What are the problems in the application of management accounting in China

Management accounting has been introduced into China from the West for two or three decades, but its practical application is not very satisfactory. In general, it seems that the practical application of management accounting largely exists in the following major problems.

1. Lack of a set of rigorous and effective theory

Since the 1970s, various related sciences, such as behavioral science, agency theory, information economics and other research results have been introduced into managerial accounting, broadening the field of managerial accounting, and amending some unreasonable assumptions of managerial accounting. However, the introduction of related sciences is not comprehensive and systematic, and it only modifies some assumptions of management accounting individually. Many of them are only in the stage of qualitative analysis and lack practical application value. In practice, decision makers are often unable to accurately measure the cost and value of information, and thus are unable to conduct cost-benefit analysis of information.

2. The use of management accounting methods in practice has greater limitations

Because the theory of traditional management accounting is based on a specific economic environment and established, it determines the quantitative models and assumptions in the changing reality of economic life, there are many can not be established, it is difficult to use these theories and models to solve practical problems. For example, investment decision-making analysis in the calculation of the time value of money, all the textbooks are used in western countries to calculate the compound interest system of interest, while our country is generally applied to calculate the interest of simple interest system. This theory is seriously detached from the practical approach affects its practical application, so that there is a "long-term investment management decision-making and long-term investment sensitivity analysis of almost no enterprise in practice to be applied". In addition, the pursuit of esoteric theories and mathematical models, some of the originally simple methods to be complicated, so that it is not easy to grasp, poor operability.

3. Lack of attention and systematic application of management accounting in practice

China since the late 1970s from the West to introduce management accounting knowledge system has been nearly three decades of history, but regrettably, in recent years, China and foreign and Hong Kong and Taiwan accounting scholars to do the results of various surveys show that so far, management accounting in our country's enterprises have not yet been widely emphasized and systematic application. systematic application. At present, the application of management accounting is mainly in the coastal areas and foreign-funded enterprises, while there is very little application in the west and the hinterland. This is mainly because the grassroots education of management accounting is lagging behind, the popularization rate is low, and many enterprise leaders do not understand management accounting at all and do not have a clear understanding of the economic benefits it can produce. The low quality of accounting personnel is the key to constrain the popularization and application of management accounting, and the lagging development of management accounting application software in China is an important factor that restricts its promotion.

4. Management accounting application experience needs to be systematically summarized and improved

Management accounting has now become a mandatory course for accounting majors in many institutions of higher learning, and the research on management accounting in China's academic community has also had a certain depth. From a practical point of view, some of China's enterprises have carried out some of the successful experience of management accounting, such as the 1970s Daqing Oilfield to carry out the internal settlement, the 80s in Jilin Province to carry out the plant bank, the 90s, Handan Iron and Steel Group Company Limited to implement the "simulation of the market accounting, the implementation of the cost of vetoing the" Handan Iron and Steel experience. However, it is regrettable that China's accounting profession has some typical cases of success in the practice of the obvious lack of systematic research and summarization, so far only a small number of cases have been systematically studied and summarized. The lack of exemplary or exemplary typical case studies is an important reason why management accounting has not been effectively popularized and promoted in China's enterprises.

5. Lack of professional management accountant team

In China's enterprises, the tasks and functions of management accounting are basically assumed by the finance department and cost accounting department, with no specialized agencies and professionals to undertake their tasks and perform their duties, no professional team of management accountants, and no technical qualification examination of this kind in the country. As enterprises focus and focus on the accounting cycle, only consider whether the accounting practice is in line with accounting practices, without considering whether it is conducive to the realization of the strategic objectives of the enterprise, resulting in the development of management accounting and financial accounting is not balanced, thus restricting its promotion and application.