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Managerial Accounting and the Role of Experiments - Essay Example

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This enables employees to achieve different business goals and objectives. Managerial accountings systems are supposed to provide information that enable individuals to align their interests by directing employee effort and attention to activities that help an organization. It is necessary to study effectively of how the roles of managerial accounting information affecting the behavior of individuals who form the organizations. Organizations make judgments and decisions that focus on the amount of information given to employees. In spite of perfectly rationalized assumptions that govern models of economic behaviors, it has been noted that the judgments and decision of producers and users are not effective. Research in managerial accounting is essential to help evaluate the quality of the judgment within any organization. This research provides useful insights in the benefit ad cost of managerial accounting practices that support decision making within the organization. An organizations managerial accounting system is a factor utilized to motivate employees. Research managerial accounting helps to determine the extent which the practices motivate individuals in organizations and helps them mitigate their differences in interest. Research managerial accounting helps individuals to determine the extent of social motives, and they have a chance of embarking on actions that have the best of interest of the firm. It has been determined that the utility of effectively designed experiments is effective for the study of cause-effect relationship under irregular conditions. They manage threats that have valid inferences and this enables researchers to come up with conclusions concerning both the independent and dependent variables of interests. Decision-Influencing Role of Managerial Accounting Information The decision-influencing managerial accounting role refers to the use of information with an aim of motivating employees. The role of managerial accounting is viewed as the minimization of post decisions and it entails of scorekeeping information. The utility of managerial accounting information for decision influencing purposes influences the behavior of employees. This usually occurs through a close monitoring, evaluation and rewarding of competent actions and performance. For example to motivate employees on control costs, organizations tend to link their compensation to performance. They provide financial incentives that are utilized to achieve an actual cost that is less compared than their budget costs. Organizations can also use allocation method to motivate mutual monitoring and cooperation among the employees. The use of managerial accounting and information aim at solving organization control problems and ensures that employees exhibit desirable organization behaviors. Control issues are common among organizations because owners focus on maximizing their individual utility, which is portrayed in theoretical arguments of wealth and effort. Employees are therefore, assumed to possess diverse goals from owners, and this results to diverted interests between the self-interested and cooperative agencies. When they are structured effectively, incentives are absent thus becoming an agency predicament that results to minimal efficiency and a decline of the firm’s value. There are various levels of agency challenges and they include hidden action and hidden information. A moral hazard predicament develops when the owners fail to concentrate on their employee’s actions and fail to evaluate their performances. At this level, they rank their compensation contracts on imperfect surrogate behaviors. An adverse selection problem develops ...Show more


The purpose of managerial accounting is aimed at enhancing the firm values through effective utility of scarce resourcesThis enables employees to achieve different business goals and objectives…
Author : athena53
Managerial Accounting and the Role of Experiments
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