Management accounting is one of the crucial parts in accountancy. It helps the
plan making, assists in making decisions, measures the performance, increases the
efficiency and so on. This assignment will focus on describing the development of
management accounting in recent years and do a comparative analysis in the countries
that are selected which are Sri Lanka, Turkey, Malaysia and Indonesia and finally get
the conclusion.
Management accounting originated in the industrial revolution in the 19th
century. In this early stage, most companies are strictly controlled by a few owner
managers who borrow according to personal assets and relationships (Ahmad, 2013).
With no external shareholders and unsecured debt, detailed financial reports
are hardly needed. In contrast, management accounting is relatively complex and
provides the basic information needed to manage the early mass production of
textiles, steel, and other products. After the turn of the century, as capital markets,
creditors, regulatory agencies, and federal income taxation imposed new pressure on
companies, financial accounting requirements developed rapidly (Ahmad, 2013). In
order to take advantage of these huge external capital pools, company managers must
provide audited financial reports. Since external funding providers rely on audited
financial statements, independent accountants are very interested in establishing clear
corporate financial reporting procedures. After the turn of the century, the inventory
costing procedures adopted by public accountants had a profound impact on
management accounting. Therefore, for decades, management accountants have paid
more and more attention to ensuring that financial accounting requirements are met
and financial reports are issued on time.