Balanced Scorecard vs Standard Costing

Cheporov Valeriy^1,

¹Economic Faculty, V.I. Vernadsky Crimean Federal University, Simferopol, Republic Of Crimea

Cite this paper:
Cheporov Valeriy. Balanced Scorecard vs Standard Costing. American Journal of Information Systems. 2015; 3(2):31-36. doi: 10.12691/ajis-3-2-1

Abstract

A management control system (MCS) is a system which gathers and uses information to evaluate the performance of different organizational resources like human, physical, financial and also the organization as a whole in light of the organizational strategies pursued. The development of strategy maps and Balanced Scorecards has transformed the foundation of management control systems. Costs of managerial control system can be significantly reduced when found common framework for its various instruments. The aim of paper is to establish communication between the Balanced Scorecard and Standard costing as an instrument of management information systems. It is proposed to use a variance analysis for the changes in the financial position as the metrics for perspectives of Balanced Scorecard. The possibility of using accounting balance equation and double entry for the perspectives of Balanced Scorecard also shown.

Keywords:
balanced scorecard standard costing strategic variance analysis changes in financial position

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

References:

[1]	Cokins, G., Căpuşneanu, S., “Sustaining an Effective ABC/ABM System,” Theoretical and Applied Economics, XVIII 2 (555). 47-58. 2011.
[2]	Haug, A., Zachariassen, F., & van Liempd, D. “The costs of poor data quality,” Journal of industrial engineering and management, 4(2). 168-193. 2011.
[3]	Johnson, H.T and Kaplan, R.S., Relevance lost: The rise and fall of management accounting. Harvard Business School Press, Boston, MA, 1987.
[4]	Kaplan, R., and Norton, D., “Using the Balanced Scorecard as a Strategic Management System,” Harvard Business Review, 75-85 Jan.–Feb.1996.
[5]	Kaplan, R. S. and Anderson, S. R., Time-driven activity-based costing: a simpler and more powerful path to higher profits, Harvard Business School Press, Boston, MA, 2007.
[6]	“Management accounting tools for today and tomorrow” Available: http://www.cimaglobal.com/Thought-leadership/Newsletters/Insight-e-magazine/Insight-2010/Insight-January-2010/Major-survey-benchmarks-management-accounting-tools/.. [Accessed Aug. 27, 2013].
[7]	Mudde, P. A., & Sopariwala, P. R., “Examining southwest airlines’ strategic execution – A strategic variance analysis,” Management Accounting Quarterly. 20-32. Summer. 2008.
[8]	Mutze, A. & van Ierland, D. “Time Driven ABC: nieuw in Nederland?,” Available: http://www.nl.atosconsulting.com/NR/rdonlyres/A2664E2D-727C-4B96-A362-72F0AA57AE4D/0/4447CM5_6_timedrivenabc.pdf. [Accessed Jun. 01, 2012].
[9]	Rigby, D., & Bilodeau, B., “Management Tools and Trends 2007” Available: http://www.bain.com.ua/bainweb/PDFs/cms/Marketing/Management%20Tools%202007%20BB.pdf. [Accessed Aug. 27, 2013].
[10]	Shank, J.K. and Gonindarajan, V., Strategic cost management: the new tool for competitive advantage, New York: Free Press. 1993.
[11]	Sharaf-Addin, H. H., Omar, N., & Sulaiman, S., “Target Costing Evolution: A Review of the Literature from IFAC’s (1998) Perspective Model,” Asian Social Science; 10 (9). 82-99. 2014.
[12]	Souissi, M., “A Comparative Analysis Between The Balanced Scorecard And The French Tableau de Bord,” International Business & Economics Research Journal, 7 (7). 83-86. Jul. 2008.