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In this age of globalisation, while it is absolutely necessary for large listed companies in different countries to prepare fina
Finance & Accounting
Pages 9 (2259 words)
IFRS and Management Accounting Reports Introduction The importance of management accounting has been increasingly recognized by the industries over the period of time. Management account forms the basis for taking strategic management decisions by the businesses.
It focuses on effective use of the resources in a dynamic and competitive environment. Therefore, management accounting is concerned with resource management for facilitating decision making in an organization in tune with the changes continuously taking place due to various factors which may be internal or external to the business. International Financial Reporting Standards have not been developed with a view to report management decision making or management control. However, changes in the technology sphere, especially information technology enabled development of Management Accounting Software involving complex analysis of the business situations for the purpose of making strategic management decisions. Globalization and liberalization of the economies calls for uniformity and standardization in various fields for easy dissemination of information. Therefore, the need for uniformity in management policies, procedures and methods of applications of management techniques will eventually lead to incorporation of management accounting in IFRS over a period of time. Evolution of standards The developments taking place in the businesses are accepted slowly and shaped up by the conventions followed in the society or country in the early stages. These principles undergo various judicial tests in the evolutionary process before passing through the legislature. ...
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