Consequences of Misallocation of Financial Resources on Cost Management: Evidence from Global Markets
DOI:
https://doi.org/10.53819/81018102t2018Abstract
Due to competitiveness in the global marker, firms must be strategic in order to survive. Therefore, setbacks arising from financial misallocation need to addressed by implementing systems that give the firm a competitive advantage and protects the firm position within the industry it operates. There is a need to transition from traditional methods of accounting to modern methods to ensure that financial misallocations are a thing of the past. By doing so, the firm will move from being reactive to being proactive as well as have access to accurate information that will facilitate strategizing and decision making. Financial misallocations have, therefore led to the demand for more sophisticated accounting techniques and methods. This has, in turn, made cost management a managerial process instead of an accounting activity. Furthermore, these systems have changed the role of the management accountant from reporting to a more involved stakeholder in strategy and decision making. This has led to the loss of various skills and competencies among accountants since some of their functions are now computerized. There is, however, a lot of apprehension in adopting these new sophisticated techniques of accounting, a subject that should perhaps be investigated further.
Keywords: Financial Resources, Cost Management & Global Markets.
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