What is management accounting?

Management accounting combines accounting, finance and management with leading edge techniques needed to drive successful businesses. It combines technical skills with business management skills.

Management accountants:

l advise managers about the financial implications of projects;

l explain the financial consequences of business decisions;

l formulate business strategy;

l monitor spending and financial control;

l conduct internal business audits;

l explain the impact of the competitive landscape.

 

Source: CIMA website, 2009. http://www.cimaandme.com/#/iscimaforme/whatis/.

 

Discussion points

1 Imagine that you are working as a management accountant in a company that is planning a project to establish a ‘wind farm’ to generate renewable electricity. What kind of work might you contribute to the project?

 

2 Imagine that you are working as a management accountant in a company which is unprofitable because its labour costs are higher than those of its competitors. How might you contribute to improving the profitablility through controlling the labour costs?