Brainz Academy

Management accountants can use different costs and different information for different purposes because their discipline is not required to adhere to generally accepted accounting principles when providing information for managers’ internal use. In the United States, financial accounting standards are established by the Financial Accounting Standards Board (FASB), a private-sector body. There are no similar board to define universal management accounting standards. However, a public-sector board was established in 1970 by the U.S. Congress to promulgate uniform cost accounting standards for defence contractors and federal agencies. The board produced 20 cost accounting standards (of which one has been withdrawn) from its inception until it was terminated in 1980. The board was recreated in 1988 as an independent board of the Office of Federal Procurement Policy. The main objectives are to

•Increase the degree of uniformity in cost accounting practices among government contractors in like circumstances;
•Establish consistency in the cost accounting practices in like circumstances by each contractor over time
• Require contractors to disclose their cost accounting practices in

Adhering to the rules required for companies bidding on or pricing cost-related contracts for the federal government. Accountants have always been regarded as individuals of conviction, trust, and integrity. The most important of all the standards listed are those designated under integrity. These statements contain the essence and intent of U.S. laws and moral codes. Standards of integrity are considered important in business dealings on the individual, group, and corporate levels. To summarize, cost accounting allows organizations to determine a reliable and reasonable measurement of “costs” and “benefits.” These costs and benefits may relate to particular products, customers, divisions, or other objects. One of the big influences on current business practices is globalization. Most businesses participate in the global economy which encompasses the international trade of goods and services, movement of labour, and flows of capital and information. The world has essentially become smaller through improved technology and communication abilities as well as trade agreements that promote the international movement of goods and services among countries. Exhibit 1–4 provides the results of a survey of Fortune 1000 executives about the primary factors that encourage the globalization of business. Currently, the development of Web-based technology is dramatically affecting international business.

Leave a Reply

Your email address will not be published. Required fields are marked *