Citation
Singhania, A.K. (2024), "Book review: Management accounting for decision makers", Rajagiri Management Journal, Vol. 18 No. 3, pp. 271-272. https://doi.org/10.1108/RAMJ-07-2024-294
Publisher
:Emerald Publishing Limited
Copyright © 2024, Abhisheck Kumar Singhania
License
Published in Rajagiri Management Journal. Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode
Management Accounting for Decision Makers, tenth edition, is an extensive guidebook tailored not only for accounting professionals or students but also for corporate managers and business owners who may not have any accounting education or degree. This book covers a broad range of topics on management and cost accounting for understanding the process of decision-making. Considering the customer as the king and analyzing and interpreting accounting data, businesses can gain valuable insights for profitable decision-making. While this book binds the readers with its real-world examples, its figures and activities make the concepts easy to understand. With over 600 pages in length, it is a comprehensive guide for anyone seeking to develop their businesses with decision-making and management skills.
This book is an excellent resource suitable for individuals at various levels of expertise and experience, spanning from graduate and postgraduate students to accounting professionals, corporate managers and business owners. It provides comprehensive and well-articulated insights and practical guidance in the field of management accounting. For graduate and postgraduate students, the book aligns with their learning objectives and addresses their questions effectively. The authors have meticulously ensured that the content remains current and pertinent to recent developments in the field, making it an exceptional resource for students aiming to enhance their understanding of management accounting.
The main content of the book is organized into 12 chapters, each of which explores different aspects of management accounting. The chapters are carefully crafted to provide readers with a deep understanding of management concepts and their impact on decision-making. This book contains a wide range of topics, including cost-volume-profit analysis, full costing, budgeting, making capital investment decisions, managing risks and managing working capital, among others. Each chapter starts with an introduction, which highlights the questions addressed in the chapter and their learning outcomes. At the end of each chapter, readers will find a summary, critical review questions and exercises at the basic, intermediate and advanced levels that invite readers to consider the implications of the material covered in each chapter.
The book commences with an introduction to the pivotal role pf management accounting in business organization and strategic decision-making. Chapters 2 to 5 concentrate on cost analysis and management, elucidating concepts such as relevant costs, cost-volume-profit analysis, full costing and costing in competitive environments. These chapters underscore the significance of precise cost determination and the implementation of effective cost management strategies.
Chapters 6 and 7 address budgeting and accounting for control, emphasizing the linkage of budgets with strategic plans, their role in exercising control and variance analysis for performance assessment. The chapters elucidate the diverse types of budgets, control mechanisms and standard costing practices. Chapters 8 and 9 delve into capital investment decisions and risk management, discussing investment appraisal methods like average rate of return (ARR), payback period (PP), net present value (NPV) and internal rate of return (IRR). They stress the necessity of factoring in the time value of money and adopting efficient risk management strategies.
Chapters 10 and 11 explore strategic management accounting and divisional performance measurement. They encompass evaluation metrics beyond financial indicators, such as the balanced scorecard and economic value added (EVA), and discuss divisional performance, transfer pricing and non-financial performance measures. Lastly, Chapter 12 focuses on managing working capital, encompassing topics such as inventories, trade receivables, trade payables and cash management. It offers insights into inventory management strategies, credit policies and cash budgeting techniques.
After the end of the chapters, the book provides a glossary of the key terms used in the chapters, followed by solutions to self-assessment questions, critical review questions and selected exercises. The book concludes with the author’s biography, which reveals their expertise and academic experience in accounting and business management.
While “Management Accounting for Decision Makers” offers a comprehensive exploration of key management accounting topics, there are notable omissions that could enrich its coverage. Additional areas essential for informed decision-making include strategic cost management techniques like target costing, non-financial performance measurement methods such as key performance indicators (KPIs) and lean accounting principles for waste reduction and process efficiency improvement. Moreover, sustainability accounting, decision analysis and risk management strategies like scenario analysis and Monte Carlo simulation are pivotal for addressing environmental and social impacts, evaluating alternative courses of action and managing uncertainties effectively. Lastly, a deeper dive into performance management systems, encompassing goal alignment, feedback mechanisms and continuous improvement practices, would enhance the book's utility in guiding organizations toward strategic objectives. Integrating these topics would offer readers a more comprehensive understanding of the role of management accounting in facilitating informed decision-making and driving organizational success.
This book provides an excellent primer on management accounting for decision-making. It provides readers with the necessary knowledge to understand the concepts and apply them in a variety of business environments. Overall, “Management Accounting for Decision Makers” is an essential read for anyone seeking to deepen their understanding of management accounting principles and their practical implications in contemporary business environments.