Similarly management accountant can provide sales report, production report to the respective manager for taking suitable action about the sales and production position. For example, if a busi­ness enterprise determines a target profit for a year, it should also determine how to reach that target. Now the real challenge for current and future management accountants is to organize the immense amount of data that can be provided to support decision making without creating information overload in managers and executives. comply with internationally agreed principles, standards and codes of best practice. Image Guidelines 5. statement

External users include: Entities have become larger, more diversified and multinational, this has lead to a need for Five areas of study are emphasized on the CMA exam: (1) economics and finance, (2) organizational behavior, (3) public reporting, (4) periodic reporting for internal and external purposes, and (5) decision analysis, including modeling and information systems. Cash flow Statements gives additional information to assist decision makers in assessing an entity’s ' Decision-making is inherent in each of three management functions described above, namely, planning, organising and controlling. 1 Currentliabilities, Debt¿euityratio= and long-term decisions e.g., capital budgeting, investment appraisal, project financing etc. reliably measured

any personal transactions of the owner Core activities include: - Formulating plans and budgets - Providing information to be used in monitoring and control within the entity. - Disparities exist between countries in relation to their enforced environment and social standards, Connectivity and Communication contributes to the entity’s strategic objectives, Note: Budgets form part of management accounting because it is not bound by regulatory requirements. statistics bureaus. Accounting information is designed to meet the needs of both: Financial accounting vs Management accounting, Financial accounting is the preparation and presentation of financial statements to allow users (external On the other hand, the controller usually reports to the vice president of finance for the division who, in turn, reports to the division’s president and/or overall chief financial officer (CFO). - Item is paid but not recognised as an expense i.e not used or consumed. You need to be aware of these trends as you work through this textbook. Y Z � � š ã ä è é V  ô P ˆ ‰ $ $ ö% ÷% ı% 5'. Legal duties - Helping to identify periods of expected cash shortages and surpluses Accumulated depreciation represents the total depreciation that has been charged to the income piece of information is an accurate representation. - To calculate a trend, it is necessary to have at least 3 years of data.

The entities value is not reflected due to: Items that generate future sacrifices not satisfying definition and/or recognition criteria, The historical nature (or combination of cost and fair values) of the balance sheet, Accounting standards require financial statements to be prepared on the basis of accrual would generate higher returns, An entity’s capital structure is the proportion of debt financing relative to equity financing, and Maintaining Optimum Capital Structure 5. as business transaction until an exchange of goods between an entity and an outside/external entity. entities or industry averages obligations, But excess working capital is undesirable because the funds could be invested in other assets that - Debts needs to be serviced from cash flow, so it is useful to relate the entity’s cash generating

Personal transactions: are transactions of the owners, partners of shareholders that are unrelated to Prohibited Content 3. can easily be determined by the management accountant. - Operating activities Averageaccountsreceivable Current ratio NET PROFIT (LOSS) = REVENUE – EXPENSE In control function managers have to decide whether variances are worth investigating. Developing Management Information System (MIS) 4. Manage­ment accounting system contains a storehouse of valuable information for predicting the results of various courses of action. - Cash is received, but income is not recognised because the goods or service has not been provided - Relevance – information must have a qualitative characteristics of financial information - Entity’s often articulate their governance, environmental and social policies and report on their i.e bank, accounts receivable, inventory, vehicle Second, does the arrival of e-commerce in service, merchandising, or manufacturing organizations change your response to the first question? There are choices in recording transaction that will involve estimates and judgements by - Ratio Analysis is only one financial analysis tool - Current ratio (or working capital ratio) indicates $ of current assets per $ of current liabilities, Current Ratio= - Income is recognised without receipt of cash (iv) Gathering the information about the consequences of each alternative. Equity Decision-making. Conceptual framework is intended to: Provide guidance where no standard exists. - Relevance – information must have a quality that enables users to form future predictions of Management accountant has, therefore, to maintain an optimum capital structure and give due consideration to various cost of capital theories, leverage and possibility of trading on equity.