Tailoring and customising financial performance reporting to suit the needs of different management teams and business units

Abstract

There is a school of thought that advances the proposition that "traditional" financial accounting measures are insufficient to track how a business is moving towards its strategic objectives. Traditional accounting does not link physical measures and profit. Nor does it identify the relationships between the business drivers, nor does it differentiate between leading and lagged indicators. New techniques, such as the balanced scorecard, active learning and benchmarking, are more powerful and forward looking. We cannot subscribe totally to the view that "traditional" accounting is dead, if only because legislation and stewardship require accounts to be produced. The newer techniques should supplement "management" accounts, not replace them. Before we can develop management accounts (accounting) further, current standards of "traditional" accounting presentation need to be addressed in order to get the basics right as a sound foundation