Relevance of Management Accounting Systems in Contemporary Organizations

Running head: MANAGERIAL ACCOUNTING
Managerial Accounting
Name of the Student
Name of the University
Author’s Note

MANAGERIAL ACCOUNTING1
Abstract
This report undertakes the analysis of two management accounting articles named
“The Case of a Newly Implemented Modern Management Accounting System in a
Multinational Manufacturing Company” and “Implementation of the Activity-Based
Costing Model for a Farm: An Australian Case”. Both of these articles are on the
application of management accounting system within the contemporary business
organization. The findings of the report states that the management accounting
systems can be useful in the complex costing environments when the challenges in
their implementation are considered effectively.

MANAGERIAL ACCOUNTING2
Table of Contents
Introduction...................................................................................................................3
1. Three Management Accounting Methods................................................................3
2. Relevance of MAS....................................................................................................3
I) Evidence from the Case Companies.....................................................................3
II) Compare and Contrast the Findings with One Other Article................................4
3. Conclusions on the Relevance of MAS....................................................................5
4. Lessons....................................................................................................................6
First Article................................................................................................................6
Second Article...........................................................................................................7
Conclusion....................................................................................................................7
References...................................................................................................................8

MANAGERIAL ACCOUNTING3
Introduction
Managerial accounting is considered as certain processes and procedures
that assist in the creation of documents and reports for assisting the organizational
managers to make effective business decisions in order to effectively run the
company (Wagenhofer 2016). Different methods or techniques of managerial
accounting provides the organizational managers with the information needed for
making sound business decision for improving the overall business. Organizational
managers use different methods of managerial accounting for measuring the
success or failure of the overall business and to assess the fact that whether the
business is meeting its goals and objectives (Klemstine and Maher 2014). In the
contemporary business organizations, different tools and techniques of managerial
accounting play crucial roles in tackling different aspects of the business. Analysing
and evaluating the use and purpose of different management accounting systems for
aiding the managers to take the correct business decisionss is the main objective of
this report. In order to achieve this objective, two articles on the implementation of
management accounting technique in real-life companies are analysed and
evaluated with the aim to assess the relevance of management accounting systems
in contemporary organizations. This report also discusses about the main lessons or
outcomes of the two articles.
1. Three Management Accounting Methods
The first article named “The Case of a Newly Implemented Modern
Management Accounting System in a Multinational Manufacturing Company” has
mentioned about different categories of management accounting methods and the
following discussion discusses about three of them.
Just in Time (JIT) – JIT is a major management accounting strategy where the
business organizations purchase the minimum amount of goods for meeting the
demand of the customers. Under this system, the suppliers are required to deliver
smaller shipments in more frequent basis. The main intention of this system is to
ensure the fact that the companies use components and sub-assembling for creating
finished goods so that they can be delivered to the customers on exact time. JIT
helps in reducing a consistent amount of investment in the inventory that contributes
to the reduction of working capital (Macinati and Anessi-Pessina 2014).
Value Chain Analysis (VCA) – VCA is another crucial management accounting
method that assists in studying the steps to process followed by a business for
delivering goods and services. The main intention of VCA is to identify and locate
those processing steps that add value to the products and services. The ultimate aim
of this method is ensuring the fact that the value of the customers increases to the
highest possible extent while maintaining the cost to the lowest possible extent
(Youssef 2013).
Total Quality Management (TQM) – TQM is another key method of management
accounting that refers to the continual process to detect as well as reduce or
elimination of errors in the manufacturing process, to streamline supply chain
management, to improve the overall customer experience and to ensure the fact that
the employees are up to speed with the training processes. TQM aims in holding all
parties involved in the production process accountable for the final products’ overall
quality (Collis and Hussey 2017).