June 2009
Intermediate to advanced
248 pages
5h 51m
English
Content preview from Making the Numbers Count, 2nd Edition
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2 Shortcomings of Traditional Accounting Methods*
Professors Kaplan and Johnson, authors of the influential book Relevance Lost: The Rise and Fall of Management Accounting, have stated that cost accounting is the number one enemy of productivity (Kaplan and Johnson 1987). Strong words. There are three principal shortcomings of traditional accounting systems:
- They are irrelevant and harmful to a business.
- They are expensive to maintain.
- They divert the accountant’s attention from more important matters.
The average accountant in an American manufacturing company spends up to 75% of his or her time on bookkeeping activities and less than 10% on analysis and process improvement. The job has been reduced to a backward-looking, reactive recording ...
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