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Management Accounting - Coggle Diagram
Management Accounting
Traditional Budgeting
Incremental
No incentive to change
Starts with last year's figures
Assumes the world is predictable
Not competitive
Slow respond to the external factors
Facing economic uncertainty
Traditional Approach
Standard costing
Preparing budgets
Little attention to external environmental factos
Changes in cost structure make it no longer usefull
Quantitative & Financially-oriented
Developments in MA
Emergence of Information Technology(IT)
Increased competition & globalisation
Decentring of accounting knowledge
Increasing importance of non-financial indicators
New Approach
Ideas
Feed-backward information
Comparison of today's actuals to previous prediction
Feed-forward information
Using today's context to forecast future results
Non-financial indicators
Underlying factors lead to improvements
Customer satisfaction
Product quality
Long-run aims