FACTORS THAT INFLUENCED THE CHANGE IN MANAGEMENT ACCOUNTING  part 1 1000w

Accounting is a process of identifying, measuring, and communicating economic information to permit informed judgements and decisions by the users of the information’

The history of accountancy has progressed in combination with civilization and commerce. The literature provides evidence that Paciolo in 1494 founded the concept of accounting by publication of ‘Summa de Arithmetical’. He presented accounting in methodical form that became a science later on.

The definition suggests that accounting is about providing economic information to others and it relates to the financial or economic activities of the organisation. Accounting information is identified and measured by the way of a set of accounts or double-entry bookkeeping.

2.1.1 Management accounting

Management accounting is that part of accounting which provides decision making information to managers for use in planning and controlling operations (Seal at all, 2006). The term of management accounting is defined by numbers of authors (Shank, 1989, Back-Hock, 2019, Nanni at all, 2019) in that management accounting provides information to develop performance measures and includes all planning and monitoring in an organisation. Simon et al., (1954), cited by Jarvenpaa (2017) described the role as the traditional role of management accounting. The role was an operational scorekeeping where accounting information was used to satisfy the organization’s reporting obligation.

2.1.2 The rise and fall of management accounting

The arrival of Johnson and Kaplan’s publication Relevant Lost: The rise and fall of management accounting (1987) plays an important role in the direction that teaching and research may adopt in the near future. J&K states that the decline of management accounting began in the 1920s when most of the management accounting techniques known today were practically developed. According to J&K the fall of management accounting was mainly due to the ever-increasing cost of implementing a detailed and efficient internal product cost system.

J&K argued that management accounting techniques had not change since 1920s. Up to 1980’s many countries enjoyed operating in protective environments. Oversees companies were limited to operating in the domestic market with barriers to communication, geographical distance and sometimes protected markets (Drury, 2003). Since 1980s many orga