DEFINITION OF MANAGEMENT ACCOUNTING AND FINANCIAL ACCOUNTING
Accounting management is the discipline with respect to the use of accounting information by management and other internal parties for the purposes of product costing, planning, control and evaluation, and decision making. The common instructional goals of this course is the students are expected to evaluate and manipulate the management accounting system that matches the operating conditions and strategy of the organization.
Financial accounting is part of the accounting related to the preparation of financial statements for external parties, such as shareholders, creditors, suppliers, and government. The main principle used in financial accounting is the accounting equation (Assets = Liabilities + Equity). Financial accounting problems associated with recording transactions for a company or organization and preparation of periodic reports on the results of the record. This report is prepared for general interest and is typically used to assess the achievements of the company owner or manager of manager used as financial accountability to shareholders. The important thing is the existence of financial accounting. Financial Accounting Standards (IFRSs) which are the rules that must be used in the measurement and presentation of financial statements for external stakeholders. Thus, expected users and compilers of the financial statements can communicate through the financial statements, because they use the same reference, namely SAK. The SAK began to be implemented in Indonesia in 1994, replacing the principles of Indonesia Accounting 1984. (Wikipedia)
Accounting management is the discipline with respect to the use of accounting information by management and other internal parties for the purposes of product costing, planning, control and evaluation, and decision making. The common instructional goals of this course is the students are expected to evaluate and manipulate the management accounting system that matches the operating conditions and strategy of the organization.
Financial accounting is part of the accounting related to the preparation of financial statements for external parties, such as shareholders, creditors, suppliers, and government. The main principle used in financial accounting is the accounting equation (Assets = Liabilities + Equity). Financial accounting problems associated with recording transactions for a company or organization and preparation of periodic reports on the results of the record. This report is prepared for general interest and is typically used to assess the achievements of the company owner or manager of manager used as financial accountability to shareholders. The important thing is the existence of financial accounting. Financial Accounting Standards (IFRSs) which are the rules that must be used in the measurement and presentation of financial statements for external stakeholders. Thus, expected users and compilers of the financial statements can communicate through the financial statements, because they use the same reference, namely SAK. The SAK began to be implemented in Indonesia in 1994, replacing the principles of Indonesia Accounting 1984. (Wikipedia)
HISTORY OF MANAGEMENT ACCOUNTING
In the 1880s, American manufacturing company began to concentrate in the development of large-capacity production technology. The managers and engineers at the metal company has developed a procedure to calculate the cost of the relevant product called scientific management. This procedure is used to analyze the productivity and profit of a product. However, as the development of accounting thought so after the procedure in 1914 began to disappear from the company's accounting practices.
After World War I, there is a financial accounting rules that have reduced the impact of accounting information useful for evaluating the performance of subordinates in large companies (lost relevance). Until 1920, all managers believe the information related to primary production processes, transactions and events which result in a nominal amount in the financial statements. After 1925, the information is used by managers to be more simple and a lot of manufacturing companies in the U.S. have developed management accounting procedures as it is known today.
During a period of more than sixty years, accounting academics trying to restore the relevance of accounting information rooming with financial accounting information. The attempt to use a simple model of manufacturing companies, similar to the 19th century textile company, and in order to address the problem of production, academics reorder inventory kos reporting information. Nevertheless, the model is too simple to explain the real problems faced by managers but it how the information in order to facilitate boarding derived from the financial statements can be made relevant to the decision-making (management kos).
Beginning in the 1980s to the present, management accounting experience a period of rapid growth with its role as a chaperone financial accounting.
Johnson and Kaplan write beautifully in "Relevance Lost: The Rise and Fall of Management Accounting". Book a decent enough read to understand about management accounting.
CRISIS MANAGEMENT IN ACCOUNTING
Bob and Tom Eiler Cucuzza
Over the past few months, the accounting profession and experienced the major changes, which mostly focuses on the performance and financial accounting issues (such as financial accounting rules are complex, ethical aspects of the profession, and so on). While we are taking in the journal argued that the crisis in management accounting as great as the crisis in financial accounting. It can be concluded with regard to the crisis management accounting is:
A. FROM FACTORS users
In traditional management accounting focuses on providing only to internal users such as factories, division, or the company's internal environment and do not follow the company's economic expansion, especially in the external part of the business consisting of supplies, joint ventures, and other special purpose company. Along with the global demands more attention focused on the ability of management accounting to measure and evaluate internal and external areas of the company to optimize the decisions to be taken by external parties. The parties are:
1. Internal party
Internal parties are parties that are in the organizational structure. Management is the most in need of proper accounting statements and inaccurate to make good decisions and correct. Examples such as managers who see the financial position of the company to decide whether to buy a building for a new branch office or not.
2. External parties
a. Investor
Investors require a company's financial information to determine whether to invest or not. If the predictions of the investor will benefit from the good, then the investor will deposit capital into the company, and vice versa.
b. Shareholders / owners of the company
The owner of a company that has a part share financial information companies need to be able to determine the extent of progress or setbacks experienced by the company. Shareholders will benefit from the dividends that will be even greater if the company huge profits.
c. Government
The amount of tax to be paid by the company or organization to the government of a large part based on the information in the financial statements of the company.
d. Creditors
If the company is desperate and in need of fresh capital the company may borrow money to creditors such as borrowing money in the bank, owes goods on supplyer / suppliers. Creditors will provide funds if the company has a good financial condition and will not have a great potential for loss.
e. Other Parties
Actually there are many other parties from outside companies that may be using report / accounting information of an organization such as employees, unions, public accounting auditors, police, school / college students, journalists, and many others.
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