Effect of Globalisation on Management Accounting

6683 Words Aug 3rd, 2013 27 Pages
CHAPTER 4

CHANGES FACING MANAGEMENT ACCOUNTANTS IN POSTMODERN TIMES
4.1 INTRODUCTION

In seeking answers to typical questions associated with morphogenic change (see paragraph 3.2), it becomes apparent that business, and consequently management accountants, have been faced by a confluence of forces of change during the past decade. Chapter 3 defined change, and more particularly the concept of morphogenic change. The three major drivers of change were discussed in paragraph 3.3, namely computer and communication technology, globalisation and the influence of knowledge management in business organisations.

Verma (2002:9), in her deliberations on the impact of change on the development of accounting (based on research by Gray and Hofstede
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Even business activities that involved "world trade" were structured to create few problems (Wyatt 2002:4).

During Toffler's First Wave, accountants were required to keep a record of cash transactions. However, Wyatt (2002:4) states that even in those early days it became evident that more information would become necessary.

According to Lloyd (2002:4), researchers such as Chatfield and Vangermeersch (1996:13) who examined source documents dating back to 1530, have been able to prove the existence of cost or management accounting at the time. An analysis of one such document describes arithmetic techniques to deal with particular problems of the merchant bookkeeper related to decision making (Lloyd 2002:7). During this First Wave Pacioli developed concern for cash budgeting and variance accounting (Cunagin & Stancil 2002:I).

The Agricultural Revolution soon gave rise to Toffler's Second Wave, known as the Industrial Revolution.

4.2.1.2 Management accounting and Toffler’s Second Wave (18th century - late 20th century)

Wyatt (2002:5) traced changes that took place during the Second Wave and states that enterprises embarked on production activities during this period. The history (see paragraph 2.4.2) indicated that the change in production activities created new accounting challenges.

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