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In this part we will introduces this term paper, a general background of the subject, problem statement, purpose of the study.
Background
The original article The evolution of Management AccountingWritten by Robert S Kaplan published by American accounting association in the year 1984. This article is based on the development of cost management accounting practices and asses their relevance to the changing nature of industrial competition in the 1980s. The paper includes five parts including: 1. A summary of historical developments in cost accounting, 2. Historical development of managerial control, 3. Developments since 1925 in cost accounting and managerial control, 4. New challenges for cost and managerial accounting research, and 5. New directions for management control research. First three part of the article the writer uses different sources to describe the historical development of management accounting practices and last two parts he analyzed, predict and recommend about future practices of management accounting
In the later part of the term paper I will try to summarize all five sections of the article.
Problem statement
There has been little innovation in management accounting systems in the last sixty years.
Methodology:
This paper is a qualitative research using both survey method and secondary literature sources.
Literature Review:
In this part of the term paper I will summarize the source of the literature of Kaplanss article.
Analysis:Inthis part of term paper the Kaplans analyses of the new challenges for cost
managerial accounting and management control research are summarized below.
Findings
These findings are found by Robert S. Kaplan 1. There was less pressure on short-term profit in the 20s and 30s. 2. Management promotions occurred less often in the past. 3. The size of organizations has changed from small to relatively large, so sacrifices in long terms profits to achieve short terms goals are not at as noticeable. 4. Managers today are unfamiliar with the firm's products, processes and technology. 5. Global competition and other changes in the competitive environment have changed so that the old control systems are not appropriate. 6. Measures such as product leadership, employee skills and morale, customer loyalty are perhaps better measures of future profitability than financial performance so, multiple measures are needed.
Conclusion
Management accounting must serve the strategic objectives of the company. The definition of management accounting emphasizes financial measurements, but needs to include an explicit recognition of the need for information and measurements in such soft areas as product quality, productivity, product innovation, employee morale, and customer satisfaction.
Recommendation:
Kaplan has recommended couple of things, the most important one isIf management accounting research is to progress, information needs to be collected from corporations.