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The Evolution of Management Accounting - Coggle Diagram

- - - - Second, the management ac- counting system provided sales reports and 8 exible budgets that indicated promptly if actual results were deviating from planned results. They specihed, furthermore, the adjustments to current operations that division managers should make to achieve their expected performance goals. The sales reports and the advanced flexible budget system provided, then, for control of each division’s actual performance.
    - - Third, the management accounting system allowed top management to allocate both re- sources and managerial compensation among divisions on the basis of uniform performance criteria. This simultaneously encouraged a high degree of automatic compliance with company-wide financial goals and greatly increased the division manager’s decentralized autonomy
    - - First, it provided an annual operating forecast that compared each division’s ex ante operating goals with top management’s financial goals. This forecast made it possible for top management to coordinate each division’s expected performance with company-wide financial policy.