Enron Case

Chapter 15 – The Nature of Management Accounting Summary

Management Accounting

Management accounting is the process within an organization that provides information used by an organization’s managers in planning, implementing and controlling the organization’s activities. This process includes the identification, measurement, accumulation, analysis, preparation, interpretation and communication of the information needed by management to perform its function.

Management accounting provides some of information which is contained in any fact, datum, observation or perception that serves either decision facilitating or decision influencing purposes. In general, management accounting information is summary information.

Management accounting information was set forth in 1875 memorandum by Thomas Sutherland, a British business executive. Meanwhile in North America were developed in the latter half of the 19th century by textile mills and railroads.

The members of an organization who are responsible for the design and operation of the management accounting are called Management Accountants. Management accountants have a professional program that grants the designation of Certified Management Accountants (CMA). CMA program is administered by Institute of Management Accountants (IMA) which publishes two journal: Management Accounting Quarterly and Strategic Finance (formerly called Management Accounting).

Contrast between Management Accounting and Financial Reporting

Twelve important differences between management and financial accounting:

Types of Management Accounting Information and Their Uses

Information in Management Accounting is used for three different purposes:

Measurement Management accounting system focuses on the measurement of full costs.

Full cost accounting measures the resources used in performing some activity. Full cost of producing goods or providing services is the sum of:

1. The cost directly traced to the goods or services called...