Evolution Of Management Accounting

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Organization’s goals are very important in every organization because it can help the managers and employees to establish their job and career objectives. To accomplish the organization’s goals, they have to undergo the process of identifying, measuring, analyzing, interpreting and communicating information (“Managerial Accounting”, n.d). This is called as management accounting. So, the evolution of management accounting is the improvement the organizations made over period of time so that they can accomplish the organization’s goals. There are 4 stages of the evolution of management accounting. Firstly, stage 1 is the cost determination and financial control where it was before year 1950. During this stage, the organization is focusing on…show more content…
This is where stage 3 of the evolution of management accounting occurred. During year 1985, the technology is rapidly changed and improved. The use of technologies in this stage reduced the waste of resources and thus, increase the organizations expected profit. This is because they were focused on cost reduction. For example, when the company uses technologies for the production of their goods, labor workforce will decline and thus reduce the labor costs. Just-in-time (JIT) and activity-based-costing were the techniques used during stage 3. Finally, stage 4 was the last stage of the evolution of management accounting. This stage was in 1995 where it shifted to the creation of value through effective resources use. Hillstrom (n.d) state that ‘value creation is the primary aim of any business activity, for instances creating value for customers helps sell products or services, while creating value for shareholders, in the form of increases stock price, insures the future availability of investment capital to fund operations’. The use of technology for value creation is to analyze the driver of customer value, shareholder value and organizational innovation. For example, the companies innovate their existing products by creating more functions, more flavors (for foods) and more so that it can attract the customers to buy the products. Furthermore, the companies also need…show more content…
One of them is strategic management accounting techniques. Based on researched, there are too many authors listed out too many strategic management techniques and thus, there is a significant overlaps between the categorization of the strategic management accounting techniques. The examples of the techniques that had been implemented in the companies are costing, planning, control and performance measurement, strategic decision making, competitor accounting and customer accounting (Cadez & Guilding as cited in Juras, 2014). However, out of those techniques which techniques have been used in practice the most and how the change process of their adoption occur. Because there are too many techniques implemented, there are some authors who argue about the strategic management accounting techniques. For example, according to Fowzia (as cited in Juras, 2014) the improvement of financial performance had been influenced by some of the strategic management accounting techniques, meanwhile according to Soljakova (as cited in Juras, 2014) strategic management techniques that are listed bring no specific advancement to strategic management accounting concept. This shows that different authors have their own opinion about the strategic management accounting techniques adoption. Yet, till now the adoption and techniques of strategic management accounting is still not fully understood and not been adopted as

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