How to Teach Management Accounting

To teach management accounting means not only to teach the analysis of financial statements and to instruct students for presenting useful accounting information but also to teach everything about accounting which is helpful for management decision making. Like, any other teaching planning, teaching of management accounting also requires to create step by step lesson plans for each topic of management accounting. Management accounting teacher should take some real life problems and try to solve them and show these solution as the part of his management accounting teaching.

1st Step : To Develop  Analytical Thinking in Students

It is the first step of teaching of management accounting that teacher has to develop analytical thinking in students. Students who are studying management accounting, already know how to make final accounts and what are the main accounting terms. But how can they analyze all these financial statements? They have to learn from you.

For developing analytical thinking, following things may be helpful :

a) To teach all the restrictive conditions.

b) To instruct all the alternatives.

c) Not to develop guess work.

d) Give some time to student to think the problem with fresh approach.

2nd Step : To Investigate the  Causes of Difference between Actual and Budget or Standard  Data

This is the second step to teach management accounting. In this step, management accounting teacher should take any accounting problem with its budget data or standard data. He should have all its variance. Now, teacher should investigate the cause of variance. Suppose, our record actual sale is 20% less than previous year. There may be 100 of reasons, if we deeply study it. This is just one accounting term, there are lots of accounting terms and we make lots of budget. All these items should be investigated. One side, this approach will make management accounting more practical and other side, student will get confidence if they investigate new reason of these causes.

3rd Step :  Motivating Students’ Participation

Teacher of management accounting should motivate students for participation in any discussion. One good tip is given in this PDF file which I am mentioning following quote:

In introducing budgeting topic, the teach should use to draw an organization chart of a manufacturing organization, and started with a question, “Which department should start a budget?” At the beginning, it may be puzzling for the students but after a couple of minutes different answers came up such as “finance and accounting department”, “production department”, “human resource department”, and “marketing department”. To
increase more students’ involvement, their answers were followed by another question asking who would support which answer. It made the other students think, and the result of thinking is learning. For the next step, the question would be about different targets between marketing department and production department, how to resolve them if the students were respective managers. The purpose was to set them enter in the role of managers and force them to think what they will decide if they were in managers’ place.

4th Step : Use of Multi-media in Teaching Managerial accounting

Without use of multi-media in teaching managerial accounting may not be successful. Teacher should use all latest multi-media technology for teaching managerial accounting. Making of PowerPoint slides, animated clips, video presentation and use of images and icon may make solution more easy to understand. One example is my past content Fund Flow Analysis's Image which was successful online for teaching students. I think, step by step teaching of management accounting topic through 10 minutes multi-media is better than one hour boring lecture.

5th Step : Use of Management Accounting Text Books

Teachers should learn lots of management accounting text books instead of one book first. It will be helpful to teacher to teach interpretation of financial information from different ways. Recently, I reviewed a new book of Management Accounting, 5/e which is written  by Atkinson in which, I learned new management accounting term incremental budgeting. Like this, there are lots of other new things whose knowledge can be obtained from different management accounting text books.