Week_9_Management_Accounting

Week_9_Management_Accounting - Prepared by Suzanne Byrne...

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Prepared by Suzanne Byrne WEEK 9: Management Accounting – History and Future Opportunities Objectives Upon successful completion of this module you should be able to: explain the debate surrounding the historical account of the factors that have affected management accounting practices; analyse the impact the changing business environment has on management accounting practices; and appreciate the opportunities and challenges within management accounting. Introduction It is the intention of this part of the course to introduce, question and ponder management accounting. Your study of management accounting to date has included the learning of techniques of costing, pricing, budgeting, allocating, etc. Techniques that are widely used in practice today and therefore techniques that graduate accountants should be acquainted. If you were lucky enough to be able to study management accounting 2 then through your study of more advanced techniques and contemporary practices you were introduced, ever so gently, to some of the philosophical frameworks that underpin the role and development of management accounting. A note about the Reading Materials for this course: I have spent a fair amount of effort to summarize and discuss the key points contained in the Required Readings. These summaries and discussion points appear in the lecture slides and weekly communication letter. Obviously you will benefit from reading the original articles. The content knowledge of these Required Readings is examinable. Additional Reading is provided for those students who wish to extend their knowledge beyond the minimum. Some of these readings you might find particularly useful as a reference for your Assignment 2. What is management accounting? 1
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Prepared by Suzanne Byrne In line with most textbooks it is generally accepted that management accounting is the provision of information to help decision makers make decisions for the future benefit of the enterprise. Information is needed to help decisions about the organisation’s strategies, objectives and resources and to help plan and control. Puxty (1993 , p.4) puts forward two other possible definitions of management accounting: 1. Management accounting is a set of social practices that delineate the space within which the activity of the workforce might be made visible and susceptible to rational calculation. 2. Management accounting is an instrument within an enterprise that facilitates the exploitation of, and extraction of surplus value from, its employees by the capitalist interests that, through management, controls the accounting system. Bromwich (1988 ) argues that the traditional role of management accounting is to include: - Internal financial accounting for score keeping.
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