Few number of differences can identified between cost accountingand management accounting, the line of difference is very thin. Because cost accounting, at present, comprises of some of the advanced techniques and systems of costing such as marginal costing, standard costing, responsibility accounting, etc. and therefore, it (i.e., cost accounting) tends to conform to management accounting. Consequently, no much difference can be found between the two. Further, both serve the internal parties(viz.,management). However, a very few minor differences that exist between the two are explained in the below table.
S.No.
|
Cost
Accounting
|
Management
Accounting
|
1
|
Primary
Objective : Cost accounting aims at ascertaining the cost of goods and
services. It layss emphasis on the stage by stage computation of costs.
|
Management
accounting aims at the presentation of the cost data, to the extent required,
whereever and whenever they are required together with other relevant
information to the management for taking decisions.
|
2
|
Time Factor:
It lays emphasis on the past but less emphasis on the future. That means, it
reports about costs that have been incurred.
|
It predicts
the future on the basis of the past events, present happenings and future
estimates.
|
3
|
Information
Coverage: Cost reports deal mainly with the costs-incurred or budgeted and
standards, variances, savings, etc.
|
Cost data
form a part of managerial reports but not the sole aspects.
|
4
|
Governing
Principles, Rules, etc: Cost accounts and reports are tobe prepared as per
certain rules, principles, procedures, etc., as specified by the appropriate
authority (e.g., ICWAI) to the industry to which the company belongs to.
|
No such
rigidity is there in the case of managerial reports. The procedure format,
etc. Can be modified from time depending upon convenience as requirements.
|
5
|
Statutory
Verification: Cost accounts and reports, in many cases, are subject to
statutory audit(i.e., cost audit). Hence, they should be prepared, as far as
possible, on objective manner.
|
Management
reports are not subject to any statutory audit. Of course, there is a
management audit. But, it is voluntary and it evaluats the managerial
function decisions, etc. However, management reports included both the
objective and the subjective data.
|
6
|
Utility of
Reports: Though cost reports are meant for management, they are useful even
to the external parties.
|
Management
reports are useful only to the management but not to both internal and
external parties.
|
7
|
Inter-dependence:
Cost accountant provides voluminous data to the management accountant and
therefore, acts as a source of information. Further, costing system can be
installed in an organization without management accounting system.
|
Management
accounting, for its reports, extracts the maximum information from cost
accounting. And therefore, cost accounting is a necessity for the smooth
functioning of management accounting. Because, management accounting cannot
exist in the absense of a proper and systematic cost accounting sytem.
|
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