Managerial Finance and Accounting Essay Example | Topics and Well Written Essays - 1500 words

Managerial Finance and Accounting - Essay Example For this purpose, necessary policy changes have to be taken after considering the following points: Parties of interest: The FA statements are prepared for providing external information to the major stakeholders of the organization while MA system is designed to provide information to the management internally. Management of Money: FA reports only the monetary aspects of the organization while MA takes interest even in the non-monetary aspects like technical innovations, money value changes etc. for deciding on actions like replacing an asset or affecting an insurance policy strategically. Reporting periods: FA is reported periodically on a quarterly basis. However, MA may require data on a shorter interval basis say a week, fortnight etc so that decisions based on these factors could be taken up on a speedy manner. Nature & Precision: FA reporting is slow but more precise in nature that it serves the principle of objectivity. MA though requires objective information inscribes certain subjective information which gives room for arbitrariness given the short duration. Legality: FA reporting is compulsory but MA systems may or may not be installed by the organization legally. However, it is being observed that for any organization to be successful on a large scale basis, implementing MA systems would always prove to be beneficial. In short, if FA provides information about the movement of the business in the past, MA provides the way in which the business has to plan its future moves. In this process, a management accountant plays a vital role that he performs the following functions: Having understood about the basic guidelines of MA, Hadika plc, to maintain its market share even in the present global crisis will have to give a re-look to its present pricing policy which has to be arrived at after taking into consideration, the following cost classifications: Marginal Cost: The aggregate of