How to rejuvenate a mature business

The last two decades has seen a revolution in management accounting theory and practice due to the challenges of the competitive environment in the 1980s. Kaplan and Johnson (1987) identified the failings and obsolescence of existing cost and performance measurement systems which led to re-examination of traditional cost accounting and management control systems. Conventional financial and management accounting methods have developed primarily as a result of corporate legislation in the 1930s forcing companies to provide externally …

…s leader . Present cost accounting and management control systems were developed almost a century ago when the nature of competition and demands for internal information were very different from what they are today. Accounting and financial executives must redirect their thinking from external reporting to the more effective management of their companies’ tangible and intangible assets. Internal management accounting systems also need renovation. This essay has highlighted the ways in which these can be done.