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Case Study

MANAGEMENT ACCOUNTING PRACTICES IN NIGERIAN COMPANIES

BY
ADELEGAN, OLATUNDUN JANET (MRS), CA
Lecturer of Accounting and Business Finance in the Department of Economics
University of Ibadan, Ibadan, Nigeria,

4. Introduction
7. The Problem
Revised International management accounting practise 1 (IMAP #1), published in March 1998 by the Financial Management and Management Accounting Committee (FMAC) of the International Federation of Accountants (IFAC) states that Management accounting is an activity that is interwoven in the management processes of all organizations. Management Accounting refers to that part of the management process which is focused on adding value to organizations by attaining the effective use of resources by people, in dynamic and competitive contexts. It involves distinctive technologies (modes of thought and practice.)
Management accounting, as an integral part of the management process, distinctly adds value by continuously probing whether resources are used effectively by people and organizations - in creating value for customers, shareholders or other stakeholders.
In this regard, resources include not only financial ones, but also all other resources created and used by organizations as a result of financial expenditures. Thus, information and knowledge, work processes and systems, trained personnel, innovative capacities, morale, flexible cultures, and even committed customers may be included as resources - along with special configurations of resources that may be identified as strategic capabilities, core competencies or intellectual capital.
The field of organizational activity encompassed by management accounting has developed through four evolutionary yet recognizable stages, namely; Cost determination and Financial Control, information for management planning and control, reduction of waste of resources in business processes and creation of value through effective resource use.
The role of Management...