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History of Management Accounting

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Introduction

ACFI1201 Management Accounting Assignment one Student Name: Kamran Qureshi ID NO: P05290571 Tutor name: Dr Victoria Yun ZHOU CONTENT Introduction 3 History of Management Accounting 3 Functions of Management 4 Importance of decision making 5 Conclusion 6 Bibliography 7 Management Accounting Assignment one Introduction In this coursework, I have chosen BMW Company. "Management Accounting is a long established and vital element to aid management in their functions within organisations". I will discuss this statement referring to my chosen organisation. I will also identify the history of management accounting and review the functions of management. I will illustrate this discussion by providing some numerical examples. In order to do this, I will need to use all the sources available such as texts, journal and websites. However most importantly, I will highlight what makes a good decision and how does management accounting enables the managers to make an efficient decision. Management accounting is defined as 'the production and use of accounting information for internal managerial purpose of analysis, planning, review and control rather than for historical financial record'. This definition is taken out from A-Z Economics and Business studies handbook. History of management accounting In this section, I will outline briefly the history of management accounting and I will also try to give reasons why this has developed. I have obtained some information about sixteenth century cost recording system. ...read more.

Middle

The business partners have equal opportunities in decision making processes. Management accountant also have an authority to appoint any information that is irrelevant to the business decision making process, thus, it is expected to suggest ways to improve the quality of the decision. So here you seen that management accountants in this description are involved in decision making activities and controlling activities. Functions of management Functions of management are highly important in businesses such as in BMW Company. These functions includes such as goal setting, planning, monitoring, organising, motivating, communicating, coordinating and controlling. By using these tools, it enables the businesses to achieve their main objectives. Goal setting is what businesses are hoping to achieve over a period of time. This might include increase profits, reduce costs etc. For example, BMW might decide to decrease its cost by 10% at beginning of the next year. They might do this by negotiating prices with the suppliers or by switching to cheaper suppliers. In other hand they might be interested in increasing their cars quality by using expensive materials, thus, it will enables them to gain reputation and makes their model better than other companies. Planning is also essential in the businesses because it determines how a project will be carried out to ensure that the customers are satisfied with the products or services. ...read more.

Conclusion

Before proceeding a decision, BMW might reconsider about alternative decisions making. For example, BMW consider whether they should launch their car this season or next season because this might have seasonal affect on their company. Plus at same time, competitors might also be launching new model, thus, they can affect their sale if competitor product is more attractive. BMW might also need to make decision how much raw material to order or how many employees to recruit. Poor decision can arise from this if they brought too much material than they even need. Thus, this can tight up money within the business and most of all its also wasting space. The qualities of the decisions have to be gathered to see whether the decisions are good or bad. A good decision is a logical one based on the available information and reflecting the preferences of the decision maker. BMW might conduct a survey to find out what sort of car they are looking for, so they can meet their demands. It is also important that decisions are made by consulting other employees because someone else might have better ideas. It also gives others an opportunity to share their ideas, so as a result they know they have value and they are recognised. To conclude this section, it is not always true that good decisions always have good outcome because there might have been drawback that the managers failed to identify. ...read more.

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