Traditional
Performance Measurement Systems
Traditional
Performance measurement system tracks only the financial performance
of the organization relating to profit earned from selling to the
capital required. They focus solely on financial measures based on
internal accounting reports such as profitability, revenue, cash
flows, earnings per share (EPS), return on assets (ROA),economic
value added, etc. These measures are known as lag indicators as they
only reflect the past data and represent historical performance
(Kaplan...
December 26, 2012
Comparing Strategic Management Accounting with Traditional Management Accounting
“Strategy is
the direction in which the organization plans to move to attain its
long-term goal” (Anthony & Govindarajan,
2007). Strategy is concerned with the long-term direction of the
business organization, the scope of its operational activities, the
matching of operational activities to its resource capabilities and
its competitive environment, giving consideration its stakeholders
values and expectations (Porter, 1996 ; Anthony & Govindarajan,
2007).
Traditional
Management Accounting has tended to concentrate on the tactical...
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