The Role of Management Accounting in Organizational Control Systems: Preliminary Evidence of an Organic Approach

Ahrens and Chapman go on to introduce their article by giving a background knowledge of modern perceptions of management control systems through their mention of related literature. Some key points discuss pertain to the author’s

Overall Strength: in general, the article provides structure to a concept that is very intangible by: (a) describing the nature and the functions of control; (b) segregating the MCS into categories: core control system, organizational structure, and organizational culture; (c) illustrating how to apply the control model (satisfied my approach) (d) provides a basis for designing and evaluating the system. The manner, in which the model is presented, with its use of figures, further emphasizes the structure of the model. See below on further emphasis on parts (a) -(c).

INCLUDES SOLUTIONS INCLUDES MARKERS’ REPORTS This is a three (3) hour paper. You have ten (10) minutes reading time. There are seven (7) questions. There are eight (8) pages, including this one. You must answer all parts of all questions. The questions are not of equal value. All answers must be written in blue or black ink. Show all relevant working.

The chances of failures can be decreased by executing the checks on the systems. These keep an eye on the systems preventing risks from occurring, and these checks are avoided as the interior controls. The motivation behind the inner controls is to keep the organization safe from risks associated with the modernized accounting-system risks. Organizations change their manual accounting systems to computerized accounting systems for different reasons, this incorporates the points of interest, and the explanation behind utilizing electronic accounting information is instinct. The organizations embrace the policies of their

Hilton, R. (2011). Managerial accounting: Creating value in a dynamic business environment (9th Ed.). McGraw-Hill. Hardcover ISBN: 9780073526928.

Folk, M., J., Garrsion, H., R., & Noreen, W., E., (2002). Introduction to Managerial Accounting. New York, NY: McGraw-Hill/Irwin.

Critically examine the above statements by analysing the contribution of traditional management accounting techniques in an organisation, the necessity for modern management accounting techniques and the role of accountants in the implementation of the modern management accounting techniques in an organisation.

The next lever, the management control process, consists of four sections. The first of these is programming, which must come from strategy and be monitored to remain consistent with the firm’s objectives. The second process is budgeting, which need to fit with strategy formulation and programming. The last two of the four sections is measuring and reporting. These two sections focus on the “need for activities that measure and report both financial and nonfinancial information” . The measuring and reporting of a firm’s management control can be related to budget information and the motivation process. What a firm spends to drive motivation, and the amount of motivation that comes from it, can create contrasting cultures that needs information to why that is the result. Since this lever can be manipulated quickly, it is one that managers should focus on.

1.1 This report has been prepared to cover the assessment criteria requirements of AAT learning and assessment area ‘internal control and accounting system.

Feedback: Management accounting is the preparation and use of accounting information systems to achieve the organization's objectives by supporting decision makers inside the enterprise. LO 4

Department of Accounting and Finance Caulfield campus, Monash University 900 Dandenong Road Caulfield East VIC 3145

The measurement of performance is a great challenge in the contemporary business world since the non-financial targets are hard to ascertain. It implies that an organization could end up with inefficient and ineffective MACS that lead to poor utilization of resources and ultimately increase the probability of organizational failure. The increasing strategic uncertainty creates a problem to quantify the non-financial factors that could be incorporated in internal controls (Hirst, 1983). Unavailability of qualitative targets also creates cases of dysfunctional behaviors by subordinates in achieving organizational objectives. For a holistic perspective on performance, control strategies must incorporate non-financial indicators since the gains are more than the associated costs (Otley,

Arnold and Hope (1983) defined that management accounting is considered to provide the information to managers to assist them to make decisions about the ways in which an organisation’s resources should be allocated. Puxty (1998) said that a framework should be provided because of many different approaches that can be taken to define a subject. Also, in order to understand management accounting, it is necessary to study the assumptions and reasoning behind the various frameworks (Puxty, 1998). Therefore, Puxty (1998) categorised a wide variety of perspectives on management accounting into five frameworks, which are the traditional paradigm, the systems movement, the

In the rapidly changing business environment, there is enormous pressure to conduct activities in a better, controlled and efficient manner. The accelerating change creates uncertainties and complexities thus creating challenges for management in their strategic plans. Management cannot continue to rely on Management Accounting Control Systems whose primary emphasis is on financial targets since such traditional analytical approaches can fail to adapt to the quick and unexpected economic landscape. The use of information systems for control has been widely adopted to deal with such challenges, but the current business world places a greater imperative on non-financial targets hence the MCS tools need to capture non-financial perspectives. This paper provides that managers must not rely on quantitative performance targets hence supports the argument for setting non-financial targets in organizational objectives

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.