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Has The worry write up Information in Malaysia Losing Its Relevancy? Rosniza Binti Ramli Universiti Teknologi Mara, Malaysia. abstract Malaysia is one of the r adenosine monophosphate uping countries that affected by the globalization subprogram and emerging stinting environment passim the world. To be sustain in proximo, Malaysia governing body especially should trade and response effectively with the changes in sparing sector. But, has the circumspection history schooling flowerpot service of process the manager in making good purpose for their organization?Does circumspection ancestry relationship in Malaysia likewise evolve or changes due to an emerging economic environment? Research written document on Relevance Lost The read grow and Falls of Management score and Evolution of Management Accounting (IFAC, 1998) lead be discussed promote in this research in vow to give way better understanding near changes and evolution of direction report in Mal aysia. This research do by brush uping the former research, articles, thesis and ledgers. The changes and evolution has been found based on the reviewed of forward research.Introduction Research papers on Relevance Lost by Johnson and Kaplan found and gave us the picture of the rise and fall of solicitude story through with(predicate) appear the centuries. The authors explored about nineteenth- ampere-second apostrophize attention hang ons, efficiency, profit and scientific heed on 1880 to 1910 until focusingsing woolly-headed its relevance on 1980s. Furthermore they analysed and explored the unfermented global competition and refreshful systems for process sustain and product equal and also transaction standardment system for the future.In nineteeth- century, companies having a transformation process from 2 or more process into a single economic activity. In all cases, the information point on how to improve the process of managing the resources effectivel y and also do lay the sources of companies profit. In late nineteenth-century, rebirth embody system was emerged to systematic management where foc habitd on determination of correct information about efficiency of bleeders in mass-produced complex machine do. Taylor and Emerson devised new method of bill procedures to assess the efficiency of the proletariat and processes in complex machine-making slosheds.Futhermore, Churchs devices to manipulation product be in rules of order to determine how much profit of individual product contribute to the satisfyings overall profitability. But, G. P Norton aver on th standard monetary value information and comparing an integrated multiprocesstextile confederations performance with profit earned internally. After 1900, the integrated firms developed system to track the performance of the company and use one common denominator, return on investment that give attention to the amount of capital invested in the enterprise.Furtherm ore, after 1900, based on discussion on cost accountings lost relevance for cost management, the managers not compile right product costs information and affect their judgement on the costs and benefits of much(prenominal) information not lost sense of the relevant information to management decision. The blood costs information did not reflect the accurate guide to determine the product cost and in complex real-word setting, it also not relevant for actual management decisions.When multidivisional organization first appear well-nigh 1920, they use ROI (return on investment) targets to assess the performance of managers. On 1980s, the author claimed that contemporary management accounting systems were became out of date and affected the large organization. The information provided were not help in reflected the effective and efficiency of internal process. likewise that, the organization were became vulnerable to competiton and more foc utilize organization. In the nest chapte r, authors discussed the new global competiton of the 1980s.The revolution of economic condition were contributed by the Japanese manufacturing where develop the innovative practice in management accounting much(prenominal) as total quality management, just-in metre inventory system and computer integrated manufacturing system. Most of the firm more foc apply not on the reducing cost of product but on the unalike strategies to attract customer with special product and services. In other(a) word, competitive advantage that do organization more competitive than their rivals.They were more interested to create the value of the firms and how to create long term economic wealth. Since the early twentieth century, technology has taken disassemble and eliminated all manual operation and replaced with digital technology. Products buttocks be processed using machine for confineled manufacturing operations company. Furthermore, the new challenges to the firm is to develop the new com ing, tools and proficiency to design the effective cost accounting, management program line and performance measurement system.Other than that, the authors also discussed on process control and product cost systems. The objectives requires separate system for fiscal reporting, process control and product costing because individually systems charter different time frame for the activities, where process costing reported hourly, daily, weekly. Financial reporting system reported annually and quartelly and product cost information requires a longer time horizon. They also differ in terms of traceability and allocation, behaviour, set of relevant costs and audiences.In the last chapter, authors argued that existing sytems argon not posible to measure the performance of the firms. The short-term financial performance measurement has been undermined by changes in technology and world in the firms production operations. The measurement should be reflects the greater complexity of prod uct and process in the firm and consisten with the firms goal and objectives. Firm should also contract to determined the inadequacy of any single financial measure in order to summarie the economic performance of the firm during short periods.Research paper of Evolution of Management Accounting (IFAC, 1998) were discussed the evolution of management accounting by Financial and Management Accounting Committee (FMAC) of the International coalition of Accountants (IFAC). They claimed that management accounting has developed through four evolutionary stages under Western approach. First stage, prior to 1950 focus was on cost determination and financial control and the main source of data was from financial enunciatement. On that time, ratio and financial statement analysis were precise popular.The second stage, years of 1965, focus changed to the cookery of information for management decision-making, planning and control such as decision analysis and responsibility accounting. The techniques that attendant the decision analysis were Cost-volume profit, and marginal costing. By the year 1985 in the stage three, attention was foc utilise on the reduction or managed the waste in business resources, through the elimination of non-value added activities, use of mathematical decree such as Economic Order Quantity (EOQ), inventory evaluation such as FIFO, last in first out and multiple regressions.The fourth stage by 1995, focused had shifted to the generation or creation of value through the effective use of resources, through the use of technologies which examine the drivers of customer value, share restricter value and organizational innovation. The advance(a) management accounting methods that were popular such as Just-in-Time (JIT), Balanced Score Card, and Strategic management. IFAC (1998) had identified roughly of the developed countries had shifted to this stage between the years of 1985 to 1995.Japanese or Eastern perspective on the evolution of manage ment accounting also consists of four stages, namely Drifting, Traditional, Quantitative and Integrative Management Accounting. The drifting management accounting such as ratio analysis, conventionalistic such as budgetary control and standard costing, fleck quantitative such as mathematical formula and equation and integrative such as JIT, chump Costing and Kaizen. Literature review Based on the review of the prior study, there are more or less purposes to be review. First, the bothers with late US cost accounting and management control system and challenges and testimony to flog it.Second, changes in management accounting practices in Malaysia. Third, the rise and fall of activity based costing. Forth, the management accounting practice in selected Asiatic country. Fifth, the current state of mangement accounting practice in selected Malaysian companies. Problems, challenges and recommendation of modern US cost accounting and management control system The problems arose in the cost accounting and management accounting were, the business ran by the manager based on the financial performance or in numbers.Johnson and Kaplan addressed that the process of cost and management accouting have developed to the stage where senior executives cogitate they commode run their firms by the numbers (p 15). They were recommended that the firm should relates the human performance in organization both(prenominal) internally through management accounting and externally through financial accounting. They also suggested that Western approach to managing by the numbers, based in financial measure of control were became powerful of control in US and increasingly in UK business organization and remain acceptable in Japanese industry.Based on the prior research Mahmoud Ezzamel (1990), he and collegues criticts on the suggestion by Johnson and Kaplan and gave alternative ways of acounting for the problem with cost accounting. They do not agree with the precise history th at Johnson and Kaplan told, with the understanding of accounting and its power to which their history leads them. They told a history that basically good but went increasingly wrong. Mahmoud Ezzamel also argued that cost management based upon accounting has problem and bound to be problematic and that this is what the history of 19th century accounting such as how to construe true cost shows.From the historical development of cost management and cost accounting, Johnson and Kaplan derive a diagnosing of the causes of a modern disease. Changes in management accounting practices in Malaysia Malaysia has moved towards global competitivenesss, this changes makes manufacturing companies in Malaysia need to ensure their business operation and management cope with the current changes. ( Tuan Zainun, 2011). This prior study carried out to investigate how changes in Management accounting practice took place in Malaysia companies.Following Johnson and Kaplan (1987), MAP have been further dev eloped for better decision making and management control. Globalization has brought the new and advance(a)(a) technology and made a developing country open to greater competition (Kassim et al, 2003). This condition were affect the MAP in a business organization in order to fit the changes in the business operation. This study can be an evidence that the management accounting information change due to certain reason and made it relevance to be used by the companies. The rise and fall of activity based costing.Activity based costing tool can help the firm to determine the cost effectively based on the cost pool and cost driver. ABC is still the about appropriate cost system in management accounting. Many advantages of using ABC system in the firm such as ABC data is more accurate and reliable than tralatitiousistic costing. It also can be used for decision making and performance evaluation. Furthermore, Kaplan, Weiss and Desheh (1997) reported the successful consumeation of ABC transfer prices at Pharmaceutical Industries, which diminished the immortal disputes between the marketing and production departments.ABC also handles overhead costs and leads to a better understanding of the cost drivers that generate these cost. Besides that, ABC also worthy to implemented by the service organization sucha s government organization, insurance firms and banks. But, ABC also have the weaknesses such as ABC is based on subective arbitary cost allocations where ABC costing system more complicated and cannot predict profits and not competent for decision making. ABC also ignores constraints and not take an account a bottleneck. The cost of the various products are irrelevant for product mix decision.ABC regards the relation between activities and resource consumption as linear, absolute and certain, where in reality the cost is discontinue. Even though most of firms tried ABC ultimately decided to ravage it, they did seem to regard it favorably, based on galore( postnominal) case studies and articles (R. Cooper and R. S. Kaplan, 1991). ABC should emphasize the need to focus and cut down the cost of operational complexity. Management accounting practice in selected Asiatic country Prior study by Maliah Sulaiman observed the management accounting practices in Asian countries, Singapore, India, Malaysia and China.Authors claimed to be excellent in running the business and to be competitive in the global economic, firm should use the advance management techniques such as Just in Time, ABC, TQM and process re-engineering. Various authors have argued that traditional budgeting and cost volume profit analysis are no longer adequate to be used as planning andd control tools in the present manufacturing environment (Brownwich and Bhimani,1994). Many have predicted that traditional tools cannot cope with the changes of the shorter product life cycles, advanced manufacturing technologies and global competition.Its very important to determine the prac tices of management accounting in the real world because it can help the academician to have an accurate pictures for their teaching, if not, the accounting curriculum should be change to better reflect the needs of industry. Willett et al (1997) concern that studies on the management accounting practices in this region put behind bars behind studies in financial accounting. Choi and Mueller, 1992 cited that accounting is a product of it environment, means accounting is shaped by the environment, so different countries have different practice on mangement accounting.The current state of mangement accounting practice in selected Malaysian companies Prior study, Ghosh and Chan (1997) indicated that management accounting practice in Singapore, many of the firms already used various of management accounting techniques but not more used new technique such as the ABC and TQM system. Most of the local company were not competitive and lag behind the multinational companies. The study also indicated that Singapore companies not improve their management tools since 1997. they also avoided of used the advanced toos because they claimed that the implementation of the dvanced tools required complex process and additional resources needed. Then, Adelegan (2001) were studied on companies in Nigeria, where most of the companies only focused on process of cost determination and financial control uing budgets and cost accounting technologies. They has fully in the second stage and on the move to the third stage of evolution. Nishimura (2002) that conducted research on the Japanese affiliates in three Asian countries of Singapore, Malaysia and Thailand claimed that most of the companies in that countries had shifted from the traditional management accounting practices to the near stage of evolution.It was also found that some of the companies were move towards by using the advanced management accounting technique. There also research conducted in Malaysia that studied on the s mall and medium industry by Omar, Abdul Rahman and Zainal Abidin in year 2002. The research found that SMIs in the Klang Valley were still relying on the simple and not complicated management accounting practices such as budget and standard costing but they seemed to have acceptance of the advanced management accounting techniques and there was a positive trend towards the implementation of these new techniques in the future.Findings The result from the review of the articles, found that, Johnson and Kaplan rediscovery the management accounting system in the nineteenth century history is more about the practical business management not only the historical question. These study achievements were important to the international management accounting and civilization. But, in the 1980s, the management accounting has been developed. Then due to modern process of production technologies and global competition, the information was become irrelevant.They claimed that the cost accounting i s by-product of the financial accounting, so firms decided not to put forward Management accounting system separated from financial accounting system because of too expensive for them. Besides that, the irrelevance became worsen due to short-termism where the financial accounting only focuses on the short-term results, the control function, timing being too aggregated and unhelpful to organization. Then the academic accounting also failed to focus on the routine financial accounting consistently and the academic writing has lost touch with real world concerns.Furthermore, the major innovations in US firms lead to the failure of the MAS to provide managers with the information they need. The recommendations There are third recommendations by Johnson and Kaplan, first MAS should render more relevant time frames for the activities undertaken by the firm, where should have reporting cycle specific with the process control such as daily, weekly or hourly. In product costing, MAS should change the short term decisions in management accounting texts into longer time horizon to have better strategic decisions.Second, the allocation of the cost between product and process control should be different to be focused on flexible budgets. Then the cost allocation for the product should be trace in order for the firms to develop strategic decisions on the product development and discontinuance. Third, the future performance measurement should be based on long term measures, not forgotten the non-financial indicators to highlight the firms performance in many areas such as marketing and manufacturing.The changes of Management accounting practices in Asian country Furthermore, from the reviewed of the articles and journals, found that the Management Accounting practices have a significant change in traditional and advanced MAP in Malaysia manufacturing companies from 2003 to 2007. The changes might be because of changes in the business environment and the competition and adva nced technology used by the firms.This factor encourages the emergence of MAP in order to serves the organization with the accurate and reliable information to make a better decision in achieving the objectives of the organization. It also found that the manufacturing companies in Malaysia relied on the foreign multinational companies for export. This condition leads to sharing or transferring the advanced MAS to be gained by Malaysian manufacturing companies. Besides that, the result showed that the increased in the use of MAP in manufacturing companies in match with the advanced technology used in the manufacturing.The changes also shows that the management accounting in Malaysia recently have through the process of evolution and keep changes to cope with the business environment challenges. In the other hand, management accounting practices in Asians countries such as Singapore, India, Malaysia, and China the evidence reviewed suggest that there were not used the contemporary m anagement accounting tools as a whole. For example evidence in India, most of the company still uses traditional management accounting techniques (Joshi, 2001).They resistance to change to the new tools were because of the manager perception and culture that risk averse or not a risk taker. They also claimed that a lot of cost will incur in implementing the new tools in their organization. Same goes in Singapore where most of the companies used the traditional tools because they claimed that no reasons for them to change to the new tools. It also due to lack of expertise, knowledge and top management support to implement the new tools of management accounting.In Malaysia and China, most of the company there also still uses the traditional method and they claimed maybe they will change to new tools such as Balance score witticism and ABC in the next five years. Based on other articles, the current state of management accounting practice in Malaysia, there have seven techniques of ma nagement accounting that popular such as, budgets, income statement analysis, cash flow analysis, balance sheet and financial ratio analysis, cost and benefit analysis and finally the product costing.This is indicated that the stage one and stage two of management accounting still be practice by selected Malaysian companies. For the use of stage three and stage four among them are exceedingly low. But most of the selected companies in Malaysia have evolved into the third and fourth stage of management accounting evolution. (Rosmawati, 2004) In order to enhancing the management accounting practice in Malaysia, the professional body should have unit to implement and promotes the use of advance management accounting practices.Furthermore, academician and also practitioner, or business organization should work together and discuss further about the needs and roles of management accountant in order to develop new definition of the management accounting in the country. Its important to b uild a chat between the academician and practitioner because practitioner should informed the changes of the practices uses in organization to academician, so it will help in constructing the better curriculum for students that can reflects the real world practices.Other than that, proper planning should be constructing to originate the practitioner and also public by conducting the seminar in management accounting, so they will alert and elucidate with the evolution and new techniques in management accounting. Next, academician especially should be encouraged to write the articles, journal and research that reflects the evolution of the current management accounting practices. Then, it should be publicize in the magazines in order to spread the new information regarding the new management accounting practices to the business organization or public. The rise and fall of Activity based costingActivity based costing now still being used in most of the companies in the world, even t hough the system have problem because many organizations regard their cost systems for financial reporting, decision-making decentralization, price justification, control and performance measurement. But, ABC requires more efforts and skills without better results, so, the alternative are to hold to the traditional cost system. Prior case study, Y. Eden (2002) said it was disappointment with traditional cost accounting and lack of appropriate alternatives that prompted the initial enthusiasm for ABC.Managers also felt that the traditional cost accounting is not relevance, so they should do something to overcome it. Even though most firms that tried ABC decided to brush off it, they did seem to regard it favorably. However, the benefits to the firms not from the cost allocation data but from the ABC pilots involved original analysis of processes and costs and drew attention to neglected aspects of organizational activities. ABC systems just need to focus and to cut down the cost of operational complexity.But when manager realized these lessons, the complex data not make the improvements, so they used non-financial measurements. Conclusion From the reviewed, the management accounting practices and information in Malaysia will lost it relevancy if process of evolution did not take into action. Due to rapid changing in the global business environment, management accounting information should not lag behind it in order to stand in line with the advanced technology changes. With that, Malaysia should start to implement the advanced management accounting techniques in managing and control the business activities.Its important to help them use the resources effectively and to measure the performance efficiently. New advanced management accounting practice implementation will contribute significantly for creating the value and also to maintain the sustainability of the organization in the future. Management accountant also should play role and becoming a part of mana gement team in the organization. This is to make sure that the management accounting information will remain relevant in the new challenging business environment.Nishimura (2003), management accountant should work together with other practitioner such as engineer, marketing directors, designer and product directors so management accountant will understand more their work field and they will share opinion and recommendation with fulfill the various needs and goal from different departments and then come out will ultimate goal and objectives that can help the organization to achieve it successfully. Moreover, the suitable changes in their MAP especially in manufacturing companies should maintain intensity of the business activities.The advanced and traditional system should be used both to compliment and substitute for each other. When the traditional system can be useful and able to provide some information, the organization should adopt new advanced system to assist the more useful information to make decision. But when the traditional system fail to provide useful information, then it should be replaced with a more advanced system. This is very crucial to the management accounting and should be careful when making decision on what MAP that suitable for the condition of the business. If not it might be jeopardize the firms performance. References H.Thomas Johnson, Robert S. Kaplan. (1987), Relevance Lost The Rise and Fall of Management Accounting, Harvard Business School Press, Boston, Massachusetts. Rosmawati Mahfar, Normah Omar. (2004), The current state of Management Accounting practice in selected Malaysian Companies An empiric evidence, Universiti Tenaga Nasional, International Business Management Conference 2004. Mahmoud Ezzamel, Keith Hoskin and Richard Macve. (1990), Managing It All By numbers A review of Johnson & Kaplans Relevance Lost, Accounting and Business Research, Vol. 20, No. 78, pp. 153-166, 1990. Maliah Sulaiman, Nik Nazli Nik Ahmad and Norhayati Alwi. 2004), Management Accounting Practices in selected Asian countries A review of the literature, International Islamic University Malaysia, Kuala Lumpur. Tuan Zainun Tuanmat, Malom Smith. (2011), Changes in management accounting practices in Malaysia, Asian Review of Accounting, Vol. 19 Iss 3 ppp. 221 242. Nitza Geri, Boaz Ronen. (2005), Relevance lost the rise and fall of activity- based costing, Human System Management 24 (2005) 133-144 IOS Press. Martijin van der Steen. (2011), The emergence and change of management accounting routines, Accounting, Auditing & Accountability Journal Vol. 24 No. 4, 2011 pp. 502-547.