The design of management accounting system has to take into consideration the decision needs of the managers. Also it has to take into consideration the new themes and challenges that managers face currently.
Horngren identified four such themes in the tenth edition of his book.
1. Customer focus: The challenge for managers it invest sufficient resources to enhance customer satisfaction. But every action of the organization has to result enhanced profitability or maintained profitability for the organization.
2. Key Success Factors: These are nonfinancial factors which have an effect on the economic viability of the organization.
Cost, quality, time and innovation are important key success factors. Management accounting systems need to have provisions for tracking the performance of the organization and its divisions as well as competitors on these success factors.
3. Continuous improvement: Continuous improvement or kaizen is a popular theme. Innovation related to this area in costing is kaizen costing .
4. Value Chain and Supply Chain Analysis: Value chain as a strategic framework for analysis of competitive advantage was promoted by Michael Porter. Management accountants have to become familiar with the framework and provide information to implement the framework by strategic planners.
Design of Management Accounting System
Re: Design of Management Accounting System
Management accounting systems (MAS) provide an information context that is required for strategic sensemaking. Research from the interpretive perspective of information processing suggests some mechanisms how MAS can contribute to strategic sensemaking, although it neglects the relationship between MAS use and MAS dimensions. The systems-structural perspective identified some important MAS dimensions, but it does not explain how these dimensions contribute to strategic sensemaking. The objective of this study is to explore the role of MAS in sensemaking and how MAS dimensions contribute to this role. Based on 30 interviews with top and middle managers from 7 large companies we suggest a set of MAS dimensions that relates to sensemaking.