Part 2: Role of Management Accounting

9. Information within an organization can be analyzed into the three levels assumed in Anthony’s hierarchy:
strategic; tactical; and operational.

10. Management accounting developed from cost accounting. It is used for scorekeeping, directing
management attention and problem solving. It has since branched out into behavioral aspects.

11. A management accounting system comprises people with accounting knowledge, technology, records,
processes, mathematical techniques, reports and the users for whom those reports are prepared. The key
components of the system are: inputs, processes and outputs. It is used for strategic decision making,
performance measurement, operational control and costing.

12. Management accountants have responded to developments such as JIT, TQM and lean management
accounting by using techniques such as target costing, life cycle costing and Kaizen.

13. Organizational behavior is about the impact that individuals, groups and organizational structure have on
behavior within an organization and on that organization’s effectiveness or ability to create value.

14. Management accounting is a value added process which guides management action, motivates behavior
and supports the cultural values required to achieve an organization’s objectives.

15. For companies in many industries, sustainability involves developing strategies so that the organization
only uses resources at a rate that allows them to be replenished. At the same time emissions of waste are
confined to levels that do not exceed the capacity of the environment to absorb them.

16. The term ‘sustainability accounting’ encompasses a range of new accounting and reporting tools and
approaches which are part of a transition towards a different kind of organizational decision-making focused
not just on economic rationality, but consistent with ecological and social sustainability.