Management Accounting
Management Accounting Checklist
The role of management accounting in strategic management
Dividend policy
Dividend policy can have a huge impact on the financial health of a company. It affects liquidity, the cost of capital and the market value of shares. Retained earnings are a most important source of finance. A balance needs to be struck between shareholder and market expectations and financial efficiency. Management accounting will help arrive at an optimal solution for dividend payments.
The role of management accounting in risk management
Management accountants are trained in analysis and control and have an important role to play in the identification and management of risk. They can assist managers in prioritising business risks, evaluating them and determining the extent to which they can be controlled or mitigated. Risk is inherent in all business activities and, generally, the greater the risk the greater the potential return or loss. Some risks are not at all obvious and can catch a business by surprise. Management accounting provides a series of tools and techniques that help identify and evaluate risks. A risk-based approach to managing an enterprise (such as ERM - Enterprise Risk Management) attempts to provide an explanation of risk to various stakeholders in an organisation by identifying events that might occur in the pursuit of organisational objectives and assessing their probability and financial or other impact.
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