Trends in Management Accounting. Strategic Finance
The article discusses the rising trends in management accounting; which will include a brief history of management accounting, managing information technology and Customer lifetime value, Business analytic embedded in EPM methods. Also discussed are cost accounting, financial accounting and financial forecasts.
Cokins, discusses seven major trends in management accounting but before we get into this, let
look at the last four: Coexisting and improved management accounting methods, 6. Managing information technology and shared services as a business, and The need for better skills and competency with behavioral cost management. Business Analytics Embedded in EPM Methods
Business analytics and Big Data are hot topics. They are here to stay because complexity, uncertainty, and volatility are on the rise. When some managers hear these terms, they react with trepidation and think, "I took a statistics course in school and just wanted a passing grade and be done with it!" Today, the need for analytics may be the only sustainable long-term competitive advantage. Why? Because the traditional generic strategies, such as being the lowest-cost supplier or providing product or customer differentiation, are vulnerable to agile competitors who can quickly match a supplier's price or invade your customer base.
The activity drivers in an activity-based costing (ABC) system assign the activity costs to their final cost objects (such as products, services, channels, customers, and business sustaining). Ideally, they should be exactly proportional. That is, if the quantity of an activity driver increases 20%, its activity cost should also increase 20%. This isn't the case in poorly designed ABC systems. Again, with correlation analysis, the quality of the activity driver can be validated. If there is low correlation, then a new activity...
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