Importance Of Managerial Accounting

Weygandt, Kimmel, & Kieso (2012) mentioned that managerial accounting provides economics and financial information for managers and other internal user. These information are being used in order to reach an organisation 's goals

The purpose of accounting is to use the data or information collected to help someone for example a CEO, a shareholder, a production manager, a sales manager, just to name a few to make decisions. Most of the managers in each organization are knowledgeable in accounting in order to fulfil and perform their duties. For example, the production managers who have a knowledge about accounting is important for decisions to determine the number of volumes, total costs and etc.

Nowadays, managerial accounting is measured as

Another word for managerial accounting is management accounting which means the process of identifying, measuring, analysing, interpreting, and communicating information in pursuit of an organisation 's goals (ezinearticles.com, 2006).

Kulangara (2014) mentioned that a manager can start adding value by helping the team by providing guidance and by providing reports to help measure key items of the organization 's performance. It means that by providing a relevant and accurate reports will definitely assist in the decision making process and also displays the impact on the decision they decide.

While organisation refers to a social unit of people that is structured and managed to meet a need or to pursue collective goals (BusinessDictionary.com, 2015).

So that, in other words, to what extent does managerial accounting add value to an organization can refer to on how does by preparing the managerial accounting report can provide an accurate and reliable data that can help manager to organise the organisation entirely and therefore supporting them in the decision making

The basic or fundamental of decision making in managerial accounting is the manager’s responsibility that can be divided into three broad functions which is planning, directing and controlling. Thus, the managerial accounting has five major objectives that can add value to the organization. The objectives are to assist the managers in providing the data and information for planning in order to setting the objective, preparation of the budgets and hence help in the decision making for their respective department. Once done with the planning, then it will help in directing and controlling the operation activities as well. It can be done by on how the manager coordinate company activities and allocate human resource effectively to smooth the operation. Once the goal and budget has been set, it will lead or motivate the managers and employees passion towards achieving the company goals. Later, it will be much easier to control the activities to make sure it on track. Moreover, the objective of managerial accounting also include the capability to measure the performance by giving a timely feedback and effect of previous decisions by sub-units, activities, managers and other employees within the organisation. Then, managerial accounting also help to evaluate company’s position to ensure it competitiveness in the industry in a long term