Question

write a 2000-word critical literature review on any topics related to managerial accounting but outside the topic areas covered in class.

Possible Topics of Projects

The following list is for your reference only. You are not limited to it. You may choose any topic you wish as long as it is related to managerial accounting.

As A project

About

1.	Performance measurement, benchmarking, balance scorecard.
2.	Corporate governance, social responsibility and managerial accounting.
3.	Intellectual capital, management accounting practices and corporate performance
4.	Link between Knowledge Management and Managerial Accounting
5.	The role of managerial accounting in the knowledge economy
6.	The relationship between management accounting and entrepreneurial orientation
7.	The future of management accounting in the digital era - Explorative study of using Big Data in data-driven decision-making.
8.	Integrating Data Mining into Managerial Accounting System: Challenges and Opportunities

Answer 1

Performance measurement,

1. In managerial accounting performance measurement is something that measures the actual performance of the company with respect to the forecasted performance, inorder to know the deviations from the performance expected and the company is capable of.
2. And then management puts an investigation as to the variences between both the performances, analyses the results of such investigation.
3. Proper corrective actions are taken and forecast for the coming years are prepared based on the previous outcomes.
4. Performance measurement is a continuous process as every company will always be in search of improvement better than it presently performs, reduce the costs and increase the quality of the products and then ultimately satisfy the customers.

Benchmarking,

1. Benchmarking is a Japanese performance enhancement strategy, wherein companies which are related to each other, and also companies which are not at all related but have some of the common departments, compare each other's performance in the respective areas identify the pros and cons of each other's processes and implement the best of both companies processes.
2. This type of strategy helps in mutual development of the businesses, which will be beneficial for both the parties.
3. Three types of benchmarking usually happens which are process benchmarking, strategic benchmarking, product benchmarking. This depends on the type of company.
4. Benchmarking is different from internal comparision of the same company, because comparing the same company one may not able to learn new things, so benchmarking tool has arrived where companies compare with world class company in search for improvement.
5. One of the example of company providing benchmarking is as follows,

The J.D. Powers Company provides the automotive industry and its customers with benchmarking that establishes how well various aspects of an automotive product satisfy buyers. The coverage is comprehensive and produces rankings in several areas:

• Initial Quality: Assesses car quality by "analyzing problems reported by owners in the first 90 days of ownership."
• Dependability: Uses reports by the original owners of three-year-old autos to determine which are the most reliable.
• Overall Performance and Appeal: Powers' Automotive Power Execution and Layout study uses the responses of more than 80,000 buyers to establish how satisfied they are with their vehicles after the first 90 days. J.D. Powers notes that auto manufacturers rely on the APEAL metrics for future production and design decisions.
• Sales and Service: Uses several specific benchmarks, such as customer satisfaction related to original tire equipment, to create a profile of each automobile related to its sales and service performance.  

Balanced score card,

1. Also known as BSC approach,
2. It is a performance measurement technique, which measures both financial and non financial aspects of performance.
3. Balanced score card approach is developed by Kaplan and Norton.
4. Many performance measurement techniques only considers financial aspects for measuring the performance, but non financial information is also as important as financial for the proper functioning of any company.
5. There arose the requirement for non Financial performance measurement tools, balanced score card approach is one among those.
6. The four perspectives of balanced scorecard are as follows,
   1. Financial perspective,
      • The balanced scorecard uses financial performance measures, such as net income and return on investment, because all for-profit organisations use them. Financial performance measures provide a common language for analysing and comparing companies. People who provide funds to companies, such as financial institutions and shareholders, rely heavily on financial performance measures in deciding whether to lend or invest funds. Properly designed financial measures can provide an ag­gregate view of an organisation’s success.
   2. Customer perspective,

      • In the customer perspective of the Balanced Scorecard, managers identify the customer and market segments in which the business unit will compete and the measures of the business unit’s performance in these targeted segments. This perspective typically includes several core or generic measures of the successful outcomes from a well-formulated and implemented strategy.

        The core out­come measures include customer satisfaction, customer retention, new customer acquisition, customer profitability, and market share in targeted segments. But the customer perspective should also include specific measures of the value propositions that the company will deliver to customers in targeted market segments.

   3. Internal business process perspective,

      • In the internal-business-process perspective, managers identify the critical internal processes in which the organization must excel.

      • These processes enable the business organizations to:

        i. Deliver the value propositions that will attract and retain customers in targeted market segments, and

        ii. Satisfy shareholder expectations of excellent financial returns.

        The key to excellence in any organization is control of its processes to produce reliable and consistent products and services. Performing the right processes in the right manner leads to consis­tent levels of product and service quality. The difficulty lies in finding the right process variables to measure and setting the standards appropriate to performance levels of each of the process measures. Process and operational measures are leading-edge measures that are more short-term-focused.

   4. Learning and growth perspective,

      • For incentive purposes, the learning and growth perspective focuses on the capabilities of people. Managers would be responsible for developing employee capabilities. Key measures for evaluating managers’ performance would be employee satisfaction, employee retention, and em­ployee productivity.

        (a) Employee Satisfaction:

        Employee satisfaction recognises the importance of employee morale for improving productivity, quality, customer satisfaction and responsiveness to situations. Managers can measure employee satisfaction by sending surveys, interviewing employees, or observing employees at work.

        (b) Employee Retention:

        Firms committed to retaining employees recognise that employees develop organisation-specific intellectual capital and provide a valuable non-financial asset to the company. Furthermore, firms incur costs when they must find and hire good talent to replace people who leave. Firms measure employee retention as the inverse of employee turnover—the percent of people who leave each year.

        (c) Employee Productivity:

        Employee productivity recognises the importance of output per employee. Employees create physical output (i.e., miles driven, pages produced, or lawns mowed), or financial output (i.e., revenue per employee or profits per employee). The number of loans processed per loan officer per month would provide a simple measure of productivity for loan officers at a bank.