Cost and Management Accounting in Context

Abstract

This chapter explains why the techniques and methods of cost and management accounting are important tools in many organisations. In practice, the phrase management accounting is often used to cover both cost and management accounting. Whether the activity is producing game shows for television, manufacturing computers, running a hospital ward or taking tourists on holiday, the organisation’s managers require financial information to help them do their job efficiently and effectively. Cost and management accounting contribute to good management by providing financial information that assists managers in controlling activities, making plans and deciding between alternative courses of action. There are no legal requirements for businesses and other forms of organisation to have a cost and management accounting system, but experience shows that such a system plays a valuable part in the efficient running of any establishment.