Management Accounting: Effect Decision Making

INTRODUCTION: Today, the importance of management accounting is spreading all over the world. Even small or large, more and more companies are asking management accounting to operate the business. Unlike financial accounting used to measure company financial performance, managers use management accounting to make long-term decisions. In addition, by understanding the practical skills of management accounting, mobilizing management accounting and contributing to company goals and objectives, ultimately it will develop effective unit functions (Ahrens & Chapman, 2007) .

According to the Association of Management Accountants (IMA), it states as follows. "Management accounting includes expertise in financial reporting and management, including management decision making collaboration, design planning and performance management system Strategy" Management accountants (also called management accountants) Consider the events occurring in and around the business while taking into consideration. As a result, the data and the estimate became clear. Cost accounting is the process of converting these estimates and data into knowledge that ultimately will guide decision-making.

An effective accounting information system provides management information for decision making. By management decisions, you can develop an accounting information system strategy for an organization that is designed to support the organization's strategy. Michael Porter proposes two basic strategies. It is a product differentiation strategy that enhances the ability to charge customers at high prices and a low cost strategy to help identify producers of effective resources. Mr. Michael Porter believes that there are three basic strategic positions: strategies based on mutually unconstrained, often overlapping diversity, demand based strategies, and visiting strategies.

Traditionally, the role of accountants in companies included implementing and maintaining operational management, providing analysis support for strategic planning and decision-making, and establishing an effective risk management process. Therefore, the role of the accountant in the enterprise is very important for financial soundness, as well as the reputation and reliability of the corporate organization and its management. The value of the accountant is measured not only for their own organization, but also more importantly to the extent considered accountable to the public. Their ability to keep performing these obligations in the face of ongoing environmental changes is important for their continued relevance.