Achievement of Relevance
Topic 3: The Achievement of Relevance? ... In Relevance Lost, H. ... Tomorrows leaders will be those companies who have the foresight to lead management accounting back to the path of relevance from which it strayed over sixty years ago. ... The relevance of management accounting as it was suggested by Johnson and Kaplan (1991), did not state it’s true inclination towards the dominance of financial figures, the changing environment and the influential political concept of the critical theory. Lost of relevance? Loft (1991) illustrated that there was a dependency of management accounting on history findings such as researches on manuals, businesses archives, and articles in trade journals that has caused the lost of relevance in practices and theories. ... This is due to the failure of it to meet and respond to the change in the contours of the developing manufacturing industry such as the variety of products, ideas of empowerment, a diversified cultural environment, societal issues as it was explained by the social theory and others which has proved lost in relevance (Johnson & Kaplan, 1991). ... , Relevance Lost: The Rise and Fall of Management Accounting, Harvard Business School Press, 1987) This caused a shift from treating financial measures as the foundation for performance measures, to being only one of several measures. ... Critical Theory of Relevance of Management Accounting Conventional accounting which a widely known derivative of the neoclassical- economic theory where humans are assumed to act rationally and the role that management accounting plays here is to aid rational decision making. A critique of the importance of accounting in the concept of critical theory such as Foucauldian, and Marxist which was provided by Baxter and Chua (2001) demonstrated an irrelevant idea to management accounting by using the social theory which consequently shows the relevance of the social theory itself. ... Roslender also described the relevance in using behavioral science and organizational theory in management accounting research. ... Relevance Found in History and Contemporary Accounting Techniques Kaplan’s (1991) arguments that contemporary accounting today has some history substance to it in the context of modern formulation techniques is thus backed by Loft’s (1991) statement that “ We can only fully understand the present in the light of the past”. ... Conclusion The study of Johnson and Kaplan’s showed signs that the idea of relevance was lost due to the fact that the technique of management accounting was well developed thoroughly during the year of 1920’s. This is such because the change of cultural, political and economical environments, gaps of theories and practices, and outdated techniques as well as has brought the question of relevance in management accounting to light.