Management Accounting

Management accounting basically is to support management to perform management function effectively i.e planning , controlling , Decision Making. Management accounting provide support to management for effective utilization of resources to maximize the organization profit. Management accounting have no structured formats like financial accounting and management may decide the formats which best suit to their requirements. Management accounting deals both with historical cost and future cost and especially for decision making the future cost is more relevant than historical cost.

There is no statutory requirement to prepare management account and mostly statutory requirement are for the preparation and presentation of Financial account. Management accounts are also not subject to audit, however, the auditor may look into management accounts to obtain evidence for financial accounts.

Management accounts are prepared as and when required by the management . some report may be required on daily bases and other may be required on monthly and quarterly bases. for example material consumption report may be required by production manager on daily or weekly bases and product wise sales report may be prepared for each month.
Example of Management Reports


There are variety of management reports, for example, sales by customer report, product wise sales , material consumed by each product, Labour consumed by each product, monthly budget, variance analyses, total machine hour utilization, Idle time, etc.