MSAF 607
MANAGEMENT ACCOUNTING
LESSON 1
Introduction to Management Accounting
Course Instructor
Teddy Ossei Kwakye, PhD, ACMA, CGMA
Associate Professor of Accounting
Department of Accounting
tokwakye@ug.edu.gh
Learning Outcomes
LO1
• Explain management accounting and
the role of management accounting in
managerial functions.
LO2
• Explain the ethical framework for
management accountants.
Slide 2
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Learning Outcome 1
Explain management accounting and the role of
management accounting in managerial functions
Slide 3
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Management accounting
[slide 1 of 1]
LO1
Concerned with the provision of
information to people within the
organisation to help them make better
decisions and improve the efficiency and
effectiveness of existing operations
Management accounting
‘The application of the
principles of accounting and
financial management to
create, protect, preserve and
increase value for the
stakeholders of for- profit and
not-for-profit enterprises in the
public and private sectors.’
Processes and techniques that focus on the
effective and efficient use of organisational
resources to support managers in their
tasks – planning, control and decision
making – of enhancing customer value and
shareholder value.
(CIMA Terminology)
Combines accounting, finance and
management with the leading-edge
techniques needed to drive successful
businesses
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Management accounting principles
[slide 1 of 1]
• Communication
provides
influential
insight.
LO1
• Relevant
Information.
Influence
Relevance
Value
Trust
• Impact of value
is analysed.
• Stewardship
builds trust.
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Management information
[slide 1 of 2]
Characteristics
of a good
information
LO1
Accurate
Complete
Cost-beneficial
Understandable
Relevant
Authoritative
Timely
Easy to use
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Management information
[slide 2 of 2]
LO1
Strategic level
Tactical level
Operational level
• Top-level management needs to
know about the developments in the
markets in which they operate and
the general economic situation.
• Management at this level might
want to know about issues such as
product or service quality, speed of
handling customer complaints,
customer satisfaction, employee
skills levels and morale, etc.
• Lower-level management may want
to know about the number of rejects
per machine, the lead time for
delivering materials
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Management accounting and managerial functions
[slide 1 of 2]
LO1
Planning
Control
Decision-making
• Deciding on organisation goals,
predicting results under various
alternative ways of achieving those
goals and then deciding how to attain
those desired goals
• Long-term plans and short run plans
• Ensuring that plans are properly
executed or modified when necessary
• Identify inefficient operations and
reward effective management
practices
• Choosing a course of action from
competing alternatives
• Inherent in the planning and control
processes
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Management accounting and managerial functions
[slide 2 of 2]
The role of
management
accounting
LO1
Provide estimates of the costs of outputs in
organisations
Provide information for managing resources
Support the organisation’s strategy
Contribute to improving competitive
advantage
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Learning Outcome 2
Explain why ethical behaviour of management
accountants are important in organisations.
Slide 10
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Ethics and management accounting
[slide 1 of 5]
IMA Ethical Guidelines
LO2
CGMA Ethical Guidelines
Professional competence and due care
Competence
Confidentiality
Integrity
Professional behaviour
Integrity
Confidientiality
Credibility
Objectivity
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Ethics and management accounting
[slide 2 of 5]
LO2
Competence
• Recognise and communicate professional limitations
that preclude responsible judgment.
• Follow applicable laws, regulations, and standards.
• Provide accurate, clear, concise, and timely decision
support information.
• Maintain professional competence.
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Ethics and management accounting
[slide 3 of 5]
LO2
Confidentiality
• Do not disclose confidential
information unless legally
obligated to do so.
• Do not use confidential
information for unethical or illegal
advantage.
• Ensure that subordinates do not
disclose confidential information.
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Ethics and management accounting
[slide 4 of 5]
LO2
Integrity
• Mitigate conflicts of interest and advise others of
potential conflicts.
• Refrain from conduct that would prejudice carrying out
duties ethically.
• Abstain from activities that might discredit the profession.
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Ethics and management accounting
[slide 5 of 5]
LO2
Credibility
• Communicate information fairly and objectively.
• Disclose delays or deficiencies in information timeliness, processing, or
internal controls.
• Disclose all relevant information that could influence a user’s
understanding of reports and recommendations.
Slide 15
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End of Lesson