Ans :
The advent of management accounting was the next logical step in the developmental
process. The practice of using accounting information as a direct aid to management is
a phenomenon of the 20th century, particularly the last 30-40 years. The genesis of
modern management, with its emphasis on detailed information on decision-making,
provided a tremendous impetus to the development of management accounting.
Management accounting is concerned with the preparation and presentation of
accounting and controlling information in a form which assists management in the
formulation of policies, and in decision-making on various matters connected with
routine and/or non-routine operations of business enterprise. It is through the
techniques of management accounting that managers are supplied with information
that they need for achieving objectives for which they are accountable. Management
accounting has, thus, shifted the focus of accounting from recording and analysing
financial transactions, to using information for decisions affecting the future. In this
sense, management accounting has a vital role to play in extending the horizons of
modern business. While the reports emanating from financial accounting, specially for
outsiders, are subject to the conceptual and legal framework of accounting, internal
reportsroutine or non-routineare free from such constraints.
