FINCMA

Cost Accounting Reporting System deals with the process of tracking, measuring, recording, and classifying the appropriate allocation of expenditure (financial and non-financial) for the determination of the cost of a product or service in an organization and for the presentation of suitably arranged data for the purpose of control and guidance of management. Costs are measured in terms of Direct Costs, Indirect Costs, and Overhead or Absorbed Costs.

The strategic planning of an organization specifies the direction (type of businesses and markets to enter and how to compete in the market) that the organization intends to take over the long-term to meet its objectives. Strategic planning draws on a wide range of management accounting information from costing, budgeting, and performance measurement systems, as well as information from analytical studies, both external and internal to the organization. The implementation of the strategy requires the management accounting system to link the long-term plans to the budgeting system, to produce annual budgets that support the organization’s strategies. With cut-throat competition in the marketplace, well-managed organizations focus their objectives and strategies on building and maintaining sources of competitive advantage. Thus, Management Accounting Systems contribute to improving the organization’s competitive advantage in terms of quality, delivery time, flexibility, innovation, and cost through modern process improvement and cost management techniques. It also provides information to help manage resources, through systems for planning (e.g., budgets) and control (e.g., performance measures).