Corporate Management Accounting Systems Are Inadequate For Todays Environment Accounting Essay


Corporations are now-a-days implementing distinct accounting system to maintain its data that helps organization in defining their huge data in an effective and efficient manner. In the large organizations accounting manager can notavoid effective accounting system beacuse it helps their corporation to make rational decisions, and can have convenient access. The reason that accounting systems are uneffective for today's environment because of the complexity of the huge data that is illustrating each detail. Corporation needs such management accounting system that will fulfil the requirements of corporation with respect to the current environment. In manufacturing industries raw material is purchased and transport in many of the regions. The continous transformation raise this problem because many of the countries facing problem related to the external environemnt such as political,economical,technological, socialogical, and legal. In order to deal with this complex situation the corporations must adopt such acconting system that fulfill the requirements of the organization, and have easy access of the system, which incur low cost. The big corporations are dependend on a unique highly specialized which makes big difference for these organizations.

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Corporate management accounting systems are insubstantial for the current environment. In this era of advance or fast technological change, exuberantly global and domestic competition, and monstrous expension of information ongoing proficiency, management accounting system is not accomodating appropraite information on order to execute the control, product costing and achievement assessment tasks of managers.

The management accounting system play an important role it has the elementary function in making financial budget of each department and implement it in an efficient manner. These management accounting systems are highly expensive that is why corporation need such system that incur low cost and fulfil their requirements. Most of the accoutning system charge on the monthly basis and corporation have limited access in term of number of uses.The corporation has to give training , initaiy the problem will accour for few months, and corporation also has to make sure that their employees will be feeling secure with this technology. In order to handle this accounting system the corporations need specialized worker or individual having high potential in using and handling the accounting software this is the reason organization has to spend a lot on these management accounting system.

Now-a-day the cyber war is going on among different competitors the result is taking place as hacking of the corporation data, and the power failure occur in most of the countries. The corporation should make sure that the result will be accurate and timely . Few problems can be occur like unappropraite software or hardware which is not suporting the management accounting system.

The fundamental role of the management accounting system is to make it simplier or quicker that can easily implemented in the organizaion to make its business strategy. After implementing the facilitating acounting system the corporation has to communicate these tactics throughtout the corporation. The corporation is not having appropraite control over the accounting system because they need specialized worker.

It is very true that corporate management accounting systems are inadequate for today's environment. As we know this is the time of rapid technological change, globalization, active global and domestic rivalry, and very much expanding information processing capabilities, management accounting systems are unable to provide well-timed information for process control, product costing and performance appraisal activities of managers. Accounting is not a finish in itself, other than a means of achieving business victory. The role of accounting information inside an organization first and foremost is to make easy development and implementation of business stratagem.

Under this vision, business management is a constant process of a) formulating strategies b) Communicating these strategies all the way through the organization c) Budding and moving out tactics to put into practice the strategies and d) increasing and implementing controls to check the success of strategy in terms of achieving planned objectives of the organization. Accounting has a role to play in each one and every step in the management procedure described above. Internal Accounting system's focal point is narrowly on producing monthly earning story. And in spite of the extensive resources devoting to computer in monthly basis revenues composition, the development does not gauge the actual raise or drop off in economical value that has occurred during the period.

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Management accounting reports are of little assisting in operation managers as they attempt to lessen cost and get better productivity. Regularly, the reports reduce productivity for the reason that they requires operating managers to squander time attempting to comprehend and explain reported variances so as to have little to do with monetary and technical reality of their operations. By not given that timely and providing information consistently and making it effective or by focusing on contribution such as direct labour that are comparatively insignificant in today's production situation, the management accounting system not only be up to snuff by giving appropraite data to head of the department but mostly it disconcert its concentration from factors that are serious for making productive changes effectively. Management accounting system also deteriorate to make available the accurate product costs. Costs are dispersed to products by naive and subjective measure, frequently direct labor based, that do not stand for the requirement made by every manufacture on the firm's supply, even if simplistic product costing method are sufficient for financial reporting requirements. The methods defer values for inventory and or cost of goods sold with the intention of satisfying external reporting and auditing necessities. The methods analytically prejudice and distort costs of individual products. The usual fabrication costs systems consist for many of the organization's usually show the way to huge cross subsidies across products. When such distorted information correspond to the only available data "product costs" the danger exist for wrong reconciliation of product price, and its product source, product mix, and reaction to rival products. Lots of firms give the impression to be falling victim to the danger.

As a final point managers seek agreement to the short-run circle on the monthly basis profit and loss statement. Management accounting system takes care of many cash spending for as expenses of the time in which they are completed even though these outlays will benefit prospect periods.