FACTORS THAT INFLUENCED THE CHANGE IN MANAGEMENT ACCOUNTING  part 2 1000w

FACTORS THAT INFLUENCED THE CHANGE IN MANAGEMENT ACCOUNTING  part 1 1000w

Accounting is a process of identifying, measuring, and communicating economic information to permit informed judgements and decisions by the users of the information’

The history of accountancy has progressed in combination with civilization and commerce. The literature provides evidence that Paciolo in 1494 founded the concept of accounting by publication of ‘Summa de Arithmetical’. He presented accounting in methodical form that became a science later on.

The definition suggests that accounting is about providing economic information to others and it relates to the financial or economic activities of the organisation. Accounting information is identified and measured by the way of a set of accounts or double-entry bookkeeping.

2.1.1 Management accounting

2.2.3 ‘Accounting lag’

Johnson and Kaplan (1987) criticized management accountant for their inability to innovations and this was viewed as an “accounting lag” .Kaplan (1984) in his study about accounting lag proposed that accountants “should develop a research strategy to meet new demands for planning and control information”. He suggested that there was little innovation since 1920. Accounting lag need to be minimized to keep accounting information relevant to all changes occurring over time.

2. 3 Pressures for Changes

The literature identifies some relevant factors that impact on the role of management accountants including:

2.3.1 Advances in Manufacturing and Globalization

Companies have invested heavily in new manufacturing technology such as computer aided manufacturing (CAM), Computer Aided Design (CAD), and flexible manufacturing systems (FMS)