Accounting Analysis : Management Accounting

 Financial Accounting is concerned with the past, while Managerial Accounting is concerned with the future.

The accounting information from MAS of WM helps in planning, controlling and other managerial activities. Their system also able to come up all kind of alternatives with integrated accounting information which assist management to find out the best strategy for organizational effectiveness improvement (Wal-Mart homepage 2012). WM disseminate managerial accounting information through budgets for all departments which help all departments to facilitate proper integration in all kind of activities within the company.

Management accounting is for commercial finance, analyzing past performance and projecting future results aiding in the commercial decision-making. This department defines and measures key targets needed to achieve for McDonald’s business strategy to be successful (McDonald’s Corporation, 2008).

“The accounting system generates the information that satisfies two reporting needs that coexist within an organization: financial accounting and managerial accounting” (Schneider, 2012, ch 1.1, para 1). Managerial accounting is the process of preparing reports and accounts required by management to make business decisions for daily, weekly, monthly, and yearly projects. Financial accounting is the branch of accounting that organizes accounting information for presentation to interested parties outside of the organization. Financial accountants produce annual reports for external

 Managerial accounting is defined as the activities carried out in a firm to provide its managers and other employees with financial and related information to help them make strategic, organizational, and operational decisions.

Financial management is important to the organization because it provides pertinent finance and accounting information to help managers accomplish the purpose of the organization. Financial accounting provides accounting information to external users. On the other hand, managerial accounting is more for managers (internal users) to use for things like planning, budgeting, etc. The definition of finance has changed over the years, but it’s used to ultimately evaluate previous decisions and make assessments for future decisions of the organization.

Managerial Accounting reports are primarily used by supervisors, line managers, process owners, as well as executives, to gain a better understanding of the current financial and operational health of the organization. (Internal)

Company operates in the Industrial Sector – Services, and Industry – Regional Airlines. According to the Standard Industrial Classification System (SIC), company belongs to the industry group 451: Air

19 One of the specific purposes of management accounting system is to provide information useful to help the enterprise achieve its goals, objectives, and mission.

3. Managerial Accounting deals with procuring of data for the organisation's management i.e. to serve the internal users with necessary accounting information to carry out the management tasks of planning, organising, actualising and controlling. " Management Accounting is the presentation of accounting Information in such a way as to assist management in creation of policy and in the day to day operations of an undertaking". 4. Financial Management deals with the process adopted by an organisation for taking financial decisions through analysing and interpretation of financial data for meeting the organisations objectives.

The first impression of the course managerial accounting for managers was that it would involve learning how to manage operations of a firm, especially in relation to its financial records and activities to ensure efficient and successful operation of a firm. I expected to learn how to deal with the final financial records and using them to perform an analysis of the records which will help to make informed decisions. It would also involve learning how to deal with the accounting records to make effective budget plans in considerations of resources available. My expectations of the course

A major difference between financial accounting and managerial accounting is their differing uses in regards to present and future data for decision-making. Financial accountants prepare data from transactions that have already occurred and managerial accountants prepare statements in regards to future decision making for their company. According to countingtools.com, the economy is always changing and not everything can be predicted, therefore, managerial accounting could only be useful to a certain degree.

According to Will S, Ray H, & Eric E.N. (2009), management accounting is a branch of accounting that is concerned with providing information to managers who direct and control the firm’s operations. Management directing function seeks to effectively use both the human and raw material wealth of a firm to achieve organizational set objectives on routine basis. Controlling function is the art of tele-guarding the activities of the organization to consistently fall in line with set objectives. Management accounting achieves this function through effective budgeting.

According to the Chartered Institute of Management Accountants (CIMA), Management Accounting is "the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan, evaluate and control within an entity and to assure appropriate use of and accountability for its resources. Management accounting also comprises the preparation of financial reports for non management groups such as shareholders, cr->ors, regulatory agencies and tax authorities" (CIMA Official Terminology)

Management accounting is used to provide managers with information, so they can make informed business decisions. The next category is open-book accounting; this is defined as an accounting principle that aims to improve accounting in organizations. Tax-accounting is defined as the accounting needed to comply with jurisdictional tax regulations. In other words, tax-accounting is used to put tax on goods and services. Accounting has revolved into what every company uses today which is the equation of; Assets=Liabilties+Owners Equity. The meaning of this equation is to show companies what they own and what they owe to there creditors and everybody else.