Management Accounting
Management Accounting Checklist
The role of management accounting in risk management
Once risks have been prioritised then control can be exercised. However, some risks are less easy to control than others. Some risks may be neither controllable nor avoidable. Management accounting provides a framework for the classification and better understanding of risk. Some risks may be very likely to occur but only have a low impact on business performance or results. Other risks may be less likely but have a much greater impact on the business. Some risks could be highly probable and also have a high impact on results. Risks can be plotted against their probability in order to determine where most management attention should be focused in order to avoid or limit damage.
Potential Pitfalls Managers should avoid:
solving the wrong problem really well getting 'bogged down' with irrelevant information using the numbers without doing a reality check complex spreadsheets with embedded errors
Future Practice Owner.
Made with FlippingBook interactive PDF creator