Current Issue in Management Accounting

Topics: Management accounting, Management, Cost accounting Pages: 19 (6093 words) Published: March 16, 2013
*Accounting Today
Firms Must Change Together -- or Fall Apart
By Danielle Lee
Whether firms manage, lead or ignore them, big changes are a foot in the accounting profession, and the best course of navigation will be collaborative. That journey begins with communication *Accounting And Finance Current Issues In Management Accounting Accounting Essay Performance measurement is the process to use the parameters to measure the performance of the organization. This process of measuring performance often uses the statistical evidence to determine progress toward specific defined organizational objectives. The purpose of the measurement is to improve the performance of the entity. Performance measurement is to evaluate how well of the entity. It is to formulate a clear, coherent mission, strategy and objectives. Only in an idealized world, an organization with unlimited resources and risk-free living environment, the future can be safely predicted that they would be redundant. Based on this information, management can analysis the data and find out the problems of the entity and make the entity more effectiveness and efficient. Effective measurement can ensure the management has a control for their subordinates. Particular action can be done after the controls. Budget is the rough tools in improving performance. The achievement of output and outcome is to determine the efficiency of the entity. It may include productivity and cost-data. The motivation of the employee is also important. The use of performance measurement including targets and goals to achieve, it can focus on the employee’s thinking and their work performance. When the goals achieved, Celebration helps to improve performance of the employee, it brings attention to them. Measurements are used for learning. It acts as indicators to the managers, managers use analysis of performance in measurements to related areas by revealing irregularities and deviations from expected data results. Learning will be occurred when organizations have problems in operations or failure of goals. The entity improves by analyzing the data and finds out the solutions. All the works need to measure otherwise organizations do not know where to improve. Work will be under controls and manage after measurement of performance. Performance measures are often used to increase the competiveness and profitability of entities via support and encouragement of improvements. There are many methods to have a measurement of organization. Management Accounting and Financial Accounting are two of the performance measurement. Management Accounting

Management Accounting concerned in the provision and the use of accounting information to managers of the organizations to analysis the data, provide the basis to make informed business decisions that will have controls functions and better equipped in management. It is use for planning, evaluating and control within an entity and to assure appropriate use of and accountability for its resources. Management accounting also includes the preparation of financial reports for shareholders, creditors, investors and public for decision making and investment. According to The American Institute of Certified Public Accountants (AICPA), management accounting as extends to Strategic Management, Performance Management and Risk Management. Management Accounting has a primary function in developing performance measures. It assists managers in planning can controlling their organizations. It is concerned with providing information to managers for achieving organizational goals. In many years ago, the measurements focus on the aggregate measures of financial performance. It related to Return on Investment (ROI), Economic Value Analysis (EVA) and nowadays widely on both academics and practicing management accountants and management consultants. The difference between ‘traditional’ and ‘innovative’ accounting practices can be referred to cost control techniques. Cost...
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