Cost Accounting Notes Essay

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Cost Accounting Part 1 Notes Cost accounting for tough (modern) times… Cost accounting systems provide information (both financial and non-financial) that can help decision-makers in companies (and NGOs and institutions) to achieve the objectives of their organization and enhance its performance. Most companies today aim primarily to maximize their profits. However, this objective is increasingly problematic for a variety of reasons related to the global financial crisis and its aftermath, ‘modern times’ that many analysts compare to the economic recession of the 1930s, which followed the Wall Street crash and Charlie Chaplin depicted in the film ‘Modern Times’. Challenges facing contemporary firms include the following: - Weak consumer confidence (salaries not matching inflation) and buying power - High inflation - Low employee morale/ motivation (conflicts of interests between employees and owners) - Public criticism and distrust - Environmental crises - Poor credit availability - ‘Capital kings’: little investment, companies buying back stock/shares - Lack of understanding of the root causes of current crises and recessions These are major systemic problems (i.e. attached to capitalism our current socio-economic system) that cost accounting cannot solve. However, throughout this course we will gain a better understanding of these and other problems and challenges facing organizations, and how decision-makers (like you) can make use of accounting to respond to them in effective, innovative ways. …and the importance of theory This course emphasizes theory to enable you to understand today’s corporations, their limits and their possibilities. So that you are not just ‘number crunchers’, but actors who can develop new interpretations and respond to ever changing economic, social, and political

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