Cost and Management Accounting (Essay Sample)

Compare Cost Accounting and Management Accounting
Name
Institutional Affiliation
Compare Cost Accounting and Management Accounting
Accounting and finance have assumed much significance in today's competitive globe of business wherein corporate firms have to illustrate a fair and true standpoint of their financial position. Therefore, the accounting application in the business field has a crucial factor. Firm secretaries have to offer accurate and complete information regarding the firm's financial operations to the administration for decision making. That emphasizes that the account books are up-to-date, accurately maintained, and as per the norms. The management and cost accounting subjects are very crucial and beneficial for optimum employment of existing resources. A company's administration requires a clear cost accounting system to attain detailed information on costs. Lack of accurate reports, the management will be incapable of utilizing the data effectively. The essay will compare both management and cost accounting.
Management and cost accounting both are internal to a firm. Both have similar goals of aiding administration in decision-making, planning, controlling and techniques such as marginal costing, standard costing and budgetary control. Management accounting comprises numerous business aspects like risk management, strategizing, performance management, planning, and decision-making. On the other hand, cost accounting merely orbits around cost control, cost computation and overall cost reduction of the firm. In simpler terms, cost accounting is depicted as a management accounting subset (Kostyukova et al., 2018). As a result, management accounting's reach and scope are much more pervasive and broader than cost accounting. Additionally, management accounting offers a helicopter view of the firm by scrutinizing every factor quantitatively and qualitatively. Cost accounting merely offers a pixel standpoint of the cost of each service, process, or service.
A management accountant places the data in a broader perspective compared to a cost accountant. That accounts for a superior degree of objectivity and relevance in management accounting compared to cost accounting. It is the duty of the management accountant to give a precise idea regarding the types and items of costs needed to decide and analyze specific business issues and the impact of such costs on alternative solutions. A cost accountant is undeniably beneficial in gathering such costing data for the management accountant. Management accounting is focused on long-range and short-range planning and utilizes highly sophisticated strategies like probability structures and sensitivity analysis in the forecast and planning of prices. Cost accounting is more focused on short-term planning. Capital investment project evaluation