Management And Accounting Web

Management Accounting: Concepts,
Techniques & Controversial Issues

Exhibit 2-4
Four Functions of Information or Cost Accounting Systems


Provided by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida

MAAW's Textbook Chapter 2 | MAAW's Textbook Main page

Exhibit 2-4
Characteristics and Requirements Related to the
Four Functions of Information or Cost Accounting Systems
Characteristic or Requirement

External
Financial Statements

Planning & Controlling
Activities or processes
Short Term
Strategic Decisions
Long Term
Strategic Decisions
Audience 1. Outside investors, creditors, IRS and SEC. 2. Plant, production and operating managers, and workers. 3. Marketing, product, business and senior managers. 4. Marketing, product, business and senior managers
Type of information required Aggregated quantitative overall financial results. Disaggregated quantitative and qualitative non-financial information on specific activities and processes. Disaggregated quantitative and qualitative financial and non-financial information on specific products, services, customers and suppliers. Disaggregated quantitative and qualitative financial and non-financial information on specific aspects of the company's competitive strategy.
Reporting interval required Quarterly. Real time, hourly or daily. Annual or life cycle unless product design or process changes. Special studies performed periodically.
Decision Examples Should an investor purchase, or dispose of the stock or bonds of this company? What resources are needed for the period? Are specific processes in control? Should the company continue producing current products and services? What prices should be charged for products and services? Should the company replace a machine, build a new plant, reengineer a product or process, convert to a JIT system?