Scope of Management Accounting
The area of management accounting is to identify, develop and present financial and non-financial information that is relevant for organizational planning and control. Although it is possible that management accounting has existed in several forms for thousands of years, 1 documentary evidence about the nature and form of management accounting practices since the 19th century. During the accounting period management presents the main objective to provide cost information used for strategic pricing. A process known as ‘costing’, or more generally, ‘cost accounting’.
During the early 20th century, executives, such as Alfred Sloan in American organizations such as Dupont and General Motors, recognized the existence of financial information such as return on investment in supporting organizational control processes. This role includes evaluating performance, coordinating decision making in large, decentralized organizations, and identifying opportunities to improve practice. The area of management accounting was later called ‘organizational control’.
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