Accounting Management Essay

In the contemporary business environment accounting management plays a particularly important part because it contributes to the effectiveness of the financial performance of organizations and helps them to monitor their financial performance. In fact, accounting allows organizations to assess their current performance and make forecasts concerning their further business development. In this regard, the effectiveness of accounting affects the overall organizational performance.

Managerial accounting concepts and principles imply the transparency and the high accuracy of accounting. Errors are absolutely unacceptable in the contemporary accounting because they lead to the poor accounting and miscalculations that may lead to long-run negative financial effects of organizations (Kaplan & Bruns 45). Companies that have unreliable accounting systems face the high risk of the deterioration of their financial performance, whereas systematic errors in the accounting may lead to the decline of their financial performance.

In this regard, the job order costing is an important issue in the contemporary accounting. The job order costing allows companies to assign costs to the production of certain products or services that allows organizations to obtain accurate information on the costs of production as well as to plan their production costs in the future. Companies tend to rely heavily on the job order costing as they have to monitor their costs of production which may affect their competitive position. Companies with lower costs of production are normally in an advantageous competitive position because they may conduct more flexible pricing policies. In such a way, accounting helps companies to manage their production process and maximize the effectiveness of funding of the production.

Another important aspect of the contemporary accounting is the adequate assessment of the process cost systems. Process costing systems allow companies to conduct the extended analysis of costs of production of various products and services and they are not bound to the specific product but rather provide opportunities for companies to compare costs of production of similar product lines. In such a way, they can conduct the comparison of their production process to that of their rivals as well as they can compare production processes and their costs within their production lines to find out the most efficient ones and those which need changes to optimize their financial performance. Such assessment is helpful for the optimization of the overall organizational performance and improvement of the production process.

In addition, the contemporary accounting cost behavior and cost volume profit analysis. Such analysis helps to conduct the adequate assessment of costs of production and other processes within organizations (Staubus 78). The cost analysis is pivotal for the overall assessment of costs companies spend. The cost behavior and cost volume profit analysis helps to identify possible ways for the improvement and rise of cost efficiency of companies through the introduction of changes that aim at the development of effective policies that help companies to improve their performance consistently. Such analysis is essential to identify weak and strong points in the production process and other processes that affect cost changes within the organization.

Accounting opens wide opportunities for the accurate budgeting of the organizational performance and all processes involved in business operations conducted by companies. Budgeting relies heavily on the data obtained by accountants as well as forecasts, which accountants make or which may be made on the ground of the accounting data available (Drucker 153). In addition, accounting allows conducting the performance evaluation for decentralized operations, which helps to make the organizational performance more flexible and, therefore, more effective in the contemporary business environment.

Thus, accounting is pivotal for the organizational development and performance as well as maintenance of the financial stability of contemporary organizations.

 

Works Cited:

Drucker, P. F. Management Challenges of the 21st Century. New York: Harper Business, 2012.

Kaplan, R. S. and Bruns, W.  Accounting and Management: A Field Study Perspective. Harvard Business School Press, 2010.

Staubus, G. J. Activity Costing and Input-Output Accounting. Richard D. Irwin, Inc., 2014.

The terms offer and acceptance. (2016, May 17). Retrieved from

[Accessed: November 27, 2021]

"The terms offer and acceptance." freeessays.club, 17 May 2016.

[Accessed: November 27, 2021]

freeessays.club (2016) The terms offer and acceptance [Online].
Available at:

[Accessed: November 27, 2021]

"The terms offer and acceptance." freeessays.club, 17 May 2016

[Accessed: November 27, 2021]

"The terms offer and acceptance." freeessays.club, 17 May 2016

[Accessed: November 27, 2021]

"The terms offer and acceptance." freeessays.club, 17 May 2016

[Accessed: November 27, 2021]

"The terms offer and acceptance." freeessays.club, 17 May 2016

[Accessed: November 27, 2021]
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