Factors contributing to the development of Management accounting practices

Running head: MANAGEMENT ACCOUNTING
Managem
ent
Accountin
g
May 31
201
9

MANAGEMENT ACCOUNTING 1
Table of Contents
Introduction................................................................................................................................2
Part A.........................................................................................................................................2
Factors contributing to the development of Management accounting practices....................2
Competition........................................................................................................................2
Compliance........................................................................................................................3
Control................................................................................................................................3
Usefulness of Balanced Scorecard.........................................................................................4
Part B..........................................................................................................................................5
Critical success factors...........................................................................................................5
Key performance indicators...................................................................................................6
Strategy Map..........................................................................................................................7
Balance scorecard of Qantas..................................................................................................8
Conclusion..................................................................................................................................9
References................................................................................................................................10

MANAGEMENT ACCOUNTING 2
Introduction
Management accounting is said to be the procedure of preparing accounts as well as reports
that offer suitable and detailed financial data to the executives of the company to make long-
term and short-term decisions. It helps in identifying, evaluating, analysing, understanding,
and communicates required information for attaining the goals of the organization (Uyar,
2010). The intent of this report is to highlight the concept of management accounting and the
factors behind the introduction of management accounting. The report is also being framed to
assess the usefulness of the balanced scorecard. In addition to this, the report is also
discussing regarding the key performance indicators and critical success factors of Qantas
Airlines, with the help of which the strategic map and balanced scorecard will be prepared.
Part A
Factors behind the introduction of Management accounting practices
Competition
One of the common things that are present in the 21st century is competition. Every business
and industry is presently dealing with competition due to presence of competitors. The level
of competition may vary between the rivals depending on the industry in which they operate.
The increasing number of competition impacts the operations as well as productivity of the
business (Bloom, Propper, Seiler and Van Reenen, 2015). In order to effectively deal with the
competition at domestic level and international level businesses work to develop different
practices that could provide proper and precise information of the market. Competition is one
of the major contributing factors that results in the development of management accounting
practices. The main reason for the development of these practices is because it identifies,
evaluates, analyse, understands and communities the information to the executives to take

MANAGEMENT ACCOUNTING 3
proper decisions for the benefit of the organization. This helps business in preparing the
reports and accounts that offer timely and accurate financial as well as non-financial
information. The precise and accurate information are essential for the business to take
decision which is provided by the practices of management accounting. For example, the
introduction of Activity Based Costing is one if the management accounting practise that
recognizes and allocates the cost to the overhead activities and then allots those costs to
different items or goods of the company. This results in providing precise and exact
information in comparison to traditional costing methods.
Compliance
Practices of the Management accounting are also developed to meet the key requirement of
the internal management in order to enhance the decision, attain goals, application of the
resource, use of capacity, internal business processes, and customer value to attain the
corporate objectives in a best manner.
Control
Control is another factor that helps in developing the management accounting practices. As
these practices support business on recording, analysing, summarizing and assigning the cost
related to the procedure, after developing the diverse courses of action in order to control the
costs. The goal is to advice the management of the company related to how to optimize the
practices of the business and procedures depending on the cost competence and capability.
One of the management accounting practice is cost accounting, which offers the detailed
information of the cost that is required by the management in order to control the present
operations and future plans (Drury, 2013).