disadvantages, limitation, scope, cons of traditional management accounting practice

Document...

Question

disadvantages, limitation, scope, cons of traditional management accounting practice
	
Document Preview: UNIVERSITI TUNKU ABDUL RAHMANFACULTY OF BUSINESS AND FINANCEBACHELOR OF COMMERCE (Hons) ACCOUNTING   (May 2012)Subject: Performance Management UBAM2023/4Coursework - Group Assignment        	Date: 28 May 2012				      Lead Lecturer: Chong Zhemin											 	 Introduction: The growing importance of cost management is significantly changing the practice of management accounting and that the challenge for management accountants lies in choosing their future role. Those who do not develop the right skill set will either have to develop expertise to allow them to transfer to functional areas of the firm or risk finding themselves at a career dead-end. As competition becomes more intense, firms are forced to learn to be more proactive in the way they manage costs. With the emergence of the lean enterprise and global competition, firms face ever-increasing levels of competition. For many of these firms, survival is dependent upon their abilities to develop sophisticated cost management systems that create intense pressures across the entire value chain to reduce costs. The main purpose of this assignment is to encourage and facilitate students to explore and gain a better understanding on the weaknesses of the Traditional Management Accounting Practice and the needs to change to Modern Management Accounting Practice. Students are required to write a report on “The Importance of Modern Management Accounting Practice.”The Assignment: You are required to:A.	Form a group Group size: between 5 to 6 students.This is a group assignment. You are required to work together as a group to complete the assignment.3.	Each group is expected to submit ONE completed assignment as a group, NOT on an individual basis.B.	Your assignment should discuss on the following issues:Highlight the criticism of Traditional Management Accounting Practice.Introduce and evaluate the mechanism of Modern Management Accounting Practice (Choose any 4) :-ERP...

David · Accepted Answer

Answer 
1) HIGHLIGHTS OF CRITICISM OF TRADITIONAL MANGEMENT ACCOUNTING 
Although many changes have been brought under management accounting yet some of the 
weaknesses still remain and still traditional management accounting practices are criticized. 
Some of the points highlighting the criticism are given below:- 
1. Preparation of budget includes excessive use of reliance over past data which can prove 
wrong many times. 
2. Product costing system is producing increasingly misleading results. 
3. Changes brought over the past years in management accounting are not able to cope up 
with the present needs of mangers in today’s environment. 
4. Information produced by management accounting is more influenced by financial 
accounting regulations and conventions than by the needs of mangers. 
5. Traditional overhead absorption is criticized over a long period because 
amount of overhead cost is driven by number of activities involved and not by the 
production volume. 
6. ABC costing is recent change in management accounting but it has major weakness that 
it is not appropriate for all companies. It is costly in terms of time, software and training. 
7. Financial benefits of ABC are difficult to quantify, 
8. Balance scorecard requires a formal framework and focuses on key strategic performance 
areas and these are crucial for customer satisfaction. 
9. Companies are still unaware of the balance score cards and some are not willing to adopt 
these methods because these are costly in terms of time and energy used for a developing 
a scorecard. 
10.

disadvantages, limitation, scope, cons of traditional management accounting practice Document Preview: UNIVERSITI TUNKU ABDUL RAHMAN FACULTY OF BUSINESS AND FINANCE BACHELOR OF COMMERCE (Hons)...

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment