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Minggu, 11 Mei 2014

HISTORY OF MANAGEMENT ACCOUNTING

In the 1880s, American manufacturing company began to concentrate in the development of large-capacity production technology. The managers and engineers at the metal company has developed a procedure to calculate the cost of the relevant product called scientific management. This procedure is used to analyze the productivity and profit of a product. However, as the development of accounting thought so after the procedure in 1914 began to disappear from the company's accounting practices.

After World War I, there is a financial accounting rules that have reduced the impact of accounting information useful for evaluating the performance of subordinates in large companies (lost relevance). Until 1920, all managers believe the information related to primary production processes, transactions and events which result in a nominal amount in the financial statements.
After 1925, the information is used by managers to be more simple and a lot of manufacturing companies in the U.S. have developed management accounting procedures as it is known today. 

During a period of more than sixty years, accounting academics trying to restore the relevance of accounting information rooming with financial accounting information. The attempt to use a simple model of manufacturing companies, similar to the 19th century textile company, and in order to address the problem of production, academics reorder inventory kos reporting information. Nevertheless, the model is too simple to explain the real problems faced by managers but it how the information in order to facilitate boarding derived from the financial statements can be made relevant to the decision-making (management kos).

Beginning in the 1980s to the present, management accounting experience a period of rapid growth with its role as a chaperone financial accounting.
Johnson and Kaplan write beautifully in "Relevance Lost: The Rise and Fall of Management Accounting". Book a decent enough read to understand about management accounting. 

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