Accounting for costs

Management accounting is concerned with the provisions and use of accounting information to managers within organisations, to provide them with the basis to make informed business decisions that will allow them to be better equipped in their management and control functions.

In contrast to financial accountancy information, management accounting information is:

  • Forward-looking, instead of historical;
  • Model based with a degree of abstraction to support decision making generically, instead of case based;
  • Designed and intended for use by managers within the organization, instead of being intended for use by shareholders, creditors, and public regulators;
  • Usually confidential and used by management, instead of publicly reported;
  • Computed by reference to the needs of managers, often using management information systems, instead of by reference to general financial accounting standards.