Advanced Management Accounting Assignment - Doc
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Added on 2020-12-23
Advanced Management Accounting Assignment - Doc
Added on 2020-12-23
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Advanced Financial Accounting &Advanced Management Accounting
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................11. BALANCE SCORE CARD.........................................................................................................11.1 Advantages of Balance Score Card.......................................................................................21.2 Disadvantages of Balance Score card...................................................................................21.3 Success case of Balance Score card......................................................................................31.4 Failure case of Balance Score card.......................................................................................31.5 Perspectives of Balanced Score Card....................................................................................42. ACTIVITY BASED COSTING ................................................................................................62.1 Advantages of Activity Based Costing ................................................................................72.2 Disadvantages of Activity Based Costing.............................................................................82.4 Success case of activity based costing..................................................................................92.5 Failure case of activity based costing....................................................................................9CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................11
INTRODUCTIONManagement accounting is referred as frequent accounting method which is used foroffering and supplying various data for process of decision making. The present report willdiscuss about two essential management accounting method that is balance Score card systemand Activity based costing. It will provide critical analysis of both systems with statement of“Management accounting techniques have no limitations”. In the same series, it will justifyBalance score card with its advantages and limitation. It will specify failure and success storiesassociated with BSC. Further it will classify about Activity based Costing along with merits anddemerits as well. The quality devices and systems of management are associated by companyunder various circumstances. Without a bona fide thought to the suggestions on the whole dealadvancement of the change philosophy and process, the devices and systems are associated in anaimless route at the outset times. In this report management accounting methods are frequently viewed and determined asan essential device which could be used for supplying data and information n order to takedecision. In addition, it also cultivates particular sorts of conduct in a company. There are lot ofup to date method that are developed in these few years and shares a solid spotlight on exerciseof forms at a level of point in the firm. While on the other hand, some methods have generallymore grounded centre around the control such as balanced scorecard.This paper will create understanding of the modern as well as conventional methodswhich are; balance score card and activity based costing respectively. Furthermore, it willprovide with some success and failure cases of each methods.1. BALANCE SCORE CARDThe balance score card is referred as very important tool of performance measurementsystem. The system helps in institutionalize different aspect for understanding organization'smanagement nature. It integrates social and technical view if BSC. This view with context ofperformance measurement is appropriate but it does not qualify each radical kind of approachgiven by BSC (Abadi, Sari and Widiyarto, 2018). The ultimate goal behind balanced scorecardtheory is to measure the factors that create value for an organization and directly influence itsability to prosper. For accomplishing success in the future, it is very important to implement theuse of BSC as it helps in attaining corporate objectives. As per the views, this concept is closely1
related and innovative aspect of analysing performance. In the present scenario, it is complex andcomplicated as well as it provides scrutiny solution (Akkermans and Van Oorschot, 2018). The organizational success could be achieved with application of balance score card as itlays emphasis on full matter of concept. If BSC could be understood in perfect and appropriateaspect, then for accomplishing organizational success is very easy through appropriatemeasurement (Amaratunga, Baldry and Sarshar, 2010). The whole vision, mission has beentranslated along with organizational strategy. According to this system BSC is into 4 elementsthat is customer, financial, organizational learning and growth with process of internal business.According to Angeline, Boon and Teng (2015), elements of BSC provides brief descriptionabout performance measurement metric.1.1 Advantages of Balance Score CardAs per Dudin and Frolova, (2015), it gives strong framework for communicating andbuilding strategy. The business model which directly visualised with strategy maps as managersare forced to think with effect and cause relationships. The consensus is ensured with settinginterrelated strategy objectives. In the similar aspect, strategy communication is improved and ithas presence of interrelated objectives which are mapped and communicated externality andinternally. The understanding of strategy has been facilitated which helps in involvement of staffand external stakeholders for reviewing and delivering strategy. According to Kaplan and et.al.(2010), organisations are forced for designing key performance indicators with context ofstrategic objectives. Generally, organizations with BSC tends for reporting high quality of information ofmanagement along with raising benefits with application of information for guiding managementinsights and strategic decision making. As per views of Lipe and Salterio (2010), performancereporting is improved with application of Balance score card and it is communicated in betterform with absence of structured approach to performance management. In the similar aspect, ifclear management reports are created along with dashboards increases requirements and need fortransparency in both internally and externally as well (Syahdan, Munawaroh and Akbar, 2018). 1.2 Disadvantages of Balance Score cardAccording to Lueg and Vu (2015), BSC is not perfect it comprises various limitations aswell. It has huge need of high investment with long term perspective as it is long termed instead2
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