Finance and Management Accounting Essay Example | Topics and Well Written Essays - 2250 words

Finance and Management Accounting - Essay Example No commercial entity runs an R & D department to conduct in fructuous basic research ((ICMR), 2003). Management accounting is the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information that assists managers in specific decision-making within framework of fulfilling the organizational objectives (The ICFAI University Press, 2004). Like water, this rising tide of data can be viewed as an abundant, vital and necessary resource. With enough preparation, we should be able to tap into that reservoir -- and ride the wave -- by utilizing new ways to channel raw data into meaningful information. That information, in turn, can then become the knowledge that leads to wisdom. The idea is that information, knowledge, and wisdom are more than simply collections. Rather, the whole represents more than the sum of its parts and has a synergy of its own. In an organizational context, data represents facts or values of results, and relations between data and other relations have the capacity to represent information. Patterns of relations of data and information and other patterns have the capacity to represent knowledge. ... Without on-demand access to managed knowledge, every situation is addressed based on what the individual or group brings to the situation with them. With on-demand access to managed knowledge, every situation is addressed with the sum total of everything anyone in the organization has ever learned about a situation of a similar nature. Management accounting --- Importance of Stakeholders In the highly competitive environment, the survival of an organization may depend on how well stakeholders are managed. However, when managers delegate this responsibility of managing the stakeholder interests, there is no systematic way to evaluate their performance. With an evaluation method, such as a report card, managers no longer rely on observations regarding the outcomes of stakeholder management; they receive direct information from their stakeholders and can plan interventions accordingly (Slovensky, 2002). Management planning and control system is related to accounting system. Suitable goals are set based on the information provided by the accountants. Projections of futures sales, expenses, incomes and estimation of profit are made depending on the accounting information. After setting goals while examining alternatives, information about these alternatives comes from accounting system and the accountant is made to combine the data and produce meaningful reports. Though, implementation of chosen alternative is done by the mangers alone without the intervention of accounting system, the accountant is required to collect and summarize data about the success of the chosen plan. The evaluation of performance depends heavily on the accountant accumulates and reports. Though, accounting system is helpful in the process of