Accounting for Managers: Interpreting Accounting Information for Decision Making, 4th Edition

Part I

Context of Accounting

Part I describes the context and role of accounting in business and provides some theoretical frameworks. It is hoped that this will offer a foundation for readers’ understanding that accounting is more than a technical subject. Accounting presents a particular view of the world, but by no means the only view of the world. As such it has strengths, but also weaknesses. Accounting itself is grounded in competing theories, and these theories are derived from various historical, political, economic and social roots. The theoretical framework presented in Part I should help to make the subject more meaningful to students and practitioners alike.

Chapter 1 provides an introduction to accounting, and an overview of accounting history as well as describing how the role of accounting has changed, including the influence that this changed role has had on non-financial managers. Chapter 2 describes the context in which management accounting operates: the capital market emphasis on shareholder value, as well as the business context of corporate governance and company regulation.

Chapter 3 describes how transactions are recorded by accounting systems and the principles that underlie the preparation and presentation of financial statements.

Chapter 4 covers the traditional theoretical approach to management control, which encompasses management accounting and performance measurement.

Chapter 5 offers alternative perspectives on the role of accounting. The theoretical ...