Research issues Essay Example | Topics and Well Written Essays - 2000 words

Research issues - Essay Example Although authors like Horgen, Datar and Foster 2003 (as cited in Boyns & Edwards, 2013, p.22) provided separate definition of these two terms, it is difficult to see where they draw a line in-between these two. They defined management accounting as â€Å"It measures and reports financial and non-financial information that helps managers make decision to fulfil the goals of an organization† and defined cost accounting as â€Å"measuring and reporting financial and non-financial information relating to the cost of acquiring or utilizing resources in an organization†. As evident from these definitions, there is actually no difference in these definitions besides the shift of focus. Where one focus on achievement of organizations goal, the other focus on cost of resources that will help the organization to achieve it resources. It is evident that management accounting is the accounting, which will help organization in achieving its objectives. The widely accepted definition of management accounting according to the  Chartered Institute of Management Accountants, is "the process of identification, measurement, accumulation, analysis, interpretation and communication of information used by management to plan, evaluate and control within an entity and to assure appropriate use of and accountability for its resources. Management accounting also comprises the preparation of financial reports for non-management groups such as shareholders, creditors, regulatory agencies and tax authorities"  (CIMA Official Terminology, 2005). History The belief about the history of management accounting is that it existed even before the incorporation of large multi-national organizations. The small organizations doing business at that time also had the need to survive in the long run and needed the maintenance of positive cash flows to achieve this survival. These organizations needed some to direct their affairs to achieve their objectives. Those allotted the position of responsibility to achieve these objectives clearly needed specific information and details of the business to ensure long-term survival. As these details were supplied in form of accounting information, these firms were following management accounting even at that time. However, as there is no tangible proof to verify this history, it has not allotted much importance (Boyns & Edwards, 2013). The basic start of management accounting is associated with E.I du Pont de Nemours and Company, common name DuPoint. In 1903, the owners of the company Coleman, Alfred and Pierru du Point took a challenge upon themselves, which lead to the proper establishment of management accounting. The company was majorly a gunpowder manufacturing company, a very successful company facing severe competition, it was at that point its owner decided to start â€Å"forward integrating† by establishing their own network of branch sale offices throughout the whole United States. They also initiated â₠¬Å"backward integration† by buying out numerous of their supplier, with this they emerged as the largest vertical company in the United States. This huge structure of the organization created frenzy on how to manage it and lead to the innovation and use of management accounting techniques of budgeting and return on investment so that