Managerial Accounting Case Study

Chapter 1

1.1 Introduction

Globalization and recent developments in technology have rapidly changed the business environment significantly (Dumitru et al., 2011). Consequently, changes in the business environment cause changes in organizations, how they operate, trade, and how they are managed these changes significantly changed in Management Accounting Practices and the role of management accountants in organizations (Xydas-Lobo et al., 2004; Al Omiri and Drury, 2007; Waweru, 2008; Surani, 2013).

The change in management accounting has been a topical issue in international research in management accounting (Dumitru et al., 2011).

Management Accounting can be defined as management-oriented accounting or accounting in relation to management

As a response to these changes researchers turned into the study of changes and innovations in managerial accounting, and nowadays we are witnesses of a re-evaluation of managerial accounting in terms of developing new techniques and systems (Yazdifar & Tsameny, 2005). Traditional managerial accounting techniques such as absorption costing, budgeting and profit-based performance measures were replaced with such things as strategic management accounting, activity-based costing (ABC), strategic cost management, non-financial measures, balanced scorecard (BSC) and target costing. Some of them, for example, ABC and BSC, have also gained a degree of popularity in practice” (Jarvenpaa, 2007). Moreover, the most notable contribution is considered to be activity-based costing (Cardos and Pete,

As noticed by them, complexity of businesses and their activity environment has increased considerably in the last decades.

In recent years, the expanding level of worldwide has increased the challenge for managers, and specialists have cautioned that if management accounting is to maintain its relevance, it needs to adapt the changing needs of managers, and in response to this concern, a range of new MAPs has emerged (Pavlatos and Paggios, 2008).

The concern on management accounting has become more popular since 1987. When Johnson and Kaplan discussed that the management accounting was not keeping step with the latest technology. The current changes in manufacturing technology and information technology has made Management accounting more advanced. The evolution and adoption of management accounting to meet the changing needs in today 's world is much appreciated by many organizations (Talha et al., 2010).

Changes in MAPs have become interesting research topics in recent decades. Following Johnson and Kaplan (1987), MAP has been further developed for better decision making and management control (Tuanmat and Smith,