Question

how managerial accounting is affected by the implementation of balanced scorecard

Answer 1

The informal set of accounting required to be prepared for internal purpose, like serving for the management of the organization, is managerial accounting. Examples of such are sales budget, process costing, etc. There is no guideline or principle for preparing this kind of accounts.

Balanced scorecard, on the other hand, is the set of activities required for improving internal performances in order to get better external outcomes.

Affect: Both are interrelated. Managerial accounting becomes more important if there is balanced scorecard; it becomes mandatory to prepare, since the organization has to follow the balanced scorecard.

Example: Suppose the balanced scorecard has a point of “improving productivity”; this is to be achieved by the organization. [Productivity = Output / Input]. Therefore, managerial accounting becomes more important since it gives data about factory accounts which is relating to productivity. Productivity could be improved if material waste is the minimum. Managerial accounting gives idea how this waste could be minimized.