The Rise and Fall of Management Accounting

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Problem Statement

Management accounting’s report fail to help manager make decision to reduce cost & improve productivity •Lack of information to interpret real meaning of data
Fall of management accounting that the improvement does not reflect with the changes business condition

Objective

Identify the problem causes the fall of management accounting •Solution to find a way to improve management accounting that provide accurate information an easy access for manager make decision •Criticism of lack of management accounting

Link between past management accounting & present management accounting

Methodology of Study

1.Historical & Background of management accounting

i.Early age
- Simple transaction  No level of management
- Focus on conversion cost (Labor, Material, & some attribution overhead)

ii.Middle Age
- Advances in transportation & communication (railroad & television) - Much larger geographical area distribution products
- Provide summary measure of performance

iii.Modern Country
- Problem coordinating diverse activities
- Management accounting innovation return on Investment (ROI) - Measure in term of multidivisional form

2.Dupont & General motor as model
Return on Investment (ROI) measure
Evolution of management accounting did not keep pace with the improvement in corporation product & process technologies

3.Accounting for Caravan
Allocate total profit for short term period not meaningful exercise •Cash flow of transaction is important for cash receipt & cash expenditure

4.Academic Led Astray
Focus narrowly on simplified model
Inadequate cost control
Traditional measure approach

5.Research from Tom Johnson & Bob Kaplan
Companies not aware the truth management accounting
Companies apply traditional system measure which lead difficulties interpret real meaning of information from data •Provide book for management accounting for people to aware the important of...
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