Cost Accounting: Its role and ethical considerations Essay -- Business

be report Its role and ethical considerationsIntroductionAccounting is the process of identifying, measuring, andcommunicating economic information about an entity for the purpose ofmaking decisions and informed judgements. The major areas of withinthe news report are Financial Accounting, managerial Accounting/ wooAccounting and Auditing- Public AccountingManagerial business relationship is concerned with the routine of economic andfinancial information to plan and defend the activities of an entityand to support the management in planning and decision-making process.Cost score is the subset of managerial accounting and it military servicesmanagement in determination and accumulation of product, process orservice cost.Role of Cost AccountingIncreased competition and groping business conditions have putsignifi freightert pressure on somatic management to make informed businessdecisions and maximize their company?s financial performance. Inresponse to this pressure, a range of management accountingtools and techniques has emerged. One of the most important tools thata management can use is - Cost Accounting. Cost accounting swear outsmanagement in making strategical decisions by identifying anorganization?s comparative strengths and weaknesses and a better shipwayto use, improve or eliminate them. Cost information is used for many another(prenominal)different purposes Performance measurement Cost reduction and control ending of reimbursement and fee or price displace Program authorization, modification, and discontinuation decisions and Decisions to beget out work or make other changes in the methods of employment or delivery of services.Cost accounting provides various tools for example Cost-benefitanalysis, break-even analysis,and CVP to help management in making decisions.Role of Ethics in Cost AccountingWebsters Dictionary defines ethics as ...the principles of conductgoverning an idiosyncratic or a profession the discipline dealing with what is good or bad or right and wrong, or with moral duty and stipulation a particular theory or system of moral determine. Ethics arevery important in any field. In cost accounting also ethics play animportant role. respectable situations can easily arise in any businesssetting when money is involved. . The whole Enron saga was the result... ...g is an important tool that can help management inmaking informed decision. Though it is not licitly required but stillit is necessary to run an entity resolutionively. Cost accounting isturned toward the future. There are different methods of cost inCost Accounting Absorption costing and Variable costing. Both have close to merits over the other.An entity can use both of them for different uses. Absorption costingcan be used for external reporting, managers need to review the effectof their decision on financial reporting to outsiders whereas Variablecosting can be used by managers to review the effect of managementdecisions on product ion, costs and profits.ReferencesAbsorption, Variable, and Throughput Costing. Retrieved on December15,2004 fromhttp//www.kellogg.nwu.edu/faculty/balachan/htm/Acct439/Solutions/solution_manual19.docHilton, Ronald W Cost Management Strategies for profession Decisions,Second EditionMarshall Accounting, What the Numbers Mean, Sixth Edition 3-8Turner, Robert M Ethics and professionalism the CPA in industry,April1990. Retrieved on December15, 2004 from http//www.nysscpa.org/cpajournal/old/08416230.htm