Page 11 - BA2 Integrated Workbook - Student 2017

The context of management accounting

Management accounting

‘The CIMA Terminology defines management accounting as '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.'

The main focus of management accounting is influencing the value of all types of
organisations in a positive way. Management accounting influences the value of
organisations by providing relevant information to the management of these
organisations, who use this information to make decisions regarding the organisation.

From this we can see that an important skill of the management accountant is to
communicate effectively to management in order to influence the decision-making
process and that management must trust the information provided by the
management accountant as they will act on it.

1.1 Global Management Accounting Principles

CIMA, together with the American Institute of CPAs (AICPA) have developed the
Global Management Accounting Principles which should be used to guide best
practice in management accounting.

INFLUENCE RELEVANCE

TRUST VALUE

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