Management Accounting A Portion Of The Total Information...

1a. Management Accounting is a portion of the total information system in a business or an organization. (p.22) Management accounting as well as other forms of accounting is concerned with the collecting and analysing financial information and then communicating the information to the people in charge of the decision-making. (p.16) Its features are the identification, recording, analysis and reporting of information. Its role is to provide the information to those making decisions, usually the managers of the business. The information gathered will help managers with their decisions. Management Accounting will help managers to take effective decision in four broad areas: developing long term plans and strategies, performance evaluation and control, allocating resources and determining costs and benefits. An example of this is when managers are about to take decisions concerning the allocation of scare economic resources. In this case, the managers want to reduce costs in the business and by using the information from management accounting they will be able to take effective decisions to reduce the costs in the business by allocating their resources in an efficient way. (p.22-25) By using the information from management accounting they will be able to base their decisions on concrete economic information from the business. 1b. The two parts of accounting are Management accounting and Financial accounting. 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