MODERN ACCOUNTING SYSTEMS

Modern accounting systems made a difference in modern organizations?

Modern accounting systems made a difference in modern organizations?

Introduction

Today, because of revolution in management accounting, both smallest corner store and largest multinational organization start their own innovation on their accounting perspective. They were successful by applying new cost accounting model such as ABC systems and JIT system to improving the cost accounting system. Their Sociological perspective can be understood as a point of view that focuses not on individuals but their group or society, this is another concept that can be improve the value of modern management accounting system.

Nowadays, most successful organization are more and more concentrate on the management accounting system innovation, by using both technical model and sociological/behavioral perspectives to improve the value in their management accounting system. The following essay will discuss the organizations how to apply the management accounting systems to improve the working performance, and guide the employees achieving the goals.

Discussion

Simon (1995, p5) states that modern accounting systems as “the formal information-based routines and procedures managers use to maintain or alter patterns in organizational activities”. Management accounting systems plays an important role in management accounting, it helps the directors to make decisions in daily operation and give good strategies of the business. In general, this system collects and uses information to aid and coordinate the planning and control decision. Moreover, the main point of management accounting systems is to guide the behavior of the managers and employees to achieve the goal. In addition, management accounting systems collects both financial and non-financial information inside and outside of the company. Management accounting systems could depart as formal and informal control system.

However, according to Simons' definition of modern accounting systems the formal management accounting systems much more helpful to aid the company achieve the goal. Because to the formal management accounting systems itself, it includes the explicit rules, procedures, performance measures and incentive plans so that it could guide the behavior of its managers and employees. The formal management accounting systems consists of some systems and management accounting is one of the formal systems that provide information about revenue, cost and income, and according to this information. The manager could create the strategies and improve the working performance. This kind of system referred as a technical control system. However, only the technical accounting systems are not good enough to guide the manager and employees ...