Question

Can you define managerial accounting and describe its role in the management process?

Answer 1

Management accounting is the branch of accounting focused on the process of identifying, measuring, analyzing, interpreting, and communicating information to managers for the pursuit of an organization's goals. It  is the process of preparing management reports and accounts that provide accurate and timely financial and statistical information to managers to make short-term and long-term decisions. It identifies, measures, analyzes, interprets, and communicates information to enable an organization to pursue its goals.

Its role in management process are:

• Helping Forecast the Future

• Helping in Make-or-buy Decisions

• Forecasting Cash Flows

• Helping Understand Performance Variances

• Analyzing the Rate of Return