Limitations Of Management Accounting


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Limitations Of Management Accounting

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Comparatively, Management Accounting is a new discipline and is still very much in a state of evolution. Therefore it comes across the same impediments as a relatively new discipline has to face-sharpening of analytical tools and improvement of techniques creating uncertainty about their applications.

 

  1. There is always a temptation to make an easy course of arriving at decision to intuition rather than taking the difficulty of scientific decision-making.
  2. It derives its information from financial accounting, cost accounting and other records. Therefore, strength and weakness of Management Accounting depends upon the strength and weakness of basic records.
  3. It is one thing to record, interpret and evaluate an objectives historical event converted into money figures, while it is something quite different to perform the same function in respect of post possibilities, future opportunities and unquantifiable situation. Execution of the conclusions drawn by the management accountant will not occur automatically. Therefore, a continuous effort to achieve the goal must be made at all levels of management.
  4. Management Accounting will not replace the management and administration. It is only a toll of management. Of course, it will save the management from being immersed in accounting routine and process the data and put before the management the facts deviating from the standard in order to enable the management to take decisions by the rule of exception.
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We, at BMS.co.in, believe in sharing knowledge and giving quality information to our BMS students. We are here to provide and update you with every details required by you BMSites! If you want to join us, please mail to contact@bms.co.in.

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