HI5017: A Brief Study on Management Accounting System Report

This report critically analyzes the objective and application of management accounting systems (MAS), drawing from a journal article and comparing it with another. It investigates techniques like Total Quality Management (TQM), Balance Scorecard (BSC), and Just-in-Time (JIT) within a multinational manufacturing enterprise, assessing their impact on decision-making. The report evaluates the significance of MAS in modern organizations, comparing the outcomes with those of another company. It explores the importance of MAS at different management levels and its effectiveness in achieving business goals, with a focus on the role of IT integration and its influence on company strategies. The report highlights the practical use of MAS and its relevance to real-life companies' decision-making by managers and achievement of business goals.

Running head: A BRIEF STUDY ON MANAGEMENT ACCOUNTING SYSTEM
A BRIEF STUDY ON MANAGEMENT ACCOUNTING SYSTEM
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1A BRIEF STUDY ON MANAGEMENT ACCOUNTING SYSTEM
Table of Contents
Introduction:...............................................................................................................................2
Discussion:.................................................................................................................................2
Answer to question 1:.................................................................................................................2
Distinguishing the specific examples of various techniques of management accounting:........2
Answer to question 2:.................................................................................................................4
Analyzing the importance of management accounting techniques to modern organization:....4
Evidence identified from the company mentioned in the journal:.............................................4
Discriminating the outcome when compared to another existing life companies:....................6
Answer to question 3:.................................................................................................................8
Final view regarding the significance of MAS in the field of competitive and unsure business
orientation:.................................................................................................................................8
Answer to question 4:.................................................................................................................9
Recognition of four particular results for the management accounting.....................................9
Conclusion:..............................................................................................................................10
REFERENCE...........................................................................................................................12

2A BRIEF STUDY ON MANAGEMENT ACCOUNTING SYSTEM
Introduction:
The main aim of the current report is to analyze the objective of management
accounting system (MAS) as well as to examine the information related to the accounting
framework, already studied in the journal article. The present report will assess the two article
on basis of examples related to various methods of management accounting from the case
study of the multinational manufacturing enterprise. Evidence will be collected after
assessing the journal article in context of the significance of management accounting system
is compared with a different types of journal article sourced from research journal on
management accounting. The outcome of the study from both the journals have been stated in
the current report along with the effectiveness of MAS to the management accountant. In a
competitive as well as in an unreliable environment in business the report have specified the
significance of the management accounting system.
Discussion:
Answer to question 1:
Distinguishing the specific examples of various techniques of management accounting:
Total quality management (TQM), Balance scorecard (BSC) as well as Just in time
(JIT) are the recent techniques of management accounting discussed by the case. Since the
adoption of TQM in the organization became well known therefore, they secured universal
attention in the field of accounting latter years of 20th century. The industry less accepted the
TQM than what was anticipated but they started to use this type of techniques extensively.
With the aim of befitting the operations of the concerned case company, the company revised
as well as merged the two techniques, which are TQM as well as JIT. Conversely, the

3A BRIEF STUDY ON MANAGEMENT ACCOUNTING SYSTEM
implementation of the BSC techniques do not fundamentally contribute in the easy method of
manufacturing. The modern accounting BSC technique helps the case company in
distributing the resources according to the activities with the help of successful cost
accounting system. The introduction of the BSC technique brings several advantages to the
case company, which should be appreciated as these advantages helps in making better
decision in presenting cost information accurately as well as in removing any kind of
misrepresentations (Santini 2013).
The manufacturing method, where the goods item is manufactured only when they are
ordered is known to be JIT technique. This technique helps in improvising the production
methods and also helps in improving the commodities quality. Therefore, this leads the case
company to hold competitiveness in their market environment. The company from the journal
article implemented the JIT principles so that the process involved in manufacturing
improves in order to minimize the waste amount.
In order to meet the objectives of the manufacturing company as well as to satisfy
customer needs the companies merges all the organizational roles of the company. This is
done when TQM is implemented. As a result, the employees working in the company are
always involved to enhance the quality of product by reducing the cost caused by reduction in
waste as well as expanding business. With the introduction of TQM, the control of product
quality becomes a vital part in the process of production. This is possible because with the
help of quantitative measurement any kind of defect in the product quality is examined. TQM
do not have any kind of standard method while implemented (Adler 2013).
Balance scorecard is a technique related to performance management. The company
use this technique in order to connect the products they have accomplished. It helps in
strategic planning of the company. Most studies stated that large companies relative to small

4A BRIEF STUDY ON MANAGEMENT ACCOUNTING SYSTEM
companies implement BSC techniques. The financial measures include sales along with
profitability. While, non-financial measures include quality of the product as well as
customer needs. Thus, from the journal article the case company concluded that the
techniques like JIT, TQM as well as BSC were a bit complicated in order to fulfill both the
financial as well as non-financial measures. Hence, the techniques were not appropriate for
the case company mentioned in the article.
Answer to question 2:
Analyzing the importance of management accounting techniques to modern
organization:
Evidence identified from the company mentioned in the journal:
The article analyzed the importance as well as effectiveness of the management
accounting techniques functions with the help of modern organization. Since the information
related to management accounting have failed in order to keep up with the unreliable
surrounding, therefore, the management accounting method were questioned by business unit
managers many times. The business accounting functions after the introduction of major
accounting system based on IT were examined in the article with the help of multinational
company. Two scopes helped to find out the importance of the accounting management
method. First and foremost is the scope of suitability of this concerned system to the
companies satisfaction as well as the other one is effectiveness of the information related to
business accounting to help in making decision at every stages of management (Fullerton et
al. 2013). The evaluation is done by improving the practice of internal accounting.

5A BRIEF STUDY ON MANAGEMENT ACCOUNTING SYSTEM
When the objectives of the management accounting system is evaluated, it provided
the significance of the system, which are proposed by the manufacturing company. This
means that it is done in order to meet the customers’ needs as well as the information that are
effective helps the manager in making decision. From the article’s viewpoint it is found that
managers working in lower levels uses the maximum portion of the function in decision
making. The reason behind it is that these managers mainly handle the accounting methods.
Besides this, the middle management uses these methods in distinctive way. With the aim of
making smart decisions they depend on other additional as well as external information in
various plans. While, senior management level depends on relevant amount of data that are
mainly external to make tactical plans, therefore they subtly uses the system. The major part
of significant is discussed with the help of proper knowledge of the use of the management
accounting method. Even the relevance is examined on operational decision as well as the
strategic plans making level. The managers try to keep a bit control over those concerned few
difference in making operational decision. As a result, concerning this type of situation the
significance is normally known to be absolute. This happens because the decisions, which are
taken, based on information those are collected from the accounting management system
(Theriou and Aggelidis 2014).
While making the strategic decisions, two scenarios should be considered. Firstly, the
relevant information that are gathered from the business accounting method and secondly, the
external information. Considering the issues related to supply as well as customer chain,
while making decisions the case company needs the presence of external evidence. The
research found out that both the tactical as well as the operational managers have provided
great reliability on the information related to management accounting. Hence, this means that
there is possibility from MAS side to provide significance to the case company. As
mentioned already the significance of MAS is vital for those working at lower management

6A BRIEF STUDY ON MANAGEMENT ACCOUNTING SYSTEM
level. Thus, as the managers’ working at lower level is promoted as per the corporate
hierarchy, their relevance also reduces. Thus, they are indirectly related to each other in
context of tactical as well as operational decision-making (Bobryshev et al. 2015). Although,
with the help of external data as well as information generated from MAS these managers do
tactical planning. As a result, the information of the MAS have little significance from the
viewpoint of strategic managers (Oboh and Ajibolade 2017). Therefore, the outcomes results
the MAS significance level.
Discriminating the outcome when compared to another existing life companies:
In order to find out the comparison as well as discrimination of the findings with
another existing life company, an article is considered from the International journal of
applied management accounting. The company mentioned in the article is ABC. The article
mainly focused in analyzing the effect caused in the manufacturing plant due to information
technology. The article also studied its effect on the effectiveness of ABC as well as the
association among the plants performance, scope of the effectiveness of ABC as well as IT
addition. One of the major component of infrastructure need in manufacturing is MAS. The
article states that through MAS, operations managers are evaluated. The article provides
extensive literature on the information technology, accounting management as well as
marketing (Cadle et al. 2014). From the extensive literature it is found that information
system provides suitable evidence for the MAS. Along with that, the article stated that there
have been many researches done to study the link between MAS as well as information
technology. The article argued based on the difficult method while examining the association
between integration of information technology as well as effectiveness of ABC along with its
effect on the performance of manufacturing plant (Carlsson et al. 2016). A framework was
built in the research in order to evaluate the relationship among the concerned variables.

7A BRIEF STUDY ON MANAGEMENT ACCOUNTING SYSTEM
The article stated that the researchers have considered the data related to the
manufacturing plants to study the relation. After analyzing, the researchers came to some
conclusions. The outcome of paper indicates that addition of IT as well as the amount of
effectiveness of ABC have a significant connection between them. This kind of relation
influenced the various strategy like difference in the products as well as low cost used by the
company. Further investigation determined that degree of effectiveness of ABC, performance
of the market as well as addition of information technology do not have any kind of direct
connection among themselves. The outcome of the article suggested that there are major
implications in managerial accounting. This is because investment made in MAS would help
the business to achieve more returns as well as these investments are well associated with the
management strategy (Afonina 2015). Therefore, in future the researchers will subject to
challenge in context to prove their authenticity. This would help the future researchers to
generate an influence on the practice.
The previous study recognized the importance of functionality MAS in context to the
integration of modern IT. While, the latter half studied the effect of IT integration as well as
the effectiveness of ABC on the manufacturing company performance. The result obtained
after analyzing differed in both the research articles even though the analysis was based on
the MAS in context to addition of IT as well as the effect on the performance as a whole
(Soin and Collier 2013). From the first article it was seen that even there was a significance
of evidence obtained by MAS but they do not provide any significance in terms of higher
organizational levels. Whereas, the later article identified that manufacturing company
performance based on ABC influences the effectiveness of the techniques related to
accounting management. The outcome from the second research also stated that there is an
association between addition of IT as well as ABC use, which afterwards affects the
strategies developed for the business. As a result, the second study concludes that the

8A BRIEF STUDY ON MANAGEMENT ACCOUNTING SYSTEM
accounting management information, which are obtained, has a major importance in respect
to affecting the performance of the market as well the market profitability (Cooper et al.
2017). Hence, the diversified results were obtained from both the study.
Answer to question 3:
Final view regarding the significance of MAS in the field of competitive and unsure
business orientation:
From the two articles it is found that the result suggested a practical view point about
the significance of MAS identified the manufacturing company with the help of the
application as well as proper use of methods related to management accounting. Few studies
found that as the significance of MAS rises, the competitiveness as well as the vagueness in
the surrounding of the business also increases. The reason behind it is that in order to keep
pace with the competitive advantage, the company always adjusts themselves according to
the environmental changes that takes place. MAS helps in recognition, implementation as
well as assessment of possible suitable strategies of the company. This is done with the help
of observing as well as benchmarking those information gathered, which recovers the
performance. The result of few studies found that there have been positive relation between
information gathered from MAS as well as the performance of organization (Watts et al.
2014). Therefore, by considering different strategies with the help of both non-financial as
well as financial information and both external as well as internal information the top
companies of management attains the highest results. Thus, there is a lower connection
between information gathered from management accounting system and competitive as well
as unsure business environment. As a result, of this the significance of the MAS are being
moderated.

9A BRIEF STUDY ON MANAGEMENT ACCOUNTING SYSTEM
Many researchers studied about the theoretical arguments related to the advantages
acquired by the company while making strategic plans when using MAS. Firstly, the article
after analyzing the first half stated the management accounting system’s significance, while
in the other half the researcher found that the significance gradually decreases at higher level
of the company’s hierarchy (Maiga 2015). The above statement thus proves that as the post or
the level increases in the process of decision-making, the significance of MAS reduces.
Moreover, MAS is proved to be significant in planning strategy, which help few
companies strategy whereas, tactical managers makes decision depending on the additional
information collected externally besides the information gathered from MAS. The
significance of MAS as a whole in this type of cases reduces because they are found to be
critical to make operational as well as strategic planning even though external evidence are
collected by the strategic manager in order to make decisions. Further research from the
article found that the connection between strong competitiveness of business and the
performance of the structural market have moderated. The outcome generated from the study
have few limitations. This is because in manufacturing businesses, the organizations
functions. There may be difference in the implementation of information gathered of MAS
when improvised by private company and government owned companies in manufacturing
business (Hertati and Sumantri 2016). The reason behind it is that the structure in cost are
different in respective business.
Answer to question 4:
Recognition of four particular results for the management accounting
The article stated the significance of MAS for case company mentioned in the journal
while seen at tactical as well as operational level while significant at strategic level. This
happens because of the presence of strategic managers as they make decisions according to

10A BRIEF STUDY ON MANAGEMENT ACCOUNTING SYSTEM
their level of seniority. They depend on both external and internal levels. Thus, the
significance of MAS lessens due to questioning of authenticity of the MAS information
collected by the strategic managers. The first article also points out that training helps in
developing the skills related to accounting management and thus intends to achieve better
performance of the company (Keyes 2016).
The multinational company considered in the journal do not have any relevance
considering the MAS. Therefore, the results from the article suggested that decision-making,
application as well as training have a connection with information of MAS. These helps
managers to prepare themselves in a better way to set up modern accounting management.
The outcome generated from the article would help managers in understanding, designing
and maintaining the usefulness of cost structure, which represents corporates important task
(Theriou and Aggelidis 2014).
The findings of the second article proves that there have been significant relation
between cost accountants and corporates. It is because both of them takes risk in making
plans in investing in information technology and effectiveness of ABC with a proper business
strategy. The practitioners’ confidence will be enhanced as seen from the outcomes while
improvising the strategy involved in the business. This acts as implementation between the
addition as well as performance of information technology and the effectiveness of ABC. The
study also showed level of effectiveness of ABC in case of manufacturing industry is affected
by the addition of IT (Juras 2014). This affects difference in product strategy and low cost.
The researchers both theoretically as well as practically provides a support, that the IT
integration as well as level of effectiveness of ABC indirectly increases the performance of
organization. As per the theory, it can be stated that the cost accountant faces differences
while analyzing the influence of distinct innovation to the management because the
complexity present in the company. As a result, of the above statement they helps Australian

11A BRIEF STUDY ON MANAGEMENT ACCOUNTING SYSTEM
management accountant to enhance their knowledge on the association of variable in the
complexity of the business orientation (Bobryshev et al. 2015). Moreover, service industry
extends due to few application of the nature as well as strength of the outcome. The vast
application of the outcome in case of practical as well as theoretical approach provides
limitation to the study.
Conclusion:
To conclude the present report have presented an analysis as well as evaluated two
journal articles sourced from accounting management research journal. The report discusses
the application of methods related to accounting management as well as its influence on the
organizations performance in the field of manufacturing industry. The first journal considered
identifies the impact of the application of modern MAS in case of manufacturing industry.
While in the second article the influence on manufacturing industry because of application of
methods provided by the accounting system have been considered. Those accounting systems
are ABC as well as addition of information technology. They have been examined in the
second article. The first and the second article provided a mixture of results on the
management accounting system. The system generated positive outcome and the significance
of the MAS have lessened. It is because of intermediation because of few variables. Hence,
the results viewed from both the article could not be indiscriminate. This happens because the
influence of MAS differs in context to the organization where they are implemented.

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Management accounting in Russia: problems of theoretical study and practical application in
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Cadle, J., Paul, D. and Turner, P., 2014. Business analysis techniques. Chartered Institute for
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The case of the balanced scorecard. Contemporary Accounting Research, 34(2), pp.991-1025.
DRURY, C.M., 2013. Management and cost accounting. Springer.
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Society, 38(1), pp.50-71.
Hertati, L. and Sumantri, R., 2016. Just In Time, Value Chain, Total Quality Management,
Part Of Technical Strategic Management Accounting. International Journal of Scientific &
Technology Research, 5(4), pp.180-191.

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Juras, A., 2014. Strategic Management Accounting-What Is the Current State of the
Concept?. Economy Transdisciplinarity Cognition, 17(2), p.76.
Keyes, J., 2016. Implementing the IT balanced scorecard: Aligning IT with corporate
strategy. Auerbach Publications.
Maiga, A.S., 2015. Information technology integration, extent of ABC use, business strategy,
and performance. Journal of Applied Management Accounting Research, 13(2), p.61.
Oboh, C.S. and Ajibolade, S.O., 2017. Strategic management accounting and decision
making: A survey of the Nigerian Banks. Future Business Journal, 3(2), pp.119-137.
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