Management Accounting

Definition Differences FA and MA

According to the Institute of Management FA MA

Accountant(IMA) Primary External user Internal
users users like
- Process of identification, measurement, manager
calculation, analysis, preparation, Types and Financial Internal
interpretation and communication of frequency of statements reports to fit
information used by management to reports covering the needs of
plan, evaluate and control within an required time intended
entity and to ensure appropriate use of period internal
and accountability for its resources users
- Profession that involves partnering in Purpose General Highlights
management decision making devising purpose segment
planning and performance management reporting
systems, and providing expertise in Overriding GAAP/PAS/ Situational
criteria used PFRS relevance
financial reporting and control to assist
Primary Focuses on Focuses on a
management in the formulation and
reporting the company particular
implementation of an organization’s
focus as a whole part
strategy (aggregate)
Behavioral Measurement Influence on
implication of economic managerial
Three pillars of management accounting entity behavior
(1) Planning
Time Historical or Forward
a. Establishing goals orientation past looking or
b. Specifying how to achieve them orientation future
(2) Controlling oriented
a. Gathering feedback to ensure Flexibility of Less flexible More
that the plan is being properly information flexible
executed Recordkeepi Formal Combination
(3) Decision making ng recordkeeping of formal
a. Selecting a course of action and informal
from competing alternatives recrodkeepi
ng
Similarities between FA and MA Basis in FS Based on Based on
objective facts facts or
1. Rely on the same AIS
estimates
2. Rely heavily on the concept of
Necessity of Based on Based on
responsibility or stewardship FS objective facts facts or
3. Provide accounting information and preparation estimates
generate reports Note: FA is case based; MA is model based

Addendum: FA requires that record be kept with

considerable precision; MA for estimates
Management Accounting

Scope of MA Controller vs treasurer

- All information which is provided to the Treasurer

management for analysis and
- Cash management
interpretation of the company’s
- Investment management
operations
- Debt manage
- Financial risk management
- Investor relations
Skills of MA
- FOREX, derivatives and interest rate
(1) Business acumen skills swap
a. Ability that allows you to - Top managerial and financial accountant
understand and cope with - Supervises accounting staff and
different business transactions oversees the preparation of financial
(2) Strategic thinking skills information
a. Looks far beyond the whole - Has custody of the company’s funds
picture entrusted to his care and responsible
(3) Leadership skills for planning and controlling the
a. Allow you to lead, motivate or company’s cash postion
inspire people to shine
(4) Time management skills
Controller Treasurer
a. Work within deadlines and
Planning and Capital provision
continually re-prioritize your to- controlling
do list Reporting and Investor relation
(5) Adaptability interpreting
a. Adapt quickly and easily Evaluating and Short-term financing
(6) Analytical skills consulting
a. Collect and gather the right Tax administration Banking and custody
information Government Credits and collection
(7) Technical skills reporting
(8) Interpersonal skills Asset protection Investment
(9) Communication skills Appraising the insurance
a. Communicate well in writing economy
and in person

Role of MA Ethical standards set by IMA

- Work directly under the managing (1) Competence

director or CEO. (2) Confidentiality
- Prepare the necessary procedure to (3) Integrity
implement the plan effectively (4) credibility
- Make economic appraisal and find the
influence of economic condition over
the business activity