Introduction
The purpose of management accounting is to assist management in running the business in ways
that will improve the performance of the business.
Data and information
‘Data’ means gathered and stored facts. Data consists of numbers, letters, symbols, raw facts,
events and transactions which have been recorded but not yet processed into a form suitable for
use.
Data has no clear meaning until it is processed – analysed and sorted – into information.
Information is data which has been processed in such a way that it is meaningful to the person
who receives it (for making decisions).
Information is provided to management to assist them with planning, controlling operations and
making decisions. Management decisions are improved when they are provided with better
quality information.
What makes good information?
Good quality information should:
• be Accurate
• be Complete (but not excessive)
• be Cost effective (should cost less than the savings to be made)
• be Understandable (to whoever is using it)
• be Relevant (to the decision being made)
• be Accessible ( i.e. communicated by an appropriate channel (for example, be printed or
be sent electronically)
