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Management Accounting Overview

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Management accounting is a subfield of accounting concerned with providing accounting information to management staff in an organization. This provides managers with the ability to make business decisions on an informed basis. Unlike most accounting, management accounting information is generally kept confidential and used only by management.

It is designed to look forward, not to provide a record of what has gone before. Instead of complying with usual accounting standards, management accounting is computed using management information systems, as well as the organization's own internal rules and controls. These differences are because management accounting serves a different purpose from the more usual financial accounting.

Job Responsibilities

Management accountants may also be called private accountants, managerial accountants, corporate accountants, industrial accountants, or cost accountants. The work remains the same, however. In management accounting positions, jobholders are expected to record and analyze the financial information of their employers.

Other responsibilities involved in management accounting include performance evaluation, asset management, cost management, and budgeting. Management accounting experts are usually part of an executive team, targeted either toward new product development or strategic planning for the organization. They're responsible for analyzing the financial information needed by corporate executives to make sound business decisions.

A management accountant may also prepare financial reports for other groups of people, including tax authorities, regulatory agencies, stockholders, and creditors. If a management accounting professional is part of an accounting department, he or she may also be involved in cost accounting, financial analysis, planning, and budgeting.

Work Environment

Most people in management accounting positions work in an office setting. Unlike other types of accountants, it is difficult for them to do their work from home. Travel to other branches of a company or organization may be required. A standard 40 hour work week is common, but longer hours and overtime may be required, especially if important analysis is required on short notice.

Training and Qualifications

A minimum of a bachelor's degree in accounting, business, or a related field is required, along with appropriate training in management accounting. Certifications and higher degrees, or more advanced study, can help someone looking for management accounting jobs broaden their career options. It's possible to find colleges and universities offering specialty programs, which may include management accounting. These will also improve prospects for this kind of job. It may also be possible to receive a two year degree in accounting or bookkeeping, and work up to a management accounting position over a period of many years. This can be difficult, but may be an option for job applicants who have accounting experience, but little formal education.

Licensure as a Certified Public Accountant (CPA) will probably also be required, since this is necessary to file a report with the Securities and Exchange Commission. If a person is working on behalf of a company registered with the SEC, these reports will be necessary. To become a CPA, a national exam must be passed, and state requirements for licensure must be met. As of 2007, 42 states, as well as Washington, DC, required 150 semester hours of college coursework to receive a CPA.

This is more than the usual bachelor's degree requirement, and several colleges have altered their curricula to match it. Many offer a master's degree as part of the 150 hours. Anyone thinking about going into management accounting should carefully look at school curricula and the requirements of states in which they wish to be licensed.

The examination for becoming a CPA is the same in all states - all use the same four part Uniform CPA Examination created by the American Institute of Certified Public Accountants. This rigorous examination is passed by less than one-half of students on the first try. Candidates do not have to take all four sections at once, but most states will require passing all four sections within 18 months of passing the first section. Continuing education is required by most states to renew CPA licensure.
In addition to training and licensure, anyone interested in management accounting should have good analysis skills and a high mathematical aptitude. They must be able to quickly and easily compare and interpret facts and figures, and to then communicate the results of their work to management personnel, in order to help them make their decisions. Standard accounting procedure familiarity is important, but management accounting candidates must also understand the specific needs of the organization they will work for, and the standards of their field.

Advancement Prospects and Salary Expectations

Management accountants often start as trainees, junior internal auditors, or cost accountants. As they rise through the ranks of their organization, they may be put in charge of specific departments, or even become treasurers, controllers, vice presidents, or chief financial officers. Many important positions in business are filled by people who have an accounting background.

Stricter accounting and auditing practices for corporations and other organizations is expected to result in a significant growth across the accounting job sector, including management accounting positions. The best prospects are for CPAs and any accountant with certifications or degrees in excess of the minimum. Management accounting professionals can expect to earn around $50,000 per year, with salaries changing depending on location and job responsibilities.


Management accounting is a growing profession with a good future for anyone willing to develop the training and experience required to enter it. It's most commonly entered by people who already have accounting related positions, and is a position that most candidates are promoted to. The skills required for management accounting are specific, and great care is required when doing this work, as the decisions of entire organizations can rest on it.
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 accounting  organizations  curriculum  colleges and universities  formal education  asset management  groups of people  managers  responsibility  financial reports

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