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The use of managerial accounting in any industry - Essay Example
Finance & Accounting
Pages 12 (3012 words)
Managerial Accounting in Toyota Introduction Modern business environment involves high complexity and growing threat of new entrants, which together make potential challenges to business firms today regardless of the industry they involve…
This accounting branch embraces accounting systems, methods, and techniques that can help the organization maximize its profits or minimize losses. Scholars opine that management accounting is the presentation of accounting information in a way that would assist the top management to create potential policies for managing its daily operations. Management accounting is not confined to financial management information, but it is about comprehensive information about overall organizational activities. It is evident that financial management alone is not capable of providing necessary information for performing managerial functions effectively. In contrast, management accounting is able to provide key information about cost, profits, and factors which are useful for the management to discharge their functions effectively. Management accounting can be considered as an extension of the management aspects of the cost accounting, and it is based on the principles of both cost accounting and financial accounting. It seems that management accounting is relevant to fast growing sectors like automotive industry because those sectors need an uninterrupted flow of various information to ensure improved value chain efficiency. This paper will explore the uses of managerial accounting tools in the automotive industry with particular reference given to management accounting practices in Toyota Motor Corporation. ...