Essay on Management Accounting and the Modern Business Environment

2822 Words Oct 30th, 2012 12 Pages
Management Accounting and the Modern Business Environment Part-I
Over the years global business environment has gone through some massive changes. These changes are due to changes in socio-economic situations, changes in consumers’ demands, changes in technological environment, changes in political scenario etc. Today’s business environment is referred to as the modern business environment which is characterized by globalization, advanced technology, intense competition, powerful customers and consumers, efficient and effective processes, social responsibility etc. Globalization is perhaps the most widely used and investigated terms in the modern business environment. Globalization has removed almost all boundaries among different
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Management control systems however is a broad concept that not only includes the above mentioned aspects, but also includes various other controls like action, social and personnel controls. There are two main elements in management accounting control systems. The first one is “the formal planning processes” like long term planning and budgeting (Drury, 2008). The second one is responsibility accounting; it involves the formation of responsibility centers that initiate the process of allocating the answerability for financial outcomes and results to the individuals in the entire organization (Drury, 2008). While designing effective management control systems it is very important to take into account the current circumstances.
Management Accounting and the Modern Business Environment Part-III
Modern business environment is very much complicated as there are large number actors who are involved in larger number of activities. The strength of management accounting control system is that it is based on strong fundamentals. It is true that in the modern business environment problems are more critical than they were in older business environment. However since the basics of management accounting control systems are build upon strong fundamental concepts, it is expected that most of the complicated problems can be solved through this system. However,

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