Effect of Globalisation on Management Accounting

Between 600 to 1450 CE, a Scientific Revolution sparked a new way of thinking which inspired inventors and changed how people behaved. People will go from producing goods with their hands to producing goods by machines. The shift and behavior of people caused an economic revolution, which we call today the Industrial Revolution. The Industrial Revolution that occurred in Great Britain happened in two phases. The First Industrial Revolution occurred from 1840-1870, while the Second Industrial Revolution occurred from 1840-1914.

This text is still relevant to business today because it had the most basic processes for accounting some that are still used today; it is very outdated but nonetheless still quite useful

The Agricultural Revolution was a time period in which farmers begin to use efficient ways to plant things. This event led to fewer people being needed on farms since the machines used for farming only need a few workers. Because farming took fewer workers, the population of Europe increased. Workers were able to have a life outside of the harsh labor of farming. The Agricultural Revolution helped paved the way for the Industrial Revolution in Britain. The industrial revolution was a time period in the 18th century in which the British experienced changes in technology and an increase in power. These technological changes made possible a great increase in the use of natural resources and the mass production of manufactured goods. Although the industrial revolution seemed like a helpful event to the people of Europe, it caused more damaging effects than it did good.

1 Second Industrial Revolution: Following the first Industrial Revolution, the Second Industrial Revolution, also known as the Technological Revolution, proceeded to emerge at the tail-end of the 19th century, going into the 20th century. Like the First Industrial Revolution, this revolution provided an advancement of technology, but with more tedious inventions. These advancements helped America pave ways for better communication with the telegraph, updated sanitation elements such as water supplies and sewage systems, and cumulated a new wave of globalization.

Management accounting is a political technology, constantly evolving to meet demands of stakeholders of a company and to facilitate competitive advantage. A management accountant acts as a tool to devise and implement strategies. Pre-1920, decision-making processes were executed using strictly financial instruments such as cost profit analysis. “The growth of modern corporation, between 1880 and 1925 provided stimulus for development in innovative management accounting practices” (Kaplan, 1984). Due to the prominence of the world trade organisation and international monetary fund, trade barriers have

MC Wells ‘A Revolution in Accounting Thought’. The Accounting Review. V.LI. No.3. July 1976. pp471-82. The article does not have an abstract – write an abstract of no more than 400 words. A short guide to writing an abstract is provided. ----Answered by Wenxin

The second industrial revolution was the change of our world even though many people moved from rural homes into cities because they can't get accepted in jobs and it started in the 1870-1944 after the civil war because “ during this time, many advances in technology and factories made it easier and quicker for farmers and manufactures to produce more goods and products to be sold.”

The accounting system we use today started in Venice in renaissance period over 520 years ago. The trade business increased hugely during this time and all the financial recordings had to be written down to help people see how their business is doing. During that time in 1494 the first book about was published in accounting by Luca Paciolli and was called “The Collected Knowledge of Arithmetic, Geometry, Proportion and Proportionality”. He was called “The father of Accounting” and most of his described principles have been used up until this day.

To over view the knowledge we learnt from accounting theory and practice, the main thing I can conclude that is the tendency of accounting will shift away from technical way to people’s behaviour way. By understanding what should do, we should ask why and how we could improve and change it into a better way. This essay aims to explain how the theoretical material that we learn in lectures can be developed under a real practical manner.

When determining and defending the use of a particular ethical system within the confines of a profession, it is important to evaluate the system in terms of the professional culture as well as the expected professional conduct laid out within the vocation itself. The accounting profession has been evolving for thousands of years. Early accounting records date business transactions back as far as third century B.C. (Schroeder, Clark, & Cathey, 2009). Early record keeping was for internal purposes and as societies and economies expanded, it became important to maintain records for external purposes as well. According to Schroeder, Clark & Cathey (2009), by the ninetheeth centruy, bookkeeing expanded into accounting (p. 3). From this time, it has been the duty of the accountant to serve the public interest and the profession has been culitvated into an organizational culture with professional norms and standards constantly taking shape in an effort to complete an all-inclusive conceptual framework.

The definition of accounting theory according to Coetsee (2010) is described in two different ways. The first philosophy concludes that accounting theory is a set of general principles that guide the evolution of accounting practice. The other philosophy describes accounting theory as activity of explaining and predicting accounting practice. What the viewer can see from the statement of the first philosophy is that the accounting theory exists before accounting practices meanwhile the latter states that the accounting practice exists before the theory. Since there are many arguments about this matter, many academic researchers have concluded that accounting theory can be divided into two categories which are positive and normative theory.

Accounting is the art of measuring and communicating financial information. To maintain uniformity and consistency in preparing and maintaining books of accounts, certain rules or principles have been evolved. These rules or principles are classified as concepts and conventions. One of the important concept in accounting is “Measurement” (Mattessich, 1977)

Accounting is the language of business. It is a profession that is being guided by principles, concepts, conventions, laws, etc. All these fundamental building blocks serve as common and general compasses to all practitioners of the profession. In some cases, they are nation-wide tailored, while in other cases, they are universally tailored. Accounting as a living, practical, dynamic and realistic profession covers so many areas of social, economic (business), and governmental activities. Surely, any endeavour that involves monetary and material activities create a room for the services of Accounting. Many of the human endeavours for which the accounting profession plays significant (some times inevitable) roles include; Banking, Insurance, Manufacturing, Farming Contracting, Oil and Gas, Mining, Transportation (Air, Land and Sea), Educational Institutions, Churches, Ministries, ICT, Hire Purchase, Local Government Authorities, Estate Businesses, Export and Import Businesses, Bill of Exchange Transactions, Royalties Transactions, Consignment Transactions, Stock Market Transactions, Sports, Entertainment, Hospitals and Hospitality Industry, etc.

Generally, the accounting professionals calling in the United States as well as in the whole world seemed to be focused on the readiness and examining of money related articulations. Many people consider Certified Public Accountants (CPAs) and different experts of accounting while saying financial accounting. In any case, in different parts of the world, management accounting order is a division of the accounting field (Sahi and Dua 2012). Management accounting and financial accounting are two distinct callings in such locales. Administration accounting, as a sub control, manages money related and non-monetary data to bolster a scope of administrative choices. Then again, money related accounting focuses on monetary information just to bolster both loan bosses' and financial specialists' choices on capital allotment (Kinney and Raiborn 2008). Management accounting fundamentally concentrates on enhancing business execution yet not guaranteeing that the business complies with the set measures. From this perspective, it is evident that monetary accounting dominates management

The Burns and Scapens framework for analyzing managerial accounting change was built on the study of old institutional economics, which sees "economics as a process of social provision, subject to multiple and cumulative causation." This view culminates in a model that argues that the managerial accounting practices at institutions are subject to a process of constant change, influenced by routines and rules. The institutions contribute to these routines and rules, but so do actions on the part of managers within the institutions. By combining multiple influences over time, we arrive at modern managerial accounting practice. In other words, Burns and Scapens tells us that managerial accounting practice changes over time, influenced by a number of factors including rules, routines and actions.