1 / 15

Management Accounting： Past, Now and Future

Management Accounting： Past, Now and Future. 1. Management Accounting Procedure Development & Business Environments 1825-1925：First part：Cost efficiency Second part：Management control for Diversified organizations

lamont
Download Presentation

Management Accounting： Past, Now and Future

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Management Accounting：Past, Now and Future 1. Management Accounting Procedure Development & Business Environments 1825-1925：First part：Cost efficiency Second part：Management control for Diversified organizations 1925-1985：Slow in innovation 1985- ：Relevance to strategy formation and building competitive advantages

  2. 2. The Role of Management Accounting3. The Emphasis of Traditional Management Accounting4. The Problems of Traditional Management Accounting Systems5. How to Restore the Relevance of Management Accounting6. How to Build a Strategic Management Accounting System (1) Value Chain Analysis (2) Position Analysis (3) Cost Driver Analysis7. Computerized Cost System Design

  3. Value Chain and Value Added Shank & GovindarajanMichael Porter Industry Value Chain----------------> Value System Value Added Process----------------> Value Chain

  4. Exhibit 2-1 Differences in Cost Management Caused by Differences in Strategy

  5. COST DRIVER CONCEPT Strategic Cost Drivers: 1. Structure cost drivers: (1)Scale (2)Scope (3)Experience (4)Technology (5) Complexity 2. Executional cost drivers: Work force involvement; TQM; Capacity utilization; Plant layout efficiency; Product configuration; External linkages Process Cost Drivers: ABC/ABM

  6. Exhibit 2-3 The Management Accounting Versus the Strategic Cost Paradigm

  7. Why Some Factories are More Productive Than Others I. A fogged window is relying on traditional accounting information： (1) Cost is distorted (2) The system measure what is spent；not consumed. (3) The system measure A. The direct effect B. The realized events (4) Measured in the nominal terms, not real times. (5) Inappropriate measurement：reduction in labor hours.  capital for labor

  8. (6) Measuring direct costs with computers, but not the indirect overhead costs. (7) Pay little attention on material productivity A. Record in dollars, not in physical terms. B. Record material consumed based on standard costs without adjusting inflation. (8) Only review the large transactions (engineering changes) but not all of them. (9) The lag on bookkeeping.

  9. II. Research Design Time line：1973-1982 Process：5 factories Fab：4 Hi-Tech： 3/12 factories( 3 companies) TFP： Output * Standard cost 1982  Input * Price 1982 Methods：(1) Longitudinal (Time series) (2) Cross-Sectional (3) Combined

  10. II. Factors Affecting Productivity (1) Capital investment Long-termbenefit, short-term unfavorable. (2) Reduce waste：Percentage of reject. (3) Get WIP out (4) Reduce confusion

  11. Restoring the Relevance of Management Accounting, Hiromoto I. Innovation is key to the rapidly changing business environment. In Japan, Management Accounting is used to link with strategy for innovation. (1) Use non-financial (2) Cost allocation is used to promote automation, standardization, shortening lead time. (3) Restructure for globalization. Theme: The design of measurement & control system for continuous innovation.

  12. II. Traditional Management Accounting： (1) Overemphasis on “Information for decision making”. (2) Overemphasis on constrained optimization.

  13. III. New Management Accounting： (1) A behavior influencing focus： A. From information for decision to a behavior influencing. B. Integrate the behavior influencing focus with strategy. (2) From technology driven to market driven：Target costing. (3) From static to dynamic approach (4) From baton passing to team-oriented approach： Variance analysis.

  14. IV. Four Examples： (1) TWN Common Parts (2) HeadCount  Depart  Products (by sales) (3) Transfer Price (4) Term Measure (No actual processing time is reported)

  15. Stage 1 Systems Broken Stage 2 Systems Finl. Reporting Driven Stage 3 Systems Customized, Stand-alone Stage 4 Systems Integrated Systems Aspects Data Quality External Financial Reporting Product/Customer Costs Operational and Strategic Control Financial reporting systems Integrated ABM systems Operational & Strategic Performance Measurement sys.

More Related