Critically discuss the effectiveness of management accountancy as a tool for decision making, planning and control
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Course
Management accounting (ACCT618)
Institution
Cambridge University (CAM)
Critically discuss the effectiveness of management accountancy as a tool
for decision making, planning and control. The essay is a critical review of management accountancy; it is detailed and gives great insights on this subject.
Effectiveness of Management Accounting for Decision-Making, Planning and Control
Student’s Name
Institutional Affiliation
, MANAGEMENT ACCOUNTING 2
Effectiveness of Management Accounting for Decision-Making, Planning and Control
Introduction
Accounting refers to the identification, selection, measurement, and communication of
costs and benefits type of information for the purpose of facilitating decisions that are
economically viable concerning organizational resources and practices. In business,
organizations and investors adopt varying forms of accounting procedures including planning
and management accounting, whose application helps in the performance of organization
functions. Management accounting has significantly merged different stakeholders such as
managers, accountants and information users, thus guiding on how to make decisions during the
decision-making process. It seeks to offer financial information regarding the costs of goods,
services, and performance analysis. The essay, therefore, evaluates how management
accountancy is effective in decision making, planning, and control while taking consideration of
challenges businesses face in decision making and implementation.
Management Accounting in Decision Making
Accounting information is critical to beneficial decisions concerning human resource
management. Accounting information system acts as a tool for integrating hardware, software,
telecommunication network and database, and also monitoring the quality of work and
satisfaction level of consumers (Atrill & McLaney, 2012, 71). As an information system,
accounting is a significant tool of decision making especially in manufacturing, in which a
wrong decision is irreversible and follows negative consequences. There is a huge connection
between accounting information system, budget allocation, and business policies. According to
Collier (2015, 23), the collective organizational performance has a chance to benefit from
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