Management Accounting



Management Accounting

a)Discuss the various techniques which could be used by the management accountant in fulfilling their role. Please draw from the above definition and the methods you have studied so far in both Introductory Management Accounting and Intermediate Management Accounting in answering this requirement.

The field of management accounting is changing rapidly for several years by new insights. With the publication of Relevance Lost, The Rise and Fall of Management Accounting (Johnson and Kaplan, 1987), the effectiveness of the discipline to be called is put into question. Generate financial ratios is considered insufficient for complex organizations of control information. For the necessary control information, the broader concept of performance acceptance. In performance as a point measurement of both hard (quantitative) and soft (qualitative) data for the business. More and more management accounting is to stand in the light of responsibility accounting, which is beaten a bridge between management accounting and management control. Management accounting focuses on the data for the information. New insights into what is necessary for managers to steer, are incorporated into the Balanced Scorecard of Kaplan and Norton (1992). Where management accounting is the field of business economics, management control lies mainly in the field of business. Especially if the definition of Anthony (1988) as a starting point: "Management control is the process by All which managers influence other members of the organization to Implement the organization's strategies”.

Management accounting focuses on the data for the information. How the data is transformed into information? Derksen & Crins (1992) call a given nothing more than a certain fact. This fact only becomes meaningful, when it is placed in a certain frame of reference. Data to information once they have meaning to the recipient of such data. Information is not an end in itself but a supporting role. To be able to take decisions, to have a choice from the various possibilities, we need information. With the information, one wants to remove a portion of the uncertainty, so that a better decision is possible. The risk in the decision-making can be reduced with good information.

Information Services can be defined as the systematic gathering, recording and processing of data, aimed at providing information. Information Services includes:

1. The collection and recording of relevant data

2. The processing of these data to information

3. Providing this information to meet the information needs that exist in the organization.

The set of people, resources, procedures and rules that such a function is the information system. Bulte, Dijksma & Van der Wal (1995) formulated the principles which the administrative system must meet for the purpose of management accounting as follows:

1. Providing information to the leadership for the planning and control activities of a routine character. 2. Providing information for the leadership to take non-routine decisions and policy making in the long term.

Management accounting focuses therefore on the internal communication, where the demands on the information generated can be defined by the management of the company...