Types of Accounting: Management Accounting

Management (internal) management accounting is the type of accounting that contrasts with (external) financial accounting. To be able to go deeper we will begin by reviewing birth and evolution over the years. If we take into account the research of Robert Kaplan, Accounting Management was born as a type of accounting in the early nineteenth century because of the increasing complexity in organizations or companies.

At the beginning of century XX appear the first integrated companies like for example Du Pont Powder Company . In this case the Du Pont executives invented the return-on-investment formula that gives a success coefficient to each department of the company. The usefulness of this new strategy was in particular for the high positions since in this way decisions could be made of an easier form although it increased the number of operative units of the company

Accounting Management is within the types of accounting that produces information primarily for internal use of the management of the company. The information collected is generally more detailed than that produced for external use. In this way the management accounting allows the effective control of the organization and the fulfillment of the strategic objectives and objectives of the entity delimited by the CEO. The information can be found in annual budgets and forecasts, allowing the company to plan optimally for its future can also include an evaluation of the results of previous years. The form and content of reports produced by cost accounting is exclusive to the management of the company.