Management accounting: this century and beyond

The focus of cost management should be on decisions. The management accounting system has two simultaneous missions: (1) transmission of information to help reach wise economic decisions; and (2) motivation of users toward organizational goals. Three noteworthy developments in management accounting during the past 30 years have been: (1) emphasis on contribution reporting: (2) zero-base budgeting; and (3) activity-based costing (ABC). ABC has several welcome and unwelcome influences on cost accounting systems. The search for cost accounting systems that better link causes and effects is unending. Cost-benefit trade-offs between desires for simplicity and elaborate systems are dominant considerations.