Question

“Changing a cost accounting system is likely to meet with little resistance in an organization since it is a technical matter of little interest to individuals outside of the accounting department.” Do you agree? Why or why not?

Answer 1

No, I do not agree with the statement that Changing a cost accounting system is likely to meet with little resistance in an organization since it is a technical matter of little interest to individuals outside of the accounting department.

various stakeholders have long resistance to Changing a cost accounting system. It can be explained by the following arguments-

1. Suppliers of money like banks and other financial institutions have much more interest in cost-related information as they have to emphasize over cost, volume, and profit which are benchmarks for cash flows in the organization.

2. Suppliers of materials and manpower also have a good interest in cost-related information as they have to focus overconsumption of materials, and manpower they supply to the organization which may be affected by Changing a cost accounting system. According to use and demand they can plan for proper supply and Often, utilize opportunities.

3. Normally as a consumer of a product, we have to be careful about the cost of the product as we have to pay accordingly. Each organization thinks that cost saving should be achieved without sacrificing the quality of output. This is the reason why many organizations feel that Changing a cost accounting system is likely to make a bad influence.

On the basis of the above facts, we can say that external stakeholders also have enough resistance while changing a cost accounting system. However many things depend upon the conditions, product, or service whatever is being supplied and impact in the form of deviation when a new cost accounting system is introduced.

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