MANAGEMENT ACCOUNTING Essay Example | Topics and Well Written Essays - 2500 words

MANAGEMENT ACCOUNTING - Essay Exampleexternal and internal factors. These factors have redefined how attention practices or functions are performed across business organizations. In the writings by Burgstahler et al. (2007), they stated that the transformations have largely affected the decision making process since there is a change in the way structure, which has integrated new roles as well as position holders. In addition, technology is also been increasingly applied in performing management functions. Despite the continuous transformation in the field of management, the constant variable has been the fact that accounting figures have consistently played a key role in the decision making process or rather they have consistently been used to decide the direction that the company should take. The untroubled reliance on accounting figures to perform management functions has led to the development of management accounting or control systems that were specifically designed to help the management of business organizations in the process of control, product costing and evaluation of managements performance. However, in a seminal article, published by Johnson and Kaplan (1987) they both argued that management accounting systems had lost their relevance since they were inadequate for the modern accounting environment. In ingredienticular, they succinctly summarized the inadequacy of management account systems to cope with the demands of modern management by stating the information they generated was too late, too aggregated, and too distorted to be relevant for managers planning and control decisions (Ezzamel et al. 1990). This salute study mainly seeks to discuss the above command in relation to todays environment. It will begin with a literature analyze of the main topic of discussion and even a review on Johnson and Kaplans criticisms. Secondly, it will state the methodology that was applied in collected secondary data that were used in this study. In the third part before concluding, the study will conduct a critical analysis on the Johnson and Kaplans argument. 2.0 Literature review 2.1 Accounting With reference to the writings by Alkaraan and Northcott (2006), they stated that accounting as a practice focuses on recording, measuring, and communicating financial facts to concerned parties who use the facts for varying reasons. Roslender and Hart (2003) noted that in the present business environment, accounting largely focuses on the preparation of accounting reports and less on bookkeeping, which has been reduced to fairly a routine process because of the increased cybernation and introduction of more effective systems of internal control. The users and uses of