Academic journal article Management International Review

The Behavioral Implications of Management Accounting

Academic journal article Management International Review

The Behavioral Implications of Management Accounting

Article excerpt

Introduction

In recent years, the field of management accounting has witnessed significant progress in the development of new and refined accounting and control techniques. These developments include innovations in such areas as computer based systems, flexible budgeting, improved costing procedures, and the application of a variety of quantitative approaches in the gathering, analysis, and reporting of accounting data. It seems clear that management accounting is rapidly moving into a new era of increased technical expertise and sophistication. Yet, in one critical dimension, management accounting still appears to be in the "dark ages". For while, on the one hand, accountants are becoming increasingly expert in developing and using powerful technical tools, on the other hand, they still tend to display an almost total lack of awareness concerning the behavioral considerations involved in the use of these tools. This is particularly unfortunate because, to the extent that accounting techniques can sometimes cause undesired behavioral responses, the more powerful and sophisticated these techniques become, the more likely that their misuse from a behavioral standpoint will result in unanticipated and undesired results for the organization.

There have been numerous articles written in the past five years or so on topics dealing with various aspects of the behavioral implications of accounting but apparently research and writing in this area has had little effect to date on management accounting practices. There are several possible explanations for the failure of practicing management accountants to be more concerned about the behavioral implications of accounting. First, change takes time. The introduction of behavioral accounting topics into the education and training of accountants will be a long and slow process. In fact, it may be necessary to develop a whole new generation of accounting instructors who themselves are concerned about behavioral matters before any real impact will be made on accounting education. This means that it could be many years before practicing accountants will have received appropriate education in behavioral theory. Of course, those individuals who are presently working in management accounting may never be exposed to behavioral concepts unless they are willing to invest in some form of continuing education or training activities. Unfortunately, it appears that even when management accountants do participate in continuing education programs their goal is almost always to improve their knowledge of technical procedures and little interest is expressed in courses dealing with behavioral topics.

A second reason that may explain the lack of interest by accountants in the behavioral aspects of accounting is that very little of the literature of behavioral accounting provides any workable guides to action. The study of the behavioral implications of accounting is so new that much of the research and writing in this area is still concerned with defining the problems and developing research methodologies to solve them. As a result, it is difficult for those practicing accountants who are aware of the literature to find anything that is immediately useful for their day-to-day activities. Nevertheless, the fact that it is not possible at this time to develop a detailed prescription for a behaviorally sound management accounting system is not sufficient justification for the existing apathy about these matters. It is likely that substantial improvements could be made in the effectiveness of present-day management accounting system if accountants simply were more aware of the behavioral problems associated with their work and reflected this awareness in their interactions with other people in their organizations.

A third reason that management accountants have not been more concerned with behavioral matters is related to similar disinterest on the part of many managers. Management accounting does not exist in a vacuum and if the management of an organization is not concerned about modern behavioral views of the management process, it is unlikely that the accountants in the organization will feel any real need to worry about such matters. …

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