Six Areas of Specialization for Management Accountants
Unlike a financial accountant, a management accountant has several areas of expertise. These areas are above and beyond what a financial accountant would normally find themselves performing. Some of the duties and responsibilities that a financial account can carry out are the following: records, classifies and files accounting information. Maintaining one’s own specialty in providing services covering cash management, payroll, accounts receivable, accounts payable, inventory, or purchase transactions. Finally, the financial accountant may also be involved in a small part of a company’s total accounting responsibility, such as in relation to an accountant working with management who has a broader view of the operation and greater responsibilities.
The following are six areas of expertise that one would expect a management accountant to be able to perform effectively and efficiently in accordance with Generally Accepted Accounting Principles (GAAP):
- Accounting information system. The management accountant in this area designs and implements manual and computerized accounting systems to collect managerial information for better management practices.
- Financial Accounting. Based on the accounting data prepared by the financial accountant, the management accountant prepares various financial reports and statements, and helps to analyze, operate, invest, and make financial decisions for management effectiveness and efficiency.
- Cost accounting. The cost of producing or providing services must be measured. An accountant who works with management also performs additional analysis to determine whether products and services are being produced in the most profitable manner.
- Budget. In the budgeting process, a management accountant helps management develop a financial plan that positively impacts profitability and improves cash flow.
- Tax accounting. Instead of hiring a public accountant, a business can use its own management accountant. For example, one may focus on tax planning, preparing tax returns, and dealing with the Internal Revenue Service and other government agencies.
- Internal audit. Internal auditors review the accounting and operating control procedures adopted by management to ensure that the controls are adequate and are being followed. The management accountant may also monitor the accuracy and timeliness of reports provided to management and third parties to verify accuracy and compliance with rules and regulations in accordance with GAAP.
© Joseph S. Spence, Sr., 9/7/09
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Submitted by “Epulaeryu Master”.
