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Management Accounting

“As managers we need to be wary of the fad-like innovations proposed by management accountants. We know if our company is in control if we earn at least the required rate of return on our investments. At the end of the day the numbers don’t lie.”

The above statement tells that as a manager we should always be alert and cautious because of the latest or changing innovations introduced by the management accountants. As a manager we can see the performance of the company if we look at the rate of return on investment (ROV). If the company gives the required rate of return on investment as a manager we can tell that the company is in control. Management accountants might have used fad like innovations but finally they reach in to a single solutions. That means the different styles of approach to a given set of accounting data does not change its final output. Because management accountants dealing with numbers and these numbers wont never lie.

According to Kimberly (1981), in the field of management accounting there are basically two points of disagreement among researchers. First, some have defined innovation as a process whereas others have defined it as a discrete idea, practice or object. Second, the criteria that should be used to identify something as innovative have also been debated. Some see the criteria of newness emerging from the relationship of the idea, practice or object to the state of the art in the field out of which it originated. Other researchers, however, see the criteria emerging from the relationship of an idea, practice or object to the system that is adopting it. An innovation is an idea, practice, or object that is perceived as new by an individual or other unit of adoption. The element of “perceived as new” in this definition partially functions to distinguish between innovation and the related concept change. In other words it reports financial and non financial information that helps managers make decisions to fulfill the...