Management Accounting and Finance in U.K. Museums and Music Dissertation - 1

Management Accounting and Finance in U.K. Museums and Music Organisations - Dissertation Example The main functions that the manager carries out comprises of decision making, planning and controlling (Bhattacharyya, 2011; Chong, 2009). In order to execute their responsibilities in an effective manner the manager needs timely accurate information. Hence, information is a vital parameter in the success of a business and in order to provide appropriate information, managerial accounting identifies, gathers, measures, segregates and reports the information to the managers in such a way that management processes are fulfilled. Therefore, management accounting is the field of accounting that looks at providing information to the management. This information includes financial accounting, information related to decision making and planning, cost management, control, performance evaluation and determination of cost for the purpose of financial reporting. Management accounting consists of the reports that cater to the need of the management (Kulkarni and Mahajan, 2008). 1.2 Overview of M useum and Art organization The museums and art organizations that falls under the culture industry, has currently aroused the necessity of accounting but the dilemma persists regarding the methodology that should be used in order to measure the accountability. The debate remains whether for financial reporting, scientific collection, heritage and culture should be valued more and the extent to which accountability can be properly served by heavily emphasizing on the general purpose financial reporting alone. The debate related to accountability in the arts organization and museum is a subject of discourse for the last few decades. This has been further exaggerated by the need for viability in the art organizations and museum for ensuring long-term survival. Accountability... The study reveals that the organizations are now looking at additional sources of income by organizing events. The events that they are planning to launch are expected to generate high amount of income for the organization. The management of the art organization have decided not only to sell tickets of the events in order to generate revenue but also look for sponsorship of the event. In this context, before organizing any event the management is setting targets in form of budget for the whole event. This budget is set as such the expected expense that the organization will be incurring and income that they will be generating are estimated. This gives them a clear idea regarding the revenue that they will be generating. Accounting techniques like variance analysis, activity based costing, budgeting and other methods are used in order to conduct the management accounting efficiently. These methods have been proved effective in achieving the future goals of the organization. This revea ls that the art organization and museums are not only focussing on generating additional income but also creating satisfaction among the artists and the customers. This essay makes a conclusion that the main challenge for the art organization is that the economic crisis has affected the funding which is very important for the organizations that are not running for profitable ventures. These challenges have made the organizations to shift their focus from profit sharing model to profit generating model. On shifting to this model the accounting techniques used by the organization has also changed.