Strategic cost management as the main component of strategic management accounting

Abstract

The influence of cost management on making management decisions and functioning of the system of strategic management accounting was analyzed in the paper. The main aspects of the influence of strategic management accounting on making effective management decisions in the system of integrated management of business entities were highlighted. The scope of the organizational activity, covered by the strategic management accounting was described.The paper shows the orientation of strategic management accounting towards the formation of the system of modern knowledge, which combines accounting concepts of making effective management decisions with the purpose of formation of business strategy of business entities, aimed at ensuring steady competitive advantages in the business environment. The combination of all these advantages allows economic entities to apply business strategies of various organizational levels in practice.The measurement of quality costs and the preparation of corresponding reports are key functions of the system of management accounting both for industries and service sectors. In both cases, the management accounting system must be able to provide both operational and financial information concerning the quality, including such information as the quantity of defects, reports on the quality costs, reports on the quality costs tendencies and report on the execution of budgets of the quality costs.The systems of management accounting in a broad sense can be classified as the accounting systems at function-oriented management and accounting systems in the management of kinds of activity. Both of these approaches can be applied in practice.