Traditional management accounting practices essay

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Traditional management accounting practices essay

Hire Writer So for the understanding of how the change in these variable affects the usage of management accounting practices in the manufacturing sector of Pakistan, we have selected ten different listed manufacturing companies of Pakistan.

These companies includes Ghazi Fabrics which belongs to personal goods textile area, Engro Polymer which belongs to Chemical sector, Shezan International which belongs to food product sector, Tariq Glass which belongs to Glass Industry, Ghani Global which also belongs to Glass producing sector, Berger Paints Pakistan Ltd which belongs to paint producing industry, Mehran Sugar Mills Ltd which belongs to sugar-producing factors, Nirala Foods which belongs to food-producing sector, Safe Mix Concrete Ltd which belongs to construction sector, Pakistan Gum and Chemicals Limited which belongs to chemical sector.

Through literature review, we were able to find the variables that affect management accounting this variable includes technology, size of firms, and structure of firms, no of professional accountants, globalization, external environment, and resources.

On the bases of these variables, we have developed hypotheses Technology change has a direct association with the use of management accounting practices by the companies. Size of companies is associated with the use of management accounting practices by the companies.

Globalization cause companies to use different management accounting practices.

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The more competitive environment will drive organizations towards change in their traditional management accounting techniques. More celebrated the no of resources of firms are directly related to the evolution of management accounting techniques. The structure of companies has an association with the use of management accounting techniques Literature review Many researchers had done researches on the change in management accounting practices which are caused by different variables in different time periods.

So we have included seven factors which show the relevance of our topic. Technology Technology is the most critical factor that can affect the management accounting, with the advent of new technology the managerial accountants can record the product cost related data of their companies more quickly and the data interpretation is now more accurate, more efficient and decision making is now speedup due to the technology Emmanuel et al.

Now firms are diversifying and can create various products at the same time with the utilization of technology in their manufacturing processes if management accountants continue to use the traditional overhead techniques to allocate the overhead costs to the products this will raise the price of the products which their firms offer to their customers and the higher price of the product can be a problem if competitor is offering the same quality product at the lower price this will result in loss of potential market share.

Statement of the Problem The research methodological analysis used in this survey was a study questionnaire sent to executives of the industry. In entire, useable completed questionnaires were received and analyzed.
Study of the application of management accounting in manufacturing sectors of Pakistan The importance of addressing this issue is to justify if this alternative direction is right within management accounting academia, and whether it should be continued. The emergence of alternative management accounting research occurred in the late s partly due to the shortfalls of the traditional management accounting approaches.

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Management accounting in manufacturing sectors of Pakistan | Assignment Example

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For overcoming this situation, firms now use activity-based costing ABC which makes them able to compete effectively in the market due to ABC firms can deliver a competitive product to the market which is necessary for their long-term existence Emmanuel et al.

Size of the firm Size of a firm also an essential factor that has a profound impact on the management accounting. Most of the large firms adopt changes more rapidly as compared to small firms.

Traditional management accounting practices essay

Large firms have an immense amount of capital and they can take more risks, for managing this massive amount of money and high level of risks firms need highly competitive management accountants who can make sure firms long-term existence, by using their in-depth knowledge of management accounting in managing of that high level of risks and capital Ko et al.

The structure of firms The structure of an organization affects the management practices. There are two types of organizational structures centralized and decentralized Catelin, In decentralized organization management accountants are supported if they want some changes in the regular accounting practices Chenhall Management accountants are warmly welcomed when they introduce the innovative management accounting practices such as activity-based costing ABC Abdel-Kader and Luther These innovations to the management practices make the businesses to survive for an extended period Brickley, Smith and Zimmerman, Globalization The globalization has taken the world into a new dimension.

Most of the big firms are nowadays working outside of their country borders Mubiru, These all factors will have a direct impact on the management techniques which they will use in that particular environment. The global competition has put pressure on the firms to evolve their management techniques which add value to their products, such methods which are introduced due to the worldwide competition are activity-based management ABMtotal quality management TQMbenchmarking and re-engineering.

Professional Management accountants Professional accountants play a vital role in the success of any organization. Formerly the role of accountants was limited to providing the accounting information which was used by the decision makers by making decisions.

Nowadays the part of managerial accountants have been changed from an information provider to active decision makers they are involved in planning, directing and controlling this includes overall value to the organization Weygandt, Kimmel, and kieso In this era of immense competition, accountants bring evolutions in the traditional management accounting systems and bring a new variation to the management accounting which helps their organization to remain competitive in the market.

If an organization has a variety of talented accountants than the performance of that organization will be much better than the other players in the markets, because they all always will be focused toward changing the management accounting practices according to the need of environment and this will give them advantage.

This organization has high chances of growth and survival. Resources Resources are significant for the growth and development of organizations Adler and ET, Critically examine the above statements by analysing the contribution of traditional management accounting techniques in an organisation, the necessity for modern management accounting techniques and the role of accountants in the implementation of the modern management accounting techniques in an organization.

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These factors lead firms toward a change of their management accounting practices from traditional to the new one because survival without innovation in this globally competitive world is impossible.

Below is an essay on "Management Accounting Practice in Bangladesh" from Anti Essays, your source for research papers, essays, and term paper examples.

Traditional Vs. Modern Managerial Accounting | Papers Marketplace

ABSTRACT The more the development of the market economy, the more the significance of management accounting. 2. To evaluate how much the levels of these management accounting practices (MAP).

3. To evaluate life cycle of the organizations and management accounting practices (MAP).

Paper Details

Significance of the study There is lack of research in services sector of management accounting practices . used especially traditional management accounting practices in service sector of Pakistan. While in terms of performance evaluation practices, all the non financial measures related to employees.

Traditional Vs. Modern Managerial Accounting | Papers Marketplace