Characteristic of Management Accounting

Characteristic of Management Accounting

Characteristics of management accounting can be explained in terms of support to management, no legal requirement, and no standard format, and non monetary aspect, historical & future costs.

1.    Support to Management:

 First characteristic of management accounting is that it is basically done to support the management for performing different management functions. The information is interpreted, summarized, processed in a way that it should meet the management needs for planning, decision making and controlling.

2.    No legal Requirement:

Second characteristic of management accounting is that, it is not legally required to prepare management account in many countries. However, some countries require some management reports preparation, especially by public or listed companies.  Primary function of management reports is to support management

3.    Lack Standard format:

The management accounting unlike the financial accounting does not have standard format and each organization prepare management accounts according to the need and requirements of their respective management.

4.    Non Monetary Aspect

 The Management accounting takes into account non monetary aspects and different kind of non monetary reports are generated. The material used in production, unit produced and sold etc.

5.    Historical and Future Data:

Management accounting takes into account both historical data and future data. The management needs future information for the purpose of planning and decision making.