Titlebook: Management Accounting; Review of Contempora Robert W. Scapens Textbook 1985Latest edition Macmillan Publishers Limited 1985 accounting.deve

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Introductionarch. Currently, the management accounting textbooks written by academics describe a coherent set of concepts and techniques which are available to management accountants in practice. Unfortunately, in a number of respects, the practical nature of the subject differs quite considerably from these te

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The Conventional Wisdomnal wisdom of management accounting was equated with the contents of current textbooks. In this chapter an overview of the conventional wisdom will be provided and its underlying assumptions explored. It will be argued that there is a measure of agreement amongst textbook writers as to what comprise

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Cost—Volume— Profit Analysisonventional wisdom, relies on the specification of a decision model. At the end of Chapter 2 it was concluded that economics played a central role in structuring the decision models used by management accounting researchers in that decade. The decision maker was assumed to have available, at no cost

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Variance Investigation Modelsdecision theory had an important impact was in the investigation of variances. All business planning, whether in the form of budgets or standards, are based on estimates of prices, volumes, costs, etc. and any outcome can only be expected to approximate these estimates. Outcomes will not necessarily

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Value of Information costs. Although researchers attempted to relax many of the assumptions which were made, either implicitly or explicitly, in developing the models that formed the basis of management accounting’s conventional wisdom, the assumption of costless information remained intact for some time. In seeking to

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Information Economicsd to provide a formal structure for the analysis of such a problem. Information economics was developed in the late 1960s and early 1970s, notably by Marschak and Radner (1972). This work was firmly grounded in the statistical decision theory which was being used by accounting researchers to introdu

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Simplified Models and Empirical Studiesan be questioned because of the difficulties and costs associated with their implementation. For instance, the necessary information may not be available within the constraints imposed by current information technology and the ability of existing management. Furthermore, even if such information cou

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