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Significance of management accounting in corporate governance

Author: GaoXinLing From: www.yourpaper.net Posted: 2009-12-01 13:07:52 Read:
Abstract: Modern accounting is a product of the commodity economy. With the establishment of further in-depth development of the reform and opening up and the socialist market economic system, China's accounting reform and economic reform must be carried out simultaneously, a major shift in the implementation of the accounting model, in order to promote the comprehensive development of the work and the continuous improvement of the level. By explore the role of management accounting in corporate governance, and tried to corporate governance and management accounting, there is a natural connection between the two areas combined to study the extraordinary significance of management accounting in corporate governance. In fact, management accounting and corporate governance are intrinsically linked, accounting and audit information disclosed corporate governance vital means plays a very important role in modern corporate governance plays a crucial for the development of the company important role.
Keywords: management accounting; corporate governance; Information Management
Certificate of accounting is based on currency as the main measure of continuous, systematic, comprehensive, integrated to reflect the capital movement control in the production process, aimed at improving economic efficiency, to provide accounting information based economic information systems and value management activity. It is based on the provision of accounting information based Economic Information System, a Value Management, Economics and Management activities. So, how the implementation of management accounting, corporate governance has the essential skills and means, but also to the new requirements of modern accounting, new mission.
, China Survey and Analysis of the accounting work.
Accounting work is an important foundation for economic management. Since the accounting law enacted in 1985, China's accounting work to play a positive role to promote the accounting process of modernization in China. However, with the development of the socialist market economy, accounting work there have been many new situations and new problems, and a lot of new and higher requirements on accounting. Accounting requirements introduced in 1999 the situation accurately reflect the economic activity in the accounting, to provide true and reliable accounting information for economic management and decision-making. However, in the case of the supervision mechanism is not yet perfect, the accounting work there are still some problems, which also proposed a new management accounting proposition for the company managers.
The 1 line management weakening. Laws and institutions out of the line on the block, that is, the introduction of the Act can not be said less forward to publishing books and learned scholars Tingduo installment of "job" teacher. Internal supervision departments subject to business leaders, external supervision departments take orders from the local government block strong line weak.
Flexible enforcement inspection. Vary the degree of law enforcement, the environment, the relationship between the various factors. For example, intends to found an enterprise of tax evasion X million check processing results: In view of the good attitude of the inspected units, taking into account the practical difficulties of enterprises, eliminating the need for a fine and pay less,.
3. Practicing poorly protected. The accounting profession implementation of certificates for many years, but there are still some undocumented non-academic staff occupied positions, some people tend to Financial policies and the lack of accounting knowledge, and the impact of accounting knowledge, seriousness, affecting the quality of accounting work .
The accounting results propaganda deviation. The task of accounting work, not only to law-abiding and enrichment, but also to be responsible for the internal and external. Now in the direction of public opinion, but light weight effective law enforcement. Introducing advanced deeds of the corporate financial officers, enterprise management, improve economic efficiency reports abound, and in the maintenance of law and order, to withstand pressure, accurately reflect the facts reported is meager, accountants, if the initiative has exposed the problems criticism and exclusion, not only internally by the even more tragic is the external also lack the required support and protection.
Second, the need of management accounting in corporate governance
The natural management accounting information and corporate governance, accounting and audit information disclosed corporate governance vital means. Will continue to play an important role in modern corporate governance, management accounting. Services in corporate governance has become a fundamental need, innovative management accounting, management accounting will play an increasingly important role in the efficient operation to improve the corporate governance structure and maintaining the governance structure. An adaptation corporate governance arrangements management accounting innovation system is a normal, healthy development of the catalyst of the modern enterprise system. Specifically, the necessity of management accounting in corporate governance has four points:
1. Contribute to the enhancement of the effectiveness of the Board and to stakeholders to fulfill responsibilities. Corporate governance practices, the Board members must become actively participant and major decision-makers in promoting the overall success of the company, and such participation to a large extent dependent on the effective management accounting information. The enterprise contract concluded by all stakeholders, safeguards all stakeholders should have the right to maintain the good relationship of the enterprise with stakeholders, the same need to establish reliable and rich on the basis of management accounting information, from not reliable, support of management accounting information.
Contribute to the performance evaluation of the Board and the Board of Supervisors. The performance evaluation of the board of directors and board of supervisors is to assess the validity of their own activities, not as a point of departure, the company's operating results and financial position to assess the information provided by management accounting. 3 help curb Management corruption. Although effective accounting and auditing systems to curb administrative corruption, the role of the degree of corporate governance mode, but this effect can not be replaced by other instruments of governance.
Help improve the incentives of the CEO and executive director. Match how the remuneration of the CEO and executive director with the company's performance in order to achieve the best incentive effect, is the subject of much attention in the corporate system. Generally believed that the senior management of short-term incentives based long-term incentives based on the market value of accounting earnings. Therefore, the measurement of accounting earnings is also one of the core foundation of incentive mechanisms.
Third, the significance of management accounting in corporate governance
Traditional management accounting companies manage the process of operating decisions, investment decisions, the overall budget, cost control, and responsibility to control exert influence, not related to corporate governance issues. And Corporate Governance adapt traditional management accounting has been given a new content. In traditional management accounting management services for the company, the goal of management accounting is necessary to provide useful information for decision-making, while at the same time reflect the completion of fiduciary duties. In my opinion, the ultimate goal of management accounting is to improve the competitiveness and profitability of the enterprise. Adapt corporate governance, management accounting, the goal is "to achieve the multiple purposes of the corporate governance and corporate management to provide non-mandatory information.
1 to the highest leaders of the company to provide non-mandatory information. In corporate governance, a particular concern of the three aspects: First, the future forecast information. With respect to financial and accounting reports to reflect the situation of the enterprises in the past financial position, operating results and cash flow, future projections of economic decision-making information on stakeholders. The two non-financial information. Non-financial information to help understanding and evaluation of the deep level of the enterprise, and also help to predict the future of the enterprise. Of information users and non-financial information in a way to have a greater value than the financial information. Social responsibility information. Including the implementation of all aspects of the creditors, employees, consumers, suppliers, government, community and public responsibility, the need for appropriate disclosure.
Auxiliary and the audit management decisions. While this is the traditional functions of management accounting to reflect the needs of the development of corporate strategy and the best use of economic resources in the long-term business requirements, but from a new understanding.
Services in the internal control, fast and accurate transmission of information and feedback mechanisms. Here said the internal control consists of two levels, First, to adapt to the needs of the corporate governance, executive director and CEO of the control; Second, as an important form of corporate management control of the day-to-day operations of the company, CEO.
Provide information support for business innovation and organizational systems innovation. Today, accounting has become an indispensable part of modern corporate governance structure, internal and external stakeholders to understand and monitor enterprise management activities, and then make the relevant decisions only on the basis of accounting information. Management accounting should provide some information for business innovation, innovative business decisions for their information. In addition, modern management accounting system for enterprise organizations should provide information support to a certain extent.
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