What is the concept of management accounting?

Management accounting mainly predicts, makes decisions, controls, analyzes and evaluates the internal economic activities of enterprises, and provides relevant information for enterprise managers in order to maximize the economic benefits and value of enterprises. Management accounting normative documents mainly include basic management accounting application guide, strategic management application guide, budget management application guide, cost management application guide, operation management application guide, internal transfer pricing application guide, investment and financing management application guide, performance management application guide, risk management application guide, management accounting report application guide, management accounting information system application guide and so on. Through the basic principles and application guide of management accounting issued by the Ministry of Finance, we can see that its contents highly summarize the research achievements of management accounting in the past decades, involving many aspects such as prediction, decision-making, calculation, control, analysis, evaluation and reporting, and form an independent and complete management accounting system in theory.

Management accounting is an accountant who helps enterprises make money. Traditional bookkeeping accounting is accounting for counting money. Management accounting is not just counting money, but telling all departments of the enterprise what to do to earn more money, whether it is to reduce costs, expand business or improve efficiency.

Management accounting is process accounting. Management accounting must be integrated with various business departments to form a fish-water relationship, participate in the process of making money in enterprises, and help everyone make suggestions or implement necessary controls with accounting professional knowledge and ability, so as to achieve the purpose of helping enterprises make money. 3. Management accounting is an accounting with cash as its core. The biggest specialty of management accounting is to take cash as the core. Taking cash as the core, management accounting has established a whole set of management accounting professional system, such as time value, present value, final value, NPV, IRR, capital cost, capital structure, correlation, sensitivity and safety margin analysis.

Management accounting is an influential accounting. In addition to professional knowledge, management accountants also need to master many soft skills such as communication, coordination, interpersonal relationship handling, leadership and cross-functional team. Management accountants use these soft skills and professional knowledge, and through their influence, guide leaders to correctly and profoundly understand management accounting and its practice, and guide all employees to persistently carry out management accounting practice in their work.

The above contents refer to the answers of management accountant PCMA candidates for reference only. PCMA, a management accountant, is a professional qualification certification program for management accounting practitioners launched by China Association of Chief Financial Officers.

Official website of management accounting education