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Financial verses Managerial Accounting BY FRRј12 Fundamentals of Accounting: Managerial verses Financial Accounting Fundamentals of Accounting cataract Fundamentals of Accounting: Managerial verses Financial Accounting What has the organization in its focus; futuristic planning, financial control, and data based decision making affecting its reports and suggestions; and an emphasis on relevance and timeliness in its decision making (2012)? The answer to this question is managerial accounting.
According to J. W. Jones (2013), a retired managerial accountant, her Job and other positions with the title are responsible for reporting uncial information to the company’s administration and parties outside of her organization such as stockholders or creditors; however, his focus was the internal accounting services and needs of the business’s management. Jones confirms there is a difference between managerial and financial accounting.
His career choice was managerial accounting which specialized in helping gather and communicate the information needed to set the company’s long term objectives and goals for cost control, revenue strengths and weaknesses, and profit data statistics within in local departments, regional and often territorial plants. At times, Mr.. Jones found himself working with certain data regarding customer groups and how they would be affecting that business segment in the future.
This differed from financial accounting in that the latter would handle the matter from a historical account of the numbers taking past records and data to make future goals relevant and this type of accounting is necessary for certain external report to comply with the generally accepted accounting principles, GAP, guidelines and the international financial reporting standards, FIRS; whereas, the managerial accounting professionals do not need to follow GAP or FIRST. W. Jones, personal communication, November 8, 2013).
Since the managerial accounting is proactive and reports of managers inside the organization, Mr.. Jones indicates it is a good tool for future planning and decision making within the organization. The managerial accounting reports sent to the managers can help set timeliness and achieve the purposes that are ranked as priority by controlling the situation through feedback and modification processes. This governing method requires decision making skills that are taken from a segment to the organization’s activities to determine: what should be sold, when, to whom, how should it be sold?
This is strictly internal transparent information being communicated to the management from the various segments of the company concerning budget, revenue, and income numbers. While the managerial accounting is taking place within an organization for planning the budget, controlling quality, and making decisions about selling serving, and the execution of sells, the financial accounting reports are being sent to company owners, creditors, tax auditors, and regulators emphasizing financial activity of the past in mandatory documents 0. W. Jones, personal communication, November 8, 2013) .
Financial accounting reports are reification and focus on historical accounts of financial movement within a company as the interview revealed, Garrison, Noreen, and Brewer (2012), the authors of the text book, Managerial Accounting, also support this statement. Managerial accounting is used in decision making by interpreting the segment data which might be requested and helping the management make future decisions about the products and services that will interest the market and new prices on the existing items; furthermore, this includes new products/services that will be introduced and those that will discontinued.
The second stage of the decision making part of managerial accounting is knowing who to serve and who not to serve any longer; moreover, conclusions of discounts to specific groups will be determined if any will be permitted. The third stage of the decision making portion of managerial accounting is making the plan to reach the goal happen. This is a time to consider expansion, reduction, quality control, efficiency, and effectiveness within the organization to supply it what is needful in the way of equipment modernization, employee training, or software updates (Garrison, Noreen, & Brewer, 2012, Exhibit 1-1). Mr..
Jones worked in managerial accounting with in a large construction many near Atlanta, GA before she retired early, a few years ago. There are many different professional areas in which managerial accounting majors can seek employment. The opportunities are broad in the world of business and most companies can benefit by managerial accounting being incorporated into their organization. Such a company that had a marketing, operations management, and or human resource department could make better goals in the budget, data retrieval, and decision making for timeliness of the organization’s short term and long term objectives and goals 0.
W. Jones, personal communication, November 8, 2013). Managerial accounting positions are found in colleges and universities in the business or faculty staff, financial and investment groups, health related services and medical centers, coliseum or arena facility, pharmacy company, an automobile corporation selling or manufacturing vehicles, government and contracted government companies for defense and homeland security are only a few of the wide variety of options that crossed Mr..
Jones mind of career opportunities connected to managerial accounting 0. W. Jones, personal communication, November 8, 2013) . The Institute of Management Accountants, Inc. ‘MA, (2013) statement of ethical practice is “Members of IMAM shall behave ethically. A commitment to ethical professional practice includes: overarching principles that express our values, and standards that guide our conduct. This statement sets a standard of competence for each person who is a member of the IMAM to follow helping them to act responsibly while sustaining professional behavior in the workplace, providing accurate intimation to those who require it from them, and performing their duties in accordance with the law. Confidentiality is part of the principles under this moral declaration to hold any information acquired through the professional placement private except when authorized to release it or required by law to reveal the information as part of a legal procedure.
Regarding business associates with respect, avoiding engaging in conflicts, respecting others and refraining from all prejudice are the integrity character traits expected by the IMAM of its affiliates. Adding to its ethical standards is credibility: therefore, each member of the IMAM should take care to communicate truthfully and timely while revealing all information that is necessary and asked for o make any lawful evaluation complete within the company or legal system.
Last of the principles is the ethical resolution of conflicts when and if they should occur by the IMAM members (“Statement of Ethical Professional Practice,” 2013). In closing, many accounting graduates limit themselves becoming a traditional certified public accountant with firms that are in need of their mathematical skills; however, accounting opportunities go far beyond this realm into the business and industry organizations to use the financial skills acquired to aid company management and executives in planning and controlling their specific goals for the future of the company.
The decision making process that these upper level staff members are required to perform will be more objective and related to the budget that can be created with the help of this managerial accountant. References Garrison, H. R. , Noreen, E. W. , & Brewer, P. C. (2012). Managerial Accounting (Custom Edition De. ). New York, NY: Create Publishing. Statement of Ethical Professional Practice. (2013). Institute of Management Accountants. Retrieved from http:// www. Immanent. Org/resources_and_publications/Thickeners. Asps