Management Accounting Practices and Balanced Scorecard

ACC203 Management Accounting
Term 2
Major Assignment

TABLE OF CONTENTS
Question 1..................................................................................................................................3
Introduction............................................................................................................................3
Factors contributed in development of management accounting practice.............................3
Evaluating the usefulness of balanced scorecard...................................................................5
Conclusion..............................................................................................................................6
Question 2..................................................................................................................................6
Part A.....................................................................................................................................6
Part B......................................................................................................................................6
Part C......................................................................................................................................6
References..................................................................................................................................7

QUESTION 1
Introduction
Modern management accounting practices are playing a significant role in business
decision process within highly volatile market trends. In the current market trends,
management accounting is not only focused on traditional accounting based on compliance
and control but also strategic and competitive factors which assist top managers in collection
of wide range of information such as market demand, market share of competitors, growth
trends, costing of new goods and services and product lifecycle (Mårtensson et al.2016). All
these elements have a great involvement in strategic business accounting as well as a
decision-making process.
Factors contributed to the development of management accounting practice
As a result of a change in business trends, companies in different industries are
applying organizational changes in which management is mainly focusing on innovative
approaches within management accounting practices. In traditional accounting practices,
companies have mainly focused for control and compliance practices through several tools
like cost control, budgeting, cost-benefit analysis and investment appraisal (Nuhu, Baird &
Appuhami, 2016). Apart from that application of a customer-centric approach in the strategic
planning process has influenced management for the adoption of new trends in business
accounting practices that provide significant support to a business entity in highly
competitive market trends. In this context, some important elements of management
accounting practices are discussed below that provide competitive support to top authorities
in a huge competition.
Cost leadership: It is one of the key factors of organizational success within in highly
completive market. According to this approach, companies make an effort in order to produce
its products at the lowest cost with reference to the price of its competitors. This approach
influences companies for application modern accounting practices in business operations
such as business process re-engineering for changing the structure production process,
determination of product lifecycle costing for assessment of cost of products in whole life and
consideration of Zero-base budgeting through which organization can manage its expenditure
as per business priorities (Hald & Thrane, 2016). All these tactics help the firm in offering its
products and services at lower prices as compared to other organization. It also provides