Management Accounting Theory And Risk Management Essay

1445 Words Dec 5th, 2015 null Page
Risk management is one of the most important and attractive process for manager to planning and making economical decision. According to Lees (Drury, 2015) there are three typical aspects to deal with risks. As a comprehensive theory and key component of risk management, Management Accounting plays significate roles in providing information usefulness to manger to cope risk which may be facing in the future. In this essay, firstly a brief introduction of what risk management is will be given and defined. Secondly how can management accounting theory be used during risk management process will be provided, contrasted and discussed. Moreover, what challenge management accountants face while providing such information to managers will be shown and discussed. Last but not least, a conclusion of this essay will be provided.
As a commercial organization, company aims to maintain its day-to-day operating and earn profits. Taken-for-granted, such roles converted to executive teams’ mission and split. However future is full of uncertainty and profits always come with risk and crisis which cause loss for company. Consequently it is necessary that mitigates risk while optimizing profits under limited recourses. Unfortunately such issues cannot be avoided as long as corporation is still operating. However its consequences can be managed and minimized and therefore this is the Risk Management’s objective in economic activities. XXX(XXX) Risk management’s objective is “to assure…

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