Management accounting is theidentification, analysis, reporting and presentation of financial informationinternally used by management to plan, decide and control. The purpose ofmanagement accounting in an organization is to support competitive decisionmaking by gathering, processing, and communicating information that helpsbusiness processes plan, control, and evaluate business processes and corporatestrategies. Managementaccounting is not going to end. Also it is the tool to help the objective ofthe organizations. It is the term used to describe methods,systems and accounting techniques that, together with special knowledge andcapacity, and its task of maximizing or minimizing losses. The managementreport is designed to provide useful information and reports to internal users,such as managers and entrepreneurs, who can monitor and plan their businessactivities.Earlier time the organization move in to different type ofbusinesses.
That are manufacturing organization and Service provided business. Earlierthe use labor hours to calculate the costs. They have very little amount ofindirect cost. Indirect cost mean whatever the cost which are not directly relatedto the main operation.
During this period, many companies have focused on the cost-relatedexpenditure assessment and the total cost allocation. Some accounting methodsthat were developed for cost estimation were the first (LIFO) and the first one(FIFO).The need for cost accounting came about as a result of theindustrial production in the nineteenth century as corporations made greatinvestments in factories, natural resources and equipment. In thatperiod, managerial accounting was mainly accounting for expenses.
When considerabout the Evolution of Management Accounting Practice, Prior to the matchingconcept of Accounting for Processes From 1812 – 1920:. Focus on operating costand efficiency of processes. In 1920- 1950 The Matching concept has been developed on the cost accounting. Focus oncosts and financial control. From1951 to 1980 Focus was moved to provide management planning and control ManagerialAccounting. In the 1980s, Focusmoved to waste management, JTT, team work, ABC, targeted pricing, quality,investment and product life cycle management. 1990’s: Focus shifted to include the creation ofcustomer value, strategy, balanced scorecards, EVA, and other related concepts(Value Based Management).
When considering the development of managementreporting practices before 1812-1920, Procedural Accounting Concept: Focus onthe efficiency of operational costs and processes. 1920 – 1950 The correspondingconcept has been developed on the cost accounting. Focus on costs and financialcontrol. From 1951 to 1980 Focus was moved to provide management planning andcontrol information. In the 1980s, Focus moved to waste management, JTT, teamwork, ABC, targeted pricing, quality, investment and product life cyclemanagement.
In the 1990s, Focus moved the customer’s value, strategy, balancedratings, EVA and other related concepts (cost-based management)Thenature of management accounting has changed over the years. Earlier focus wason management planning and control information. Now, focusing on resourcemanagement. Now the management account is used to create, maintain and maintainthe cost of the stakeholders. Management accounting field is very broad andcovers all areas where management is required.Businessprofessionals involved in management accounting have come a long way since theearly days of management accounting in the 1800s. Today, management accountingprofessionals play a key role in many organizations. There is nothing new inmanaging the accounting over the past 50 years.
By the end of the 20th century,management styles had changed considerably. There are problems, such aslocation or technology speed.Decisionswere made to be done quickly and effectively as a collaborator. Organizations today face multitudeoptions and challenges. They need management accountants to step in and work atany level as part of a team.In the next period, therewill be some way for management accountants to build and improve their ownroles. First, these successful companies focus on sustainable sustainability.
To do this, proper management structures and incentives are needed. Secondly,they should focus on increasing the ownership of companies. Capital gains maybe important, but with business ethics and long-term focus.
Management Theaccount holders can get help by providing strong and ethical analysis of thebusiness information. Third, international management focuses on accounting. Agrowing number of companies face serious challenges facing issues of localknowledge and culture. Etc. Directors play key roles in assessing informationand risks.The future of management accounting is presented in threeways. These are the darkest scene, the fantasy philosophy and the most visiblevision.In thethe dark view, the Management Accountant does not have any power orauthority in the real business, and the executive management will graduallyreduce the functionality of the Writer’s writings.
In theutopian scenario,, accountants will be more familiar with and moresophisticated about corporate organizational features. It will work withcurrent and related information and management changes in organizations.The mostrealistic scenario involves an extrapolation of the present to the future.Accounting It is possible and less or less appropriate.