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Evolution of Management Accounting Control System (MACS) (Traditional…
Evolution of Management Accounting Control System (MACS)
Traditional Standard Costings, Budgeting: variance analysis budgetary control techniques...
Implications
Disadvantages
demotivate innovation because deviation from the processes can be punished
Advantages
create governable individuals being accountable for performance
enhance financial reporting by providing quantified period performance
features
correct suboptimal use of resource: human, material, finance
Focus on efficiency, identify and mitigate sub-optimal resource utilization
Innovative
control systems
Implications
Advantages: hus management controls gear toward fostering innovation and information accessibility . Thus is the need for contingency management control approach rather than universal approach.
Disadvantages
Driven by technological advancements
and global competition.
Total quality management
Just-in-time production
Lean Production
Activity-based Costing
Enterprise Risk Management
(ERM) system
Address weaknesses of
internal control systems
inward perspective
Bureaucracy
Gaming incentives
takes broader firm-wide risk-based perspective