Contigency theory, Managerial Accounting

CONTIGENCY THEORY

Some researchers have argued that the context in which budgetary control is used is as important as the style in which it is implemented and used. This is termed as the contingency theory. The contingency approach to management accounting is based on the assumption that there is no universally appropriate accounting system applicable to organizations in all circumstances. Rather contingency theory attempts to specific aspects of an accounting system that are associated with certain defined circumstances and demonstrate an appropriate matching.

Major factors recognized are:

Environmental factors like:

  • Its degree of predictability
  • The extent of competition faced in the market
  • The number of various product in the markets
  • The degree of hostility exhibited by competition

 

Organizational Structure Factor including:

  • Size of the organization
  • Interdependence of the parts or sub-units
  • The degree of decentralization
  • Availability of resources

 

Technological Factors such as:

  • The nature of the production process
  • The routineness or complexity of the production process
  • How well the relationship between inputs and outputs is understood
  • The amount of variety in each task that has to be performed
Posted Date: 12/7/2012 8:09:59 AM | Location : United States







Related Discussions:- Contigency theory, Assignment Help, Ask Question on Contigency theory, Get Answer, Expert's Help, Contigency theory Discussions

Write discussion on Contigency theory
Your posts are moderated
Related Questions
Customer oriented or perceived value pricing There is an increasing trend to price the product on the basis of the customer's perception of its value. This method takes into ac

disadvantages of transfer pricing

Suppose the spot price of gold is $1700 per ounce. The futures price for delivery in six months is $1712, while the futures price for delivery in one year is $1720. The interest ra

Explain the Features of budgetary control From the definition the following features of budgets control emerge: 1) Establishment of budgets: budgets are prepared for each

Compute the ‘fair' value of the two nearest to expiration futures contracts on the Hang - Seng Index (HSI) using HSI as the underlying asset Answer the following questions: a

Ask question Toll House makes chocolate chip cookies. The cookies pass through three production processes: mixing the cookie dough, baking, and packaging. Toll House uses process c

The assignment model Consider the situation of assigning m jobs (or workers) to n machines. A job i(= 1,2,3 ...m) when assigned to machine j(= 1,2,3 ...n)  acquires a cost Cij.

What are the Advantages or uses of break even charts Computation of break even point or presentation of cost volume and profit relationship by way of break even charts has the

How much to order Supposing the estimated annual usage of a component by Machinery Ltd is 20,000 units.  Usage is even throughout the year and only one order per annum is place

Management Accounting An accounting discipline concerned with the use of financial information. It used to relevant information by managers and other decision makers inside a s