Management Accounting System

This assignment examines the application of a Management Accounting System, specifically the Balance Scorecard, to evaluate the profitability of AB Limited. It discusses the key features and advantages of the Balance Scorecard, highlighting its role in strategic management, performance measurement, and communication of company strategy.

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Table of Contents
TASK 1............................................................................................................................................1
REFERENCES................................................................................................................................2

TASK 1
As, AB Limited is working for more than 10 years in selling and distribution of products
and now they wanted to evaluate there profitability by different type of equipments. So, by
techniques of Management accounting system they can evaluate there performance. Balance
score card can be good option for evaluation as it is an performance metric that are used for
strategic management for identification and improvement of different internal functions of a
organisation. It is also used to providing and measuring feedbacks to them. Balance Score Card
is totally focussed on management and implementation of strategy(Balance Score Card, 2017).
The Key features of goo Balance Score Card are-:
1. It must highlight the strategy of company through focussing on cause and effect
relationship.
2. They should help in communicating all the strategy to the members by translation in
simple manners(Akkermans & Van Oorschot, (2018)).
3. Balance score card must provide strong emphasis on the financial measures and
objectives.
4. It must limit the different number of measures through identification of critical ones.
Advantages of Balance Score Card-:
1. Balance Score Card can help in providing a good structure for communication of
strategy. This helps managers to think about the cause and effect relationship of different
strategic objectives.
2. It also helps in better alignment of there projects and initiatives with the different
strategic objectives.
3. This also helps in designing the key performance indicators for there different strategic
objectives.
4. It helps in aligning all organisational process such as risk management, budgeting etc.
So managers of AB Limited has taken good technique of Management accounting system for the
evaluation of performance.
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REFERENCES
Books and Journals
Akkermans, H. A., & Van Oorschot, K. E. (2018). Relevance assumed: a case study of
balanced scorecard development using system dynamics. In System Dynamics Palgrave
Macmillan. (pp. 107-132)
ONLINE
Balance Score Card. 2017. [Online]. Available Through
<https://www.balancedscorecard.org/BSC-Basics/About-the-Balanced-Scorecard>
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