Complete Scheme of Work on Management Accounting at Level 3

One essential requirement in running and managing of an organisation is the need for clear, relevant
and accurate information. In particular, an organisation needs accounting information that gives a complete
picture of all financial transactions that have taken place and the current financial position of the organisation.
Accounting information is vital to the owners and managers of business organisations, and there are often
other stakeholders who have an interest in the financial performance and position of the business.
At an organisation’s financial year-end, the accountant will prepare financial statements including a trading and
profit and loss account and a balance sheet. The system that provides all the information for these final accounts
is known as the accounting system.
The quality and accuracy of the information presented in the final accounts depends entirely on using an
effective accounting system correctly. Beginning with the source documents that show financial transactions,
accounting staff will need to classify and encode the information before inputting the details into the system.
Manual accounting procedures, using double-entry bookkeeping, have been in operation for over 500
years. The system is still effective in providing managers with an analysis of income, profits, expenses, losses,
assets and liabilities. However, organisations need information quickly and manual systems can be slow.
Computerised accounting packages are based on double-entry principles and will give informative reports
in a matter of seconds.
Organisations will adopt the most suitable accounting system for their resources and needs. System users will
need training and, if the computerised option is chosen, hardware and software are essential requirements.
Whichever system is chosen, the year-end task of preparing the final accounts remains the same. Organisations
rely on effective control of resources including cash. Most organisations depend on making a profit. The
accounting system is an integral part of managing money so survival of an organisation depends on that system.