Management Accounting is concerned with providing information to help management in planning, controlling and directing the functions of an organization.
Scope of management accounting:
1. Budgeting and Forecasting:
Management accounting
information is used to prepare the budgets of the functions of organization and
also used to prepare the forecasted financial statements of organization.
Management accounting
also used in budgetary control system which is performing variance analysis
between actual and budgeted budgets and financial statements.
2.
Inventory Control:
Management accounting
information also used in exercising control over the utilization of raw
materials, processing of work in progress and disposal of finished goods for a
specific period.
3.
Internal Audit:
Management accounting
data is used in performing internal audit in the organization.
4.
Taxation:
Management Accounting
is used in computation corporate tax according to tax laws applicable to the
organization, filling of tax return and payment of applicable tax.
5.
Reporting Financial Information:
Management accounting
information is used in daily, weekly, monthly and yearly reporting of financial
data to the top management of organization for decision making.
6.
Processes and control:
Management accounting
provides information for designing the processes and procedures for the
organization and also provides the controls for those processes and procedures.