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Review The Rise and Fall of Management Accounting

Judul The Rise and Fall of Management Accounting


Sumber Management Accounting
Volume & Halaman 68, 7; ABI/INFORM Global; p22-29
Tahun Jan 1987
Penulis H. Thomson and Robert S.Kaplan
Reviewer Rido Aprianda (
Tanggal 23 September 2017

Background/Problem [1] Driven by the procedures and cycle of the organizations


financial reporting system, management accounting information is
produced too late, too aggregated, and too distorted to be relevant
for managers planning and control decisions.
[2] Management accounting reports are of little help to operating
manager attempting to reduce costs and improve productivity.
The management accounting system fails to provide accurate
product costs.
[3] Managers horizon contract to the short-term cycle of their
monthly profit and loss statement.
[4] Todays management accounting systems provide a misleading
target for managerial attention. They fail to provide the relevant set
of measures that apporpiately refelect the technology, products,
process, and competitive environtment in which the organization
operates.
[5] Financial managers often fail to recognize when the accounting
numbers are no longer providing relevant or appropriate measures of
operations
[6] Ironically, as management accounting systems became less
relevant and less representative of the organizations operations and
strategy, many companies ecame dominated by senior executives
who believed they could run the firm by the numbers.
Solutions [1] Vigorous global competition, rapid progress in product and
process technology, and wide fluctuations in currency echange rates
and raw material prices demand excellence from corporate
management accounting systems. An organizations management
accounting system must provide timely and accurate information to
facilitate efforts to control costs, to measue and improve
productivity, and to devise improve production process.
[2] Todays designers of management accounting systems can use
sophiscated electronic technology to devise reporting and control
systems that are more accurate, more timely, and hence, more
effective than those designed by their predecessors.
Future management accounting systems should distingusih clearly
between two types of information-strategic profitabilty information
and process control information. There must be one system to
provide information about the strategic variables that create value
for organization.
Conclusion A proper management accounting system should reveal whether an
organization conducts its internal economic activities more
efficaciously than another organization or unaided market exchange
might conduct the same activities. That is the ultimate strategic
question. A proper management accounting system must be signed
to answer that question (why does this organization exist?).

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