Managerial Accounting: Evaluating MAS in Multinational Firms

This report evaluates the role of management accounting systems (MAS) within multinational corporations, focusing on how these systems aid managerial decision-making and contribute to achieving business objectives. The analysis encompasses the implementation of various MAS techniques, including ABC/ABM, JIT, and TQM, as observed in a case study of a manufacturing company. The report examines the relevance of MAS to the operational and strategic management levels, highlighting instances where the system proved effective or limited. Furthermore, the report provides a comparative analysis of two case studies to identify similarities and differences in the findings regarding MAS implementation and its impact on organizational performance. The study explores the relevance of MAS in uncertain competitive environments and discusses specific outcomes and lessons learned from research findings, offering insights for management accountants in the Australian context. The report concludes with an assessment of MAS effectiveness and its importance for strategic planning and organizational performance.

Running head: Managerial Accounting
Managerial Accounting
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Abstract
The purpose of this paper is to evaluate the role of newly implemented management
accounting system into the organization and to explain in details about the provision of
the accounting information in case of the multinational organization mentioned in the
given case study. The paper further aims to identify the techniques used in MAS that
comes to be relevant for the operational activities of the organization. Further, paper
includes evidence with respect to MAS to be relevant or not in case f the multinational
company. It also aims to compare in terms of research findings between the two
companies using MAS. Hence, paper concludes about relevance of management
accounting system in case of uncertainty of competitive environment of the particular
company.

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Table of Contents
Introduction........................................................................................................................3
Evaluation of the role of management accounting system (MAS) and provisions of
accounting information.......................................................................................................4
Identification of any three examples of different types MAS methods or techniques
from the case study;.......................................................................................................4
Relevance of MAS to contemporary organization:........................................................6
Evidence with reference to the above from the given case study of the company:...6
Comparison of two case studies based on findings that discussed about
management accounting system and to determine whether both the companies
have similar findings or different one:........................................................................8
Conclusions that can be made about MAS relevance in today’s uncertain competitive
business environment..................................................................................................10
Specific outcomes or lessons that are learned from each of two articles and its
research findings that will be useful for management accountants in Australian
companies to learn from:.............................................................................................12
Conclusion:......................................................................................................................13
Reference........................................................................................................................15

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Introduction
Contemporary management accounting techniques in the form of Activity Based
Costing, Balanced Scorecard, and Just in Time or Total Quality Management are
certain techniques that have gained much importance (Alcraz et al.,2016). Management
accounting has become much useful for business managers of the organization. Certain
modifications has been brought about in conventional management accounting systems
and has further lead to contemporary system of management accounting that is helpful
and significant to take decision by managers for the firm (Beratan 2014)). Inappropriate
accounting system selection for firm can negatively impact into either strategic or
operational functions as well as for firm positions. Contemporary management
accounting has several benefits but also its implementation is quite successful which is
a very important part and is also an unsolved issue that limits the benefits that comes
through derivation of new techniques of management accounting. There comes certain
challenges of the industry along with globalized competition and since macro-economic
conditions are fluctuating in that case management accounting plays a vital role to save
the industry for offering it an advantage over its value over its insignificance.
Contemporary accounting techniques lead to improvement into organizational
performance. Management control functions have become the part of user friendly
system for line management. Management accounting systems and provision of
accounting information helps the management of the business firm for making decisions
and has become comparative advantage for competitive edge. Designing of efficient
management system for costs is a very important task for business firms and also for
their management accountants. There arises management system based on technology

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across value chain for supporting of business strategies. The paper involves to discuss
in details about three different management accounting methods or techniques used in
the specific case study. It also includes the evidence behind Management Accounting
System and its relevance for contemporary organization. Further the discussion would
involve the comparison for findings for two different cases of real life company based on
how MAS. Hence, the paper involves relevance of MAS to competitive uncertain
business environment and it also discusses about particular outcomes from research
findings from both the case studies.
Evaluation of the role of management accounting system (MAS) and provisions of
accounting information
Identification of any three examples of different types MAS methods or
techniques from the case study;
Basically MAS techniques which are useful are: ABC, BSC, JIT, TQM and
standard costing (Collier 2015). Managers of the business firm can seek for information
on the basis of the above mentioned management accounting system techniques. As
per the given case study we can find that MAS technique of ABC/ABM, JIT as well as
TQM has been used in the case study. From the case we can find out that Company-A
being the manufacturer of easy process with raw materials and of less steps used for
process of manufacturing uses ABC/ABM MAS technique as a standard form which
became very complicated and could not serve their needs and requirements and the
same happened when JIT technique was used(Edwards 2014). Management
accounting system techniques was implemented for being independent of each other

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and has used generalized procedures and had an utilization for aspects of system.
Company-A made use of certain activity drivers for allocation of overheads, for running
of specific scorecards and had an internal benchmark systematically as well for external
as well as for utilization of several supplies and several deliveries in time and also have
made proper use of TOTAL Quality Management (TQM) that has incorporated them
with safety (Fullerton, Kennedy and Widener 2014).
ABC/BSC techniques have been considered unimportant for the manufacturing
purpose of the company. On the other hand TQM has been considered significant
technique by the company for incorporation into its process and has been used for
modification purpose of the organization. ABC was considered to be unsuitable
technique for manufacturers. This technique used was impractical with respect to
simplicity of the process of manufacturing of the business firm (Goetsch and Davis
2014). Further managers of the company made use of Total Quality Management
technique at the level of operation and made certain control over several variances over
the purchases of supply chain. Use of this special technique overall became successful
and made free from pressure with respect to several variances. Management
accounting system had used specific techniques which were implemented into
operation by managers of the company and decisions were taken based on information
collected through this and its relevance was considered to be absolute.

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Relevance of MAS to contemporary organization:
Evidence with reference to the above from the given case study of the company:
We can find it out from the given case study that with respect to the decision
making of the particular multinational company operational management does not rely
wholly on the internal information through management accounting system (Grant
2016). This company’s management of a tactical position can have faith on the basis of
information collected by the managers through relevant techniques of management
accounting system. On the other hand there can be evidence relevant to the given case
that management of the strategic position within this specific multinational company also
find management accounting system to be less relevant for collecting information for
decision making purpose in case of manufacturing purpose(Jarrar and Smith 2014). In
the case it be seen that Company –A dealing with manufacturing process its strategic
managers very rarely act as per the process of management accounting system. It can
be further found from the given case that strategic managers of the company focuses
rare on external factors inclusion of macro as well as micro economic indicators , trends
related to technologies as well as indicators of market also in certain significant cases
management accounting system techniques are very irregularly implemented by them
for the company becomes relevant. Specific examples can be cited as well from the
case study that becomes relevant to the case whether MAS is relevant to the
organization’s operational purposes or not. Use of management accounting system has
been implemented to the company is limited has led to less expansion of the system
(Jalzabkowski and Kaplan 2015). The evidence from the case shows that management
accounting system used by Company-A being the manufacturer reveals the complexity

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of the information collected through the techniques used by the management and
certain kinds of functions became unnecessary.
Management accounting system has become irrelevant to the company and has
received with its specialty for collection of data and for report producing that is
unessential (Jordao, Souza and Avelar 2014). Example-it has become relevant in the
case where Company-A in the given case has rolled back with installation instead of
making any modifications to the management accounting system. Company-A can be
seen to response very well to the MAS techniques used for developing internally which
can also be called variance distribution of multi-level. Another example can be extracted
as an evidence purpose from the case study is- the above technique had the aim of
variances tracking with the KPIs and budgeted figures are used for the company in
order to trace and allocate for the manufacturing business of the company for sale
purpose. Overall it is evident from the given case study that as per research findings
management accounting models are not appropriate for company. MAS have led to the
failure the reason behind which is there have been no strategies implemented for
planning purpose. Hence, it becomes evident that there has not been full utilization of
management accounting system. Example- there shows an argument in the case study
that that management accounting system did not hold any relevance for Company-A at
the strategic level as it came out with limited scope behind implementation of such
techniques.

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Comparison of two case studies based on findings that discussed about
management accounting system and to determine whether both the companies
have similar findings or different one:
As per case 1 in case of multinational organization we can find that crisis of the
company led to contemporary management accounting system (Lavia and Hiebl 2014).
It can be found that in order to get the way out for strategy related to acquiring of and
divestment company could face certain reporting of finance and owned management
accounting system as well as used several techniques related to that. Findings from the
case 1 give relevance to the fact about the company that management accounting
system was used with the believe for incorporation of several divisions of company’s
business into one separate system. It can also be found in case 1 that either the
location or particular financial reporting as well as management accounting information
which can be accessed at global level came to give with very necessary and useful
benefits and hence it can be found that it brought about a change in the form of further
motivation. As per findings there has been relevance of new implementation of
management accounting system in the form of two different parts as follows:
 It became useful for investigation purpose for information that could be provided
to the management of the company for all levels decision making purpose
(Marginson et al., 2014).
 The great extent into which the function of newly implemented management
accounting system had the necessity of adaptation for meeting up with the needs
as well as requirement of the users of the company(Maskell, Buggaley and
Grasso 2017).

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In case 2 in case of banking organization it can be found that changes has been
brought about in implementation of management accounting system has brought about
improvement into the performance of the organization. There has been overall increase
into the performance of the particular banking organization in the case 2 through
management accounting system. There raised the direct relationship between
performance of the banking organization as well as management accounting system
which brought about implementation into the procedures of banking organization
(Mustaffa, Yusof and Kamaruddin 2014). As per the findings in case 2 there has been
the most important result of management information system on performance of the
organization. There has been a positive impact of the implementation of new
management accounting system which brought about 44.3% of change in case of
performance of this particular banking organization which became possible only due to
management accounting system. Each and every variable plays an important role as an
influencing factor in the form of management accounting system to improve more and
more of organization’s performance. Positive impact of MAS on banking organization
performance becomes evident through the findings of case 2.
As per findings of the study in case 2 the main focus has been on management
accounting system as well as on banking organization’s performance and the research
based on that gave bout positive impact to the organization. Certain positive measures
are considered which brought about positive impact for this organization in case of MAS
implementation (Myers 2019). From the findings it can be concluded in case 2 that
contemporary management accounting model became successful in case of operational
activities of this particular banking organization. The model implemented with

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development brought about positivity and success of the banking organization. The
management accounting system contributed to its performance in high range of
uncertainty situation and circumstances as it included most competitive actions as well
as demand of market.
It can be observed that both the cases have different findings which contrast
them from each other. Findings in case of case 1 shows that management accounting
system became necessary for the business firm for its decision making process by the
management as well as for its operational purpose for manufacturing(Nguyen, Mia and
Chong 2017). But it could be found out that company did not response well to the
implementation of MAS. The information collected through different techniques of MAS
became irrelevant. MAS models remained to be inappropriate for the company. It did
not serve for its planning purpose and neither could it serve for its well functioning. On
the other hand in case of case 2 there has been the positive impact of MAS on the
organization performance. Contemporary management accounting model led to
success of the organization with respect to its operational activities. As in case of
uncertainty MAS has been used by the organization that led it to increase its demand in
the market in the competitive edge. Hence, it can be seen in case of case 2 there has
been positive relationship between MAS and organization performance on
implementation of MAS techniques.
Conclusions that can be made about MAS relevance in today’s uncertain
competitive business environment:
The evidence in the given case study reveals that contemporary management
accounting system could not be utilized well by Company-A. With respect to the

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utilization by the management of the company at all the levels type as well the scope of
MAS and the failure that took place all due to implementation of management
accounting system brought about an argument that further suggests that information
collected in the form of management accounting through different MAS techniques does
involve relevance at certain points but it does not hold any importance or significance at
strategic level of management as there raised failure due to improper strategic
plans(Osadchy and Akhmetsin 2015). It can also be concluded that there has been
significance in case of research that reveals with the truth that Company-A did roll back
the implemented management accounting system. Argument takes place in case of
relevance of management accounting system for Company-A where plans took place at
correct time with certain measures taken forward but still it came out with the failure.
There has been the complexity into the implemented MAS which was unacceptable for
the management of the company that impacted with the decision further for system
rationalization (Otley 2016). Further it can be brought into the conclusion that there has
been no satisfaction for the user that came to be an important barrier in case of effective
implementation of newly management accounting system. Previously system used
could not offer with good range of information or capability in the form of expansion so it
could be considered in that case that newly management accounting system was well
understood by users and could serve the management with unique advantage over the
previous one(Psomas, Vouzas and Kafet 2014). It can be seen that removal of functions
could be considered as a method to return the management with consistent information.