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Managerial Accounting:Going Beyond the NumbersJason YearwoodOMGT 422 – Managerial AccountingJuly 13, 2014Ms. Cherisa JerezSouthwestern College Professional StudiesIntroductionAccounting is a profession that most individuals think of as number crunching or a profession that assists with taxes or conducts audits. Accountants provide organizations with valuable information that is vital to the organization’s success and competitiveness. There are two main types of accounting used in business, financial and managerial accounting. Financial and managerial accounting both get their data from the same sources, however, the reasons for gathering the data and to whom this data is given is where the similarities end. The dynamics of business and managerial accounting have changed and as organizations posture themselves strategically on the global stage, there comes a need for managerial accountants to be knowledgeable enough to provide information that will affect every department in the organization. As Mowen, Hansen & Heitger (2012) explains “Effective managerial accounting systems also have changed in order to provide information that helps improve companies’ planning, control, and decision-making activities” (p. 8). This essay will discuss the similarities and differences of financial and managerial accounting, the role managerial accountants play in the organization, and managerial accounting as a multidisciplinary occupation. Financial and Managerial AccountingFinancial accounting is the gathering of information for individuals and other businesses outside the organization and managerial accounting deals with gathering information for individuals internal to the organization. Financial accounting is tailored more towards the investors and other stakeholders, whereas, managerial accounting is tailored for the managers of the organization to plan and make decisions. Financial accounting focuses on the past and managerial accounting focuses on what is happening now as well as the future. Financial accounting is strict and all accounting practices must be in accordance with the Generally Accepted Accounting Principles (GAAP); managerial accounting is governed by the guidelines set forth by the organization’s policies. There are several similarities between financial and managerial accounting. Both financial and managerial accounting gives a snapshot of the organization’s financial status and the data is obtained from the same source. Financial accounting and managerial accounting both benefit the organization when analyzing performance and trends. One of the main uses for both sets of accounting reports is measuring past performance to plan for the organization’s future. Managerial accountants play a vital role in the organization’s day-to-day decisions (Goessl, 2014, para 1, 2, 3, 7).Managerial Accountants Role in Planning and PolicyThe internet, global competition, and the need of accurate and up-to-the minute information to make decisions on a strategic and tactical level have made the use of managerial accounts a necessity at the management level. Managerial accountants analyze and produce data for management that will aid in policy making and planning. Many organizations expect managerial accounts to have a working knowledge of all sectors of the organization. This wealth of knowledge will assist management with making the tough decisions on a daily basis in order to not only protect and increase the wealth of the organization, but also allow it to remain competitive. Managerial accountants are also asked to aid department managers by providing information to aid in their decision making. Their skill set, knowledge base, and what is expected of them has changed drastically. Managerial accountants provide the critical data that allows organizations to modify or create new policies based on changes in the market, the competitor, risk management, or a new focus for the organization. Managerial accountants are no longer just data collectors; they are expected to provide data that will affect every department and the organization as a whole (Managerial Accounting, n. d.). Managerial accounting is now considered a multidisciplinary occupation. Managerial Accounting as a Multidisciplinary OccupationManagerial accounting has changed from processing and presenting data to being a crucial part of the decision making process. “Accounting is a multifaceted discipline, which [requires a]….working knowledge of the various functional areas of organizations including finance, information systems, human resources, production, marketing and operations” (Careers in accounting, n.d., para 2). Managerial accountants are involved with providing specialized information during policy development, aid in the assessing of other functional areas of the organization, and most of all provide data to management to make decisions on the future of the organization (Careers in accounting, n.d., para 3). Managerial accounts are force multipliers in their organizations; they are tasked to assist in accounting and non-accounting areas of the organization. They are expected to deliver accounting information tailored for that area of the organization that will enhance the decision making process. Managerial accountants have proved they are valuable tools for any organization, their knowledge and expertise affects every area of the organization as they reflect on the past and focus on the future. ConclusionFinancial and managerial accounting provides vital information for the organization in the decision making at the management level. The information gathered using both financial and managerial accounting practices are beneficial to the organization. Managerial accounting has evolved from the days of solely providing reports to being involved with every section’s decision making process. Managerial accounts are challenged to develop a multidisciplinary focus that will provide the organization with information to accomplish its strategic and tactical objectives. ReferencesCareers in accounting. (n.d.). In College of Business Administration online. Retrieved from Goessl, L. (2014). How managerial accounting differs from financial accounting. Retrieved from Managerial Accounting. (n. d.). In Reference of Business online. Retrieved from Mowen, M. M., Hansen, D. R., & Heitger, D. L. (2012). Cornerstones of managerial accounting. Mason, OH: South-Western, Cengage Learning ................
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