Management Accounting - Paper F2

It is quite some time since I have written a blog for the ACCA web and now when I decided to write up my blog for January, I thought of focusing on the topics of Management Accounting and Costing, which are and have always remained my favourites as a student.

Management Accounting is a branch of accounting which is future-oriented and helps managers and those within the organization to take business decisions. On the ACCA syllabus, students are first introduced to Management Accounting and concepts in costing on Paper F2. The knowledge from this paper is used further in Paper F5 (Performance Management) and finally the student has an option of taking up paper P5 (Advanced Performance Management) as an option.

Working in an educational/training organization now, I would certainly say that many students are initially bit frustrated with Paper F2 as they are introduced to the fundamentals of costing and management accounting as they have very little prior knowledge or understanding about the basic concepts on this paper. On the same note, I believe students tend to be more comfortable with the conventional Financial Accounting paper – F3, as the basics of Financial Accounting have often been introduced to students coming in at the Fundamental level, either after completion of high school or after satisfying the eligibility criteria set for enrolling oneself on ACCA.

But I have also noticed that as students get to appreciate and understand Management Accounting and its practical applicability their interest in the subject picks up and they tend to enjoy learning this subject. Based on my limited experience, a small piece of advice to all of you studying for your Fundamental Knowledge paper F2 – “. In order to enjoy studying paper F2 or any other management accounting paper it is essential that you appreciate the practical utility of this magnificent branch of accounting. The more you tend to relate the concepts you study on this paper to real-life/ work the more interesting the subject and the process of learning becomes”. Perhaps the same approach may be extended to other areas of accounting as well but personally I have believed that costing and Management accounting can be more easily related to real-life than other branches.

The value that we as accountants can add with our knowledge and understanding of Management accounting cannot be better illustrated than with the example of the latest development in the Motor car industry – “TATA NANO” – the $2500 car from India. Having read some articles and seen clippings on the process behind developing the car I was made to understand that a major role in the development of this car was played by Management Accountants, through their expertise and advice on cost-reduction and in achieving a target-cost.

 

The economy at large is in need of innovative & inventive accountants, who can with the application of their technical accounting knowledge influence every walk of life.

Comments

[Management Dissertation]

well its soo good to see this information in your post, i was looking the same but there was not any proper resource, thanx now i have the thing which i was looking for my research.

[Vignesh]

Thanks for your comments Majid!

Regards
Vignesh

[Majid Ghauri]

Well-done Vignesh
You have perfectly laid the importance of Management Accounting. After reading this blog, I am sure that the student will find it interesting and will enjoy studying it.

[Sukran Al]

I am Sukran. 21 Years Old.
I am doing my BBA.
I want to do ACCA.
There are some step of ACCA.

01. In
02. Im
03. Ad
04. K
05. S
06. E
07. O

So, where from I will start my ACCA?

[Gabriel]

F2 is difficult. We all agree on that, however there are some fundamental facts that should be known by every accountant. Management accountant role on the otherhand is the more preferred and accepted. So I guess popular opinion will determine the future.

[Sara]

Management accountant role is tough and more demanding than financial accountant.

[Sara]

F2 is a difficult paper. How many would agree?

Management accountant role is future oriented.

[Vignesh]

Santosh,

Thanks for your comments.
Appreciate your input in the future also.

Regards,
Vignesh

[Santosh Puthran]

To pass Management Accounting paper one has to be very clear about the fundamentals and apply the same in practical situation. Management Accounting is closer to business.Management accountants are expected to play an advisory role is helping the business.

[Vignesh]

Hi Shubhechchha,

Preparing for an exam, I believe is more of selective and effective learning rather than spending hordes of time!

Although as a future professional you are expected to be aware of all the contents examinable, only certain very important topics and tested regularly and merely from an exam perspective you need to focus on these.

Ofcourse, you should also find some time to read thru and acquire knowledge on the ' not so important' areas for the examination - for the purpose of your career.

Good luck for your papers!

Vignesh

[shubhechchha]

Hi I have finished high school and I am 19 yrs old. I wanted to ask you, I want to do ACCA papers f1 & f2...and also acadenmic courses like bba\bbs, so is it hard to manage time for both of these whilst studying for a masters as well? Do you work fulltime in the office, so how do u manage time for both?