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Report - Management Accounting Practice & Implement in Bangladesh

Report - Management Accounting Practice & Implement in Bangladesh

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Published by: jamilrajib on Apr 04, 2011
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12/15/2013

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A
 
BSTRACT
 
The more the development of the market economy, the more the significance of managementaccounting. To keep pace with this increasing market economy, it becomes imperative for theorganizations to adopt new management accounting tools and techniques. It is also importantfor the Bangladeshi organizations. This paper seeks to obtain an overview of the managementaccounting practices in the listed manufacturing companies of Bangladesh. Data has beengathered by a questionnaire survey from eight manufacturing sectors. The analysis hasrevealed that though there is difference in extent of practices among the sectors, all sectorsfail to practice some newly developed techniques. If this trend continues, Bangladeshiorganizations will lag behind in the race of global competitiveness and comparativeadvantages. It is therefore, some policy recommendation has been made to improve andfasten the management accounting practices.This thesis attempts to examine the status of use of management accounting techniques practice in Bangladesh. A list of traditional and modern management accounting tools wasidentified and the extent of their use was evaluated. It is discovered that modern techniqueslike Activity-Based Costing, Target Costing, Just-in-Time, Total Quality Management,Process Reengineering and The Theory of Constraints, are not used in public and privatesector manufacturing enterprises but a few Multinational Corporations, are using some of techniques like JIT and TQM. However, traditional techniques like Financial StatementAnalysis, Standard Costing, and Cash Flow Analysis are found widely used followed by CVPAnalysis, Marginal Costing, and Fund Flow Analysis etc. Respondents enterprises use themanagement accounting techniques in Bangladesh is either moderate (30%) or unsatisfactory(45%). 15% of the respondents consider it satisfactory and another 15% consider it not at allsatisfactory. All respondents consider the use of management accounting techniques isnecessary but pointed out a number of reasons of its limited use such as lack of awareness bytop management, more emphasis on financial information, involvement of extra cost etc.However, they suggested some measures to improve the situation like taking measures tocreate awareness among top management, organizing seminar, symposium, ensuring trained personnel etc. In the current global competitive market enterprises must be cost and qualityconscious where the role of management accounting cannot be over emphasized. Thus theextent of use of management accounting techniques specially the new ones be emphasizedand all concerned authorities need to give attention to this matter. This thesis seeks to obtainan overview of the management accounting practices in the companies of Bangladesh. Datahas been gathered by a questionnaire survey from eight sectors. The analysis has revealedthat though there is difference in extent of practices among the sectors, all sectors fail to practice some newly developed techniques. If this trend continues, Bangladeshi organizationswill lag behind in the race of global competitiveness and comparative advantages. It istherefore, some policy recommendation has been made to improve and fasten themanagement accounting practices.This thesis explains the use of target costing as a strategic profit planning and costmanagement tool. This will identify its key principles, contrast it with traditional costmanagement tools, show the critical steps in the process, and demonstrate its functioning in practice.1
 
CHAPTER 1:
INTRODUCTION
ORIGIN OF THE REPORT
This report has been prepared to make a study on the
“An overview of the management accounting practices in the listed manufacturing companies of Bangladesh’’.
as a part of the fulfillment of thesis program required for the completion of the BBA program of theAccounting Faculty of Business Administration of Stamford University Bangladesh.The report was prepared under the supervision of 
Mahmuda Nasrin, lecturer of BusinessAdministration
, Stamford University Bangladesh. I am very much thankful to him for assigning me such types of project work.
BACKGROUND OF THE REPORT
Globalization or Free market economy is now world’s major challenge to every businessindustry. Recent business world as well as Bangladesh faces highly economic recession, withthis situation the present economy of Bangladesh demands immediate development of  business technique, tools and proper decision making policy. This report has been prepared inthe light of emerging management accounting technique
“An overview of the management accounting practices in the listed manufacturing companies of Bangladesh’’.
 
as a part of the fulfillment of thesis program required for the completion of the BBA program Major inAccounting under the Faculty of Business Administration of Stamford UniversityBangladesh.This thesis report is a mandatory requirement of my BBA program, and prepared bysupervision of thesis supervisor. The report was prepared under the supervision of 
MahmudaNasrin, lecturer of Business Administration
, Faculty of Business Administration, StamfordUniversity Bangladesh. The thesis supervisor authorized me to submit the report of 
“Anoverview of the management accounting practices in the listed manufacturing companiesof Bangladesh’’ 
PURPOSE OF THE STUDY:
The purpose of the study is to make an analysis of Financial Statements of The companies interms of the Paints Industry. This study attempted to understand the financial conditions of The companies on different segments such as liquidity, profitability & solvency. The purposeis also to make recommendations for improving the financial stability and soundness of different services provided to the shareholders of BPBL. It is also the purpose of theresearcher to help the management by providing an idea to take appropriate decisions aboutthe quality of the investing & financing in future.
OBJECTIVES OF THE REPORT
The main objectives of the study are to see whether the business enterprises in Bangladeshare using management accounting technique in order to assist the managers with information2
 
relevant to decision making and day-to-day operational activities and the extent or degree of such use.In broader sense the objectives to be covered under the study are:
To find out the using status of Management Accounting Techniques;
To evaluate the conception of managers as to importance of use and problems, if any,they face in using the techniques;
To identify the Management Accounting information structure; and
To highlight suggestive measures to the users of management accounting informationfor its extensive use.
SCOPE OF THE REPORT
The scope of this study was strictly confined to the annual report & personal contact with theemployees of Bangladeshis companies. To collect the information I worked in the financesection & cost & budget section of those companies. All other data related to the financialanalysis was collected from web sites of those companies & other related co.Investigative study method is used in writing this report. This study method was significantfor me because before this study I have not enough understanding to proceed with such typeof research project also on this topic.This study is characterized by flexibility and resourcefulness with respect to the methods,formal research method employed by investigating various business industries in Bangladeshand obtaining information by asking question to qualified personnel.The study involves structured questionnaire, large sample and probability sampling plans.Under the study once a new idea or insight is discovered, they may shift their exploration inthat direction. Observation method is used to complete this qualitative research.Finally the purpose of this study is to determine whether management accounting techniqueis used by the Bangladeshi manufacturing companies and whether those companies using thetechnique apply the application process in their customer expectation, profit margin, cost and price determination, cost reduction and management operations.
METHODOLOGY
For smooth and accurate study every one have to follow some rules & regulation. The studyimpute were collected from two sources:3

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