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Control is a function of management that helps to check errors and take corrective actions. This is done to minimize deviation from standards and ensure that the stated goals of the organization are achieved in a desired manner.
In accounting, the controlling account (also known as an adjustment or control account [1]) is an account in the general ledger for which a corresponding subsidiary ledger has been created. The subsidiary ledger allows for tracking transactions within the controlling account in more detail.
Internal control, as defined by accounting and auditing, is a process for assuring of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies. A broad concept, internal control involves everything that controls risks to an organization.
A function of management accounting in such organizations is to work closely with the IT department to provide IT cost transparency. [15] Given the above, one view of the progression of the accounting and finance career path is that financial accounting is a stepping stone to management accounting. [16]
In other words, it serves, as the functions of controlling, planning, decision making in the management level setting. [2] [3] In a corporate setting, the ultimate goal of using management information system is to increase the value and profits of the business. [4] [5]
In financial accounting, cost classification based on type of transactions, e.g. salaries, repairs, insurance, stores etc. In cost accounting, classification is basically on the basis of functions, activities, products, process and on internal planning and control and information needs of the organization.
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One of the first authors to define management control systems was Ernest Anthony Lowe, Professor of Accounting and Financial Management at the University of Sheffield, in his 1971 article "On the idea of a management control system." He listed the following four reasons for the need for a planning and control system: