
ACCOUNTING
 Financial policy and accounting
 Analysis of financial statements
 Historical cost accounting
 Budgetary control
 Standard costing
 Marginal costing
 Decision accounting
 Revaluation accounting Replacement Accounting
 Control accounting
 Management information system
 Working capital management

10. IMPORTANCE/ADVANTAGES OF MANAGEMENT
ACCOUNTING
 Increasing efficiency
 Proper planning
 Measuring of performance
Maximizing profitability
 Improves service to customers

11. DISADVANTAGES OF MANAGEMENT
ACCOUNTING
 Based on accounting information
 Lack of knowledge
 Intuitive decisions
 Do not provide alternative to administration
 Evolutionary stage

12. D/B FINANCIALACCOUNTING AND MANAGEMENT
ACCOUNTING
BASIS OF
DIFFERENCE
 Deals
 Covers
 Assist
 Reporting areas
 Time period
 Legal compulsion
FINANCIAL
ACCOUNTING
 FA deals with money/cash
 It prepares the Trading and P & l A/c and
Balance sheet.
 It assist the business in the financial aspects.
 FA specifies the situation of the total business by
preparing the final accounts.
 It focus on past and present operations.
 It compulsory for all the company’s due to legal
provisions.
MANAGEMENT
ACCOUNTING
 It deals with all circumstances such as
monetary as well as non-monetary.
 It covers the accounting information on cost
accounting, financial accounting and other
facts of financial accounting.
 It assist the management performance
evaluation.
 MA may augment the value of cost
accountings by letting it focus on various
sections of the business.
 It focus on future operations and profitability.
 There is no legal obligation regarding use of
management accounting.

13. D/B MANAGEMENT, COST AND FINANCIAL
ACCOUNTING
BASIS OF
DIFFERENCE
 Orientation
 Scope
 Analysis of
Performance
 Time period
 Legal compulsion
FINANCIAL
ACCOUNTING
 It concerned with economic affairs
from the management angle,
irrespective of the fact.
 It covers the accounting information
system which includes financial, cost
and in addition to other facts of FA. It
facilitates the taking decision making
and evaluation of its performance.
 It various dept. and submit reports
regarding the performance to the
profitability.
 Its futuristic in nature. It plays more
attention on future operations.
 It view of facilitating the management
in discharging some of its basic
functions. E.g decision making,
budgetary control.
COST ACCOUNTING
 It concerned with money measure of
commercial activities of an business
 It includes the economic
performance of various cost centres.
It appropriate data for the
measurement of the economic
performance.
 It focus on collection, classification
and analysis of cost data.
 It concerned with the data pertaining
past and current operation
 Maintenance of records pertaining
to the costing is also not compulsory
under the law
MANAGEMENT
ACCOUNTING
 It concerned with funds as an
economic resources.
 It deals with financial aspect of a
business entity. It is done by
preparing Trading and P & L A/C
for a specific time period and
balance sheet of a business org.
 It focus on recording, classification,
summarizing and analysis of
financial data.
 It focus on past and present
operations.
 It compulsory for all the companies
due to legal provison.

15. THANK U CHILDREN’S