What is it about?
This paper uses a taxonomy as in biology (with plant and animal kingdoms) to describe the "tree-branches-leaves" of (1) tax accounting; (2) external statutory compliance financial accounting; and (3) internal management accounting used decision making.
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Why is it important?
There is an imbalance with excess emphasis on external financial accounting and insufficient emphasis on internal management accounting. This imbalance needs to be corrected.
Perspectives
Many accountants are in the 1960s. They need to get into the 21st Century and use progressive management accounting methods. CFOs are underserving their organizations executives, line managers, and employee team by providing them incomplete and flawed cost information with no visibility and transparency of costs. External financial accounting violates management accounting's "causality principle" with cause-and-effect relationships between resources expenses (e.g., salaries, supplies) and calculated costs of products, services, distribution channels, and customers.
Mr Gary Cokins
Analytics-Based Performance Management LLC
Read the Original
This page is a summary of: A Management Accounting Framework, Journal of Corporate Accounting & Finance, November 2001, Wiley,
DOI: 10.1002/jcaf.1210.
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