Managerial Accounting for Decision Making Essay

Managerial Accounting for Decision Making - Essay Example Horngren and Sundem, 1990. P- 4’ (MACINTOSH & QUATTRONE. 2010) Management accounting system is a part of the larger control system in the organization used to measure, monitor and motivate the managers and employees in the organization and also to coordinate with the other components of the organization like machine, information, material and technologies etc. For a robust control system it is necessary for the entire control mechanism to support each other, management accounting system can play a great part in coordinating and controlling all the activities in the organization. (MACINTOSH & QUATTRONE. 2010) Management accounting system not only helps in planning and coordinating activities of the organization but also plays a vital role in performance measurement and decision making by providing information for managers to make timely decisions, to be effective and efficient in the execution of the business and to improve overall performance of the organization. ... between financial and management accounting for which one thinks that they both perform the same function like both are used in the reporting purpose and helps managers in analyzing the company’s performance and take action for control. But it’s important to mark the differences and benefits that management accounting can solely provide to the organization. Financial accounting is used at the end of the financial year when auditors come for the audit. They work on the historical data that how company performed during the year and prepare their report for the shareholders confirming company’s accounts give a true and fair view. Management accounting however is used to provide information for managers only on a continuous basis that is it doesn’t wait for the financial year to end. It is forward looking and focuses on information that managers can use to make decisions for the future. Therefore if company has issues and loopholes in the control and informati on systems it can be corrected right on time. Management accounting system in short makes the managers adopt a more forward looking approach for the business. (NEEDLES, POWERS & CROSSON .2010) Part A. 2. Identify from the case study the reasons why Tania thinks that Nosystem Limited should install a management accounting system Analyzing the case given it could be argued that Nosystem needs to install management accounting system. As Tania emphasized that Nosystem is a growing organization now there is a growing need for the planning, control and coordinating activities. By installing management accounting system Nosystem can plan its activities at all levels that is strategic, tactical and operational levels to achieve the ultimate goal and objective of the company mentioned in the mission statement. Further