�Analyze how an organization�s forecasts, budgets, revenues, costs and cash flows correlate with one
another. What additional data should be captured and reported in a managerial accounting system?
�Analyze the role planning factors play in driving profits. Explain how data reported by the managerial
accounting systems can be turned into information relevant for adjusting future plans. In other words, how
is the data used in developing information required to operate an organization�s planning-control
Managerial Accounting System Design
A Managerial Accounting System is a system used to gather the information that is
necessary for the administration to evaluate the performance of various organizational resources
while satisfying the organization’s strategies. An accounting system design involves the process
of planning and implementation of an accounting system that is used to record, store and access
the organization’s monetary resources to implement organization strategies.
This existence of such a system is meant for the better and efficient administration of the
accounts of a business organization with the motive of attaining the objectives of the
organization.A Managerial Accounting System provides financial reporting systems and
enterprise resource planning systems of how employees and managers are evaluated and
managed based on their performance.
The information in these systems is important to managers as well as the involved
stakeholders since it is used for the effective decision-making process and accountability
purposes. The accounting information available is essential in providing security information and
predicting the economic growth(Ward, K. 2012). It is also used for performance evaluation based
on quantifiable evidence.
Therefore, planning and control of Managerial Accounting Systems should predict
contracts in the design process and provide a theoretical explanation of why such contracts are
incomplete under property organizations. Management control is the process of assuring that the
company’s resources are obtained effectively in the accomplishment of the organizational goals.
Managerial accounting systems provide necessary material in which the outcome of the decisions
are measured through managerial accounting. A cycle of data is then created through analysis of
the reported results. The analyzed report is then developed for the purposes of strategic planning
of the organization where factors such as finance, tax, and social contests are put into
Managerial accounting systems are used in the provision of relevant information. These
results are reported and analyzed creating a cycle of information. The outcome of the decisions is
then measured through supervisory accounting(Bedford, D., 2015). It is necessary for these
decisions to be developed within the premeditated planning of the organization and take into
account other factors.
A noteworthy subject of managerial accounting costs examination. Implementing such a
system would prove to be quite costly. However, the debate of cost efficiency is in contention
theory. A simplified example of an ideal managerial accounting system is revealed by the
secondary school accounting system. Schools handle school fees by distinguishing between
adjustable and stable costs(Cadez, S., & Guilding, C. 2012).They also reveal more details in their
cost study. In an outdated costing model, there were single cost drivers, but this model is now
considered inadequate for the current rapidly changing business environment.
Dynamic Adaptation of Managerial Accounting Systems
For the purposes of quality managerial accountability, Managerial Accounting systems
have to be well adapted to the business entity to meet the user requirements. These systems need
to have a credible functionality and well suited in their functionality.
A managerial accounting system must therefore adapt in the rapid changes of the
organization. This is meant for the organization’sexistence and survival in the nearby future and
its continuous growth and expansion. The major causes for the dynamic adaptation of these
systems include globalization, customer preference and the changes in technology. Due to these
reasons, companies strive to make the existent systems adapt to their existing businesses(Becker,
J., et al 2013) Organization which fail to adapt to these changes face extinction in the ever
It is for these motives that businesses try to meet the needs of the stakeholders in their
entities to be able to subsist in the long run. Therefore, this means that the goals of the employees
and stakeholders must be met for credibility purposes and to ensure that the business meets the
market needs. To elaborate this, the organization should attempt to counter the reasons
highlighted previously to meet its goals.
Changes in technology must be realized and swiftly adapted to meet the ever growing
customer needs. This entails strategies of changing or updating the existing systems with respect
to technological advancement to cater for customer needs. Theinvention and application of the
internet enables businesses to interact with the customers and other parties that are associated
with the organization.
This is essential in creation of rapport between the organization and important individuals
that contribute to the growth of the organization. Moreover, communication links should not
only be existent but efficient in their functionality. It is vital that these systems support good
communication especially within the organization to meet its objectives(Yigitbasioglu, O. M., &
Velcu, O., 2012)
It is important to note that for the survival of any system, customer needs must be met.
This is usually prompted by customer preference which is bound to change with time due to the
diversification of user needs. Therefore the accounting system should be quite flexible to meet
the changes for the organization to realize its goals and meet it objectives(DRURY, C. M.,
2013). The system should be able to keep record of these changes and maintain its credibility
with the organizational specifications.
Globalization tends to have an impact on such a system in society. Accounting plays a
big role in the business which aims in achieving its priority goals. A Managerial Accounting
System measures the events of an organization in monetary value and is essential in predicting
the market trends .It is through this that business transparency is realized
Becker, J., Kugeler, M., & Rosemann, M. (Eds.). (2013). Process management: a guide for the
design of business processes. Springer Science & Business Media.
Bedford, D. S. (2015). Management control systems across different modes of innovation:
Implications for firm performance. Management Accounting Research, 28, 12-30.
Cadez, S., & Guilding, C. (2012). Strategy, strategic management accounting and performance: a
configurational analysis. Industrial Management & Data Systems, 112(3), 484-
DRURY, C. M. (2013). Management and cost accounting. Springer.
Ward, K. (2012). Strategic management accounting. Routledge.
Yigitbasioglu, O. M., & Velcu, O. (2012). A review of dashboards in performance management:
Implications for design and research. International Journal of Accounting
Managerial Accounting System Design