Management accounting principles (MAP) were developed to serve the core needs of internal business
managers to improve decision support objectives, internal business processes,
resource application, customer value, and capacity utilization needed to
achieve corporate goals in an optimal manner. Another term often used for
management accounting principles for these purposes is managerial costing
principles.
The
two management accounting principles are which are not following GAAP(Generally
Accepted Accounting Principles) :
1. Principle
of Causality (i.e.,
the need for cause and effect insights) and,
2. Principle
of Analogy (i.e.,
the application of causal insights by managers in their activities).
These two principles serve the management accounting community and its
customers – the managers of businesses. The above principles are incorporated
into the Managerial Costing Conceptual Framework (MCCF) along with concepts and
constraints to help govern the management accounting practice. The framework
ends decades of confusion surrounding
management accounting approaches, tools and techniques and their capabilities.
The framework of principles, concepts,
and constraints will drive the classification of management accounting
practices in the profession to "enable a better understanding both
inside the profession and outside, of the compromises that result from
inappropriate principles".Without foundational principles, managers
and accounting professionals have no consistent footing on which to challenge
or evaluate new theories of methods for managerial costing.
'Generally Accepted
Accounting Principles - GAAP'
The common set of accounting principles, standards and
procedures that companies use to compile their financial statements. GAAP are a
combination of authoritative standards (set by policy boards) and simply the
commonly accepted ways of recording and reporting accounting information.
Generally accepted accounting
principles (GAAP) refer to the standard framework of guidelines
for financial accounting used in any given jurisdiction; generally known as accounting standards or standard accounting practice. These include the
standards, conventions, and rules that accountants follow in recording and
summarizing and in the preparation of financial statements.
Management
accountig provide these principles and
information which are pertial mentioned by GAAP not perfectly. So, in this
sence I agree with this statement.
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