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Question 3 (10 marks) Introduction to management accounting You are a financial accountant at Hardware Superstore...

Question 3 (10 marks) Introduction to management accounting You are a financial accountant at Hardware Superstore Ltd. One of the trainee accountants, Ellen, is currently enrolled in two university subjects – one subject on management accounting and one subject on financial accounting. She is wondering why companies, such as Hardware Superstore Ltd, need to employ both management accountants and financial accountants. She asks you: “Why can’t companies just prepare one set of financial statements? The financial reports prepared by the financial accountant should give managers all of the information needed to run the business – as they provide information about profits; assets, liabilities and equity; and cash flows... so I don’t really understand why we need management accountants.” She has also been pondering something one of the management accountants said to her the other day: “Don’t go into financial accounting! Financial accountants are a liability to companies... they just cost the company money, whereas management accountants on the other hand are an asset... they add value.” Required: Prepare a response to Ellen, responding to her questions and comments, and the comment made by the management accountant.

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