Management accounting can be viewed as Management concerned with Accounting. Basically, it is the study in order to the management of financial accounting, "accounting in relation to management function". This mention the way accounting function can be arranged again so it can be suitable in the background of management movement. The primary task of management accounting is, to reinvent the whole accounting process so that it may work as operational need of the organization. It provides specific information of accounting of present, past and future and this can be beneficial for basis management process. The financial data are so planned and steadily development that they become a unique tool for management decision.
Unlike financial accounting, which produces annual reports mainly for external stakeholders, management accounting generates monthly or weekly reports for an organization's internal audiences such as department managers and the chief executive officer. These reports show the amount of available cash, sales revenue generated, amount of orders in hand, state of accounts payable and accounts receivable, outstanding debts, raw material and inventory, and may also include trend charts, variance analysis, and other statistics. Also called managerial accounting. Management accounting is a profession that involves partnering in management decision making, devising planning and performance management systems, and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization's strategy". (T.D. Warfield, 2009)
The subject of management accounting also encompasses the subject of law, knowledge
of which is necessary to find out if the management action is required or not. Management accounting has no set principles such as the double entry system of bookkeeping. In place of generally accepted accounting principles, the philosophy of cost benefit analysis is the core guide of this discipline. It says that no accounting system is good or bad,, but is can be considered desirable so long as it brings incremental benefits in excess of its incremental costs. Applying management accounting principles to financial matters can arrive at no single perfect solution. It is, therefore, an inexact science, which uses its own conventions rather than standardized principles. The facts to be studied here can be interpreted in different ways and the precision of the inferences depends upon the skill, judgment and common sense of different management accountants. It occupies a middle position between a fully matured and an infant subject. Since management accounting is managerially oriented, its data is selective in nature. It focuses on potential opportunities rather than opportunities lost.
The data is operative in nature catering to the operational needs...