Management Accounting Change
ManagementAccounting Change
------------------------------------------------- Describe the ‘Challenge of Management Accounting Change’ in light of recent research findings and discuss, how can this change help an organisation, in getting its strategic, tactical and operating objectives?
Management accounting change and the continuously changing roles of management accountants have dominated accounting literature for the past few decades and the theme of management accounting change procedures has been a topical issue of many studies such as Baines and Langfield-Smith, 2003; Kapla, 1985 and Granlund and Lukka, 1998, just to name a few.
In order to understand the relationship between a firm 's strategy and objectives with its management accounting systems, it is necessary to first define the latter.
The Chartered Institute of Management Accountants (CIMA) define Management Accounting as "the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan, evaluate and control within an entity and to assure appropriate use of and accountability for its resources. Management accounting also comprises the preparation of financial reports for non-management groups such as shareholders, creditors, regulatory agencies and tax authorities."
It is important to explore the extent to which management and strategic concerns are driven by accounting practices, and also how accounting practices are mediated by the views that managers have of the role of accounting (Burns et. al, 1999).
Changes in Management Accounting can be viewed as an inevitable process, and they are also intrinsically interlinked to not only changes in a firms strategy, but also with environmental changes. Both internal and external changes in our economic and business environment are the dominating factors in the change of management
------------------------------------------------- Describe the ‘Challenge of Management Accounting Change’ in light of recent research findings and discuss, how can this change help an organisation, in getting its strategic, tactical and operating objectives?
Management accounting change and the continuously changing roles of management accountants have dominated accounting literature for the past few decades and the theme of management accounting change procedures has been a topical issue of many studies such as Baines and Langfield-Smith, 2003; Kapla, 1985 and Granlund and Lukka, 1998, just to name a few.
In order to understand the relationship between a firm 's strategy and objectives with its management accounting systems, it is necessary to first define the latter.
The Chartered Institute of Management Accountants (CIMA) define Management Accounting as "the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan, evaluate and control within an entity and to assure appropriate use of and accountability for its resources. Management accounting also comprises the preparation of financial reports for non-management groups such as shareholders, creditors, regulatory agencies and tax authorities."
It is important to explore the extent to which management and strategic concerns are driven by accounting practices, and also how accounting practices are mediated by the views that managers have of the role of accounting (Burns et. al, 1999).
Changes in Management Accounting can be viewed as an inevitable process, and they are also intrinsically interlinked to not only changes in a firms strategy, but also with environmental changes. Both internal and external changes in our economic and business environment are the dominating factors in the change of management
References: Baines, A. and Langfield-Smith, K. (2003) ‘Antecedents to management accounting change: a structural equation approach’, Accounting, Organizations and Society, Vol Burns. J., (1999) “The dynamics of accounting change, Inter-play between new practices, routines, institutions, power and politics”, Accounting, Auditing & Accountability Journal, 13:5, pp. 556-596 Burns Bruggeman. W., and Slagmulder. W. (1995) “The impact of technological change on management accounting”, Management Accounting Research, pp. 241-252 Chapman, C Ezzamel. M., Lilley, S., and Willmott H. (1997) “Accounting For Management and Managing Accounting Reflections On Recent Changes In The UK”, Journal of Management Studies, 34:3, May, pp. 440-462 Horngren Johnson, H.T. and Kaplan, R.S. (1987) Relevance Lost: The Rise and Fall of Management Accounting Kaplan, R.S. (1984) ‘The evolution of management accounting’, The Accounting Review, Vol. LIX, No Kaplan, R.S. (1985) ‘Accounting lag: the obsolescence of cost accounting systems’, California Management Review, Winter, Vol Libby. T., and Waterhouse. J. (1996) “Predicting Change in Management Accounting Systems”, Journal of Management Accounting Research, Vol. 8, pp. 138-150 Macy, G., and V Mia, L. and Patiar, A. (2001) ‘The use of management accounting systems in hotels: an exploratory study’, Hospitality Management, Vol. 20, No. 2, pp.111–128 Scapens, R Wijewardena, H. and De Zoysa, A. (1999) ‘A comparative analysis of management accounting practices in Australia and Japan: an empirical investigation’, The International Journal of Accounting, Vol. 34, No. 1, pp.49–70.