Page 265 - DCOM302_MANAGEMENT_ACCOUNTING

Management Accounting

Notes 4. Basis of Comparison: The information supplied through reports will be more useful when

it is supplied in comparison with past figures, standards set or objectives laid down. The
decision-making authority will be able to make use of comparative figures while making a

decision. Corrective measures can also be initiated to improve upon past performance.
5. Reports should be Clear and Simple: The information should be presented in a clear
manner by avoiding extraneous data. Only relevant important information should become
the part of a report. If supporting information cannot be avoided, then it should be given
in appendix or separate chart should be attached to it.
The method of presenting information should be such that it attracts the eye and enables the
reader to form an opinion about the information. The graphic presentation of information

will enable the reader to find out the trends and also to determine deviations more quickly
than in other methods. The arrangement of presentation should be brief, clear and complete.
Simplicity is a good guide for reports preparation.
6. Cost: The benefits derived from reporting system must be commensurate with the cost

involved in it. Though it is not possible to assess the benefit of this system in monetary
terms, there should be an endeavour to make the system as economic as possible.
7. Evaluation of Responsibility: The reporting system should enable the evaluation of

managerial responsibility. The targets are fixed for various functional departmental heads.
The record of actual performance is monitored along with the standards so as to enable
management to assess the performance of different individuals. So, management reporting
should be devised in a way that it helps in evaluating the work assigned to various persons.
Self Assessment

Fill in the blanks:
1. A good reporting system is helpful to the management in planning and …………………

2. A good reporting system should have a proper flow of …………………

3. The ………………… of information will enable the reader to find out the trends and also to
determine deviations more quickly than in other methods.
4. The decision-making authority will be able to make use of ………………… fi gures while
making a decision.

5. Accuracy should also not involve ………………… of preparation nor it should be achieved

at the sacrifice of promptness of presentation.
14.2 Introduction to Management Information System (MIS)

Management Information System can be developed as an act of interrelated components that
collect (or retrieve), process, store and distribute information to support decision-making,
coordinate and control in an organisation.

14.2.1 Attributes of Information

For information to be useful to managers, it must possess certain attributes. Some of the important
attributes are accuracy, timeliness, relevance and completeness.

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