Managerial Accounting Practices Essay Example | Topics and Well Written Essays - 500 words

Managerial Accounting Practices - Essay Example These stakeholders include employees, management and equity holders. â€Å"The process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan, evaluate and control within an entity and to assure appropriate use of and accountability for its resources (wikipedia, 2007)†. The scope of studies done by management accountants enable them to serve their organizations in vast variety of tasks and role and they have the ability to assume different roles in different circumstances due to their great flexibility in changing their orientation as per required. Management accountants provides helps organizations by performing all the budgeting and planning function for their organizations working on the basic information that they gather from different departments and different business processes. Managerial accounting helps organization in safeguarding their resources since they take into account all the variances that occur in a particular period and the exactly pinpoint the place where these variances occur. This helps management to take counter action of these losses of assets. This greatly reduced the cost for an organization. Managerial accountants help organization to use their resources in the most optimal fashion. They do so by performing the JIT procedures and methods to ensure that only the minimum amount of inventory load is borne by organizations and departments receive materials and goods only when needed. This reduces burden in the form of reduced handling and storage cost of inventory. Management accountant helps financial accountants in preparing financial reports for external stakeholders such as stockholders, auditors and government officials. They also prepare management reports for different levels of management depending on their requirement. These reports help departments analyze their performance during the past period and enable them to reorganize and