Management accounting has been developed in the past. The paper discusses advances in management accounting research over the last 20 years by three areas, which are respectively responsibility accounting, Balanced scorecard (BSC) and Tableau de Bord (French). Critically analysis should be used in this paper for these three areas, and then compared with between BSC and Tableau de Bord. The finally, according to the shortage management accounting research, this paper should provide several recommendations.
Management accounting has been developed ‘in widespread since the 1950s’. It is a relatively new glossary (Jones, 2006). However, ‘management accounting is a complex and many-faced concept. It is also known that the process of accounting knowledge production is a social construction’ (Locke and Lowe, 2009). Sizer (1989) and Jones (2006) expound that ‘Management accounting is concerned with the internal accounting within a business’. In order to ‘manage cost and make decision’, it will provide financial and non-financial information to managers.
In addition, ‘it is not required by law, but if they did not they would not survive long’ (Jones, 2006). Management accounting is based on modern management science, and then improves economic benefit so that it offers large information to managers (Chadwick, 2011), so management accounting research will support the improvement of management accounting. Editorial (2010) indicated that ‘over 20 years have now passed since the first volume of management accounting research appeared in 1990. ’
During approximately 20 years’ development time, management accounting research has produced diversified methods. The paper should discuss three areas which respectively are responsibility, balanced scorecard and Tableau de bord. Responsibility accounting is one of core element of management accounting (Drury, 2000). Responsibility accounting is the development of a variety of accounting management system. Its common is throughout basic principles of an economic responsibility.
However, the difference is the previous economic responsibility system cannot clearly direct relation with accounting. Responsibility accounting combines between economic responsibility and accounting form practice and theory. And then, it becomes an area of the accounting (MBAlib, 2011). ACCA (2001) indicated that ‘Responsibility accounting is a system of accounting that segregates revenues and costs into areas of personal responsibility in order to monitor and assess the performance of each part of an organisation.
Drury (2008) also indicated that ‘Responsibility accounting involves the creation of responsibility centres’ which are ‘any part of an organisation which is headed by a manager who has direct responsibility for its performance’ (ACCA, 2001). And Drury (2000) involved accumulating costs and revenues for ‘each individual responsibility centre’ are responsibility accounting’s objective. Therefore, ‘the deviations form performance target (especially the budget) can be ascribed the individual who is responsible for the responsibility centre’ (Drury, 2004).
Actually, there are four types of responsibility centres: ‘cost centres’, ‘revenue centres’, ‘profit centres’ and ‘investment centres’ (Elliott, 2008). Through these centres, they can make various units within the range of responsibilities work positively so that it can ensure each centre goals are came true (Edwards et al, 1994). Additionally, Jones (2006) issued that ‘a key aspect of responsibility accounting is that the manager is responsible for controllable costs, but not uncontrollable costs. ’
Social responsibility accounting belongs to the scope of management accounting essentially. It is a necessary approach to achieve value maximization of long-term strategic objective. The establishment of BSC solves a drawback that long-term strategy cannot combine with short-term goals in traditional management system. BSC, a strategy implementation tool, can make more close and operational between social responsibility accounting and organisation's strategic goals, in order to play appropriate role. (Drury, 2008; Jones, 2006; ACCA, 2001)
Drury (2008) indicated that the aim of BSC is to ‘use integral performance measurement to track and adjust business strategy,’ so that makes ‘it possible to see aggregate financial consequences of non-financial measures that drive long-term financial success. ’ Usually, BSC has four perspectives for enterprises: ‘Financial perspective (What is important to our customers? )’, ‘Customer perspective (How do customers perceive us? )’, ‘Internal business perspective (Which internal processes can add value? )’ and ‘Learning and growth perspective (Are we innovative and ready for the future? )
Financial performance indicators can display organisation's strategy and whether implementation contributes for improving organisation's profit. Financial perspective is usually concerned with profitability. Its operational measures include operating income, ROCE, EVA, etc. (Drury, 2008). However, not all long-term strategy can produce short-term financial profit quickly. The improvement of non-financial performance indicators, such as quality, production time, productivity and new products, etc. , is a mean by achieving purpose. (ACCA, 2001)
Customer perspective Drury (2008) offered a simple definition for customer perspective is ‘the customer and market segments in which the business unit will compete. ’ And the operational measures of business unit in these target customer and market (Jones, 2006). Drury (2004) indicted that ‘Customer perspective underpins the revenue element for the financial perspective objectives. ’ In addition, customer perspective usually includes market share, customer profitability, return policy and claims and complaints handling, etc. ACCA, 2001).
Balanced scorecard requires enterprise explains detailed customer-related goals and points by vision and strategy. According to the direction of target customer and market, the enterprise should pay attention to whether they satisfy with the demand of customer or not (Locke & Lowe, 2009). Actually, customers pay high attention to five aspects: time, quality, performance, service and cost. The enterprise establishes and achieves clear objectives by vision and strategy so that they can appear their customers.