Cost accounting refers to the process of comparing the value of the assets and liabilities. The concept behind this process is that an asset’s worth is equal to the value of the liability. The process is then translated to a cash flow statement to show how the income or loss is determined for any given period. The accounting profession is one of the highest paid professions, with a typical annual salary in the six-figure range. Most accounting jobs require at least five years of experience and certification.
As a certified professional accountant, you will learn the principles of cost accounting. There are four main methods of costing the organization. These include: internal control, external control, internal allocation and public sector cost. Internal control is the method where you use documents, systems and policies designed to provide reasonable assurance that all expenses incurred are properly accounted for. External control involves the use of controls and procedures designed to ensure that expenses are incurred only through authorized means.
Most MBA Cost Accounting programs will teach both theory and practical concepts in addition to accounting. Most of these programs will focus on areas such as internal control, financial reporting, and tax compliance, as well as teaching students how to effectively communicate with other professionals and managers.
There are specific subjects required for each area of accounting and these include, but are not limited to, economics, finance, law and accounting principles, risk management and financial management, among others. The curriculum covers topics such as accounting basics, analysis, ethics, public policy and management decision making in addition to the major subjects.
Many employers, such as investment banks and insurance companies, prefer to hire students who have taken their MBA Cost Accounting program, as it proves that their candidates are knowledgeable about financial matters. It also shows their ability to effectively communicate with a variety of people in both an academic and a business environment. This helps them to be effective communicators in their position.
To get into an MBA Cost Accounting program, the student needs to have a minimum of two years of work experience. They will need to have completed the undergraduate degree requirements with an average GPA of 3.0. The course work is usually divided into six to twelve semesters. During the first two semesters, the students are taught how to create a balance sheet, organize financial statements, and manage accounts receivable and accounts payable.
On the final two semesters of the course, the students are taught how to develop and maintain the business accounting system. These courses include planning and implementation of the accounting systems to maximize profits and reduce costs.
Another area covered in the program is financial management. The students learn how to implement accounting and financial management techniques in the company. They also learn how to develop and maintain a balanced budget and how to determine financial feasibility.
Financial management and bookkeeping skills are also taught. In addition, students learn how to effectively use a budget and financial tools, such as software. They learn how to prepare a detailed financial statement and to support their proposal for grants and loans. The students learn how to create financial plans and determine their expected ROI or return on investment.
The courses cover topics like forecasting, financial management and the accounting of the business operations. These classes are not just for those in the MBA program, but they can also be used by those with other degrees such as masters, bachelor, and even bachelor degree programs.
In order to master financial management, MBA Cost Accounting students must complete a minimum of five credit hours on the following topics: Principles of Business; Financial Management; Bookkeeping; Accounting Principles; Analysis, Ethics and Public Policy; Fundamentals of Accounting; Fundamentals of Finance; Risk Management and Financial Planning; Financial Accounting. Other classes such as Financial Planning and Budgeting, Marketing, Business Law, Human Resources Management, Marketing Strategies and Administration are also covered in the course curriculum. All subjects are taught by experienced MBA Cost Accountants and are taught in a hands-on environment.