Institute of Management Sciences

BZ University, Multan

Managerial Accounting

Roll No MBE-15-21

Name Hassan Mehdi

Program MBA 3.5 (eve)

Total word count: Part-1587

Introduction
In this essay, I am going to discuss or comment on the Miller’s statement
(accounting as social and institutional practice). I’ll support this statement with the references of
different articles. In this report, I’ll discuss the role of management accounting and elaborate that
how accounting as a social and institutional practice. I’ll discuss the important role of accounting
in decision making of the organization. And I’ll also discuss that how accounting helpful for
calculating the budget and control system of the organization as well as the cultural context of the
organization. I’ll discuss that how accounting infrastructure helpful for the organization through,
the check the public expenditure that how organization take the detection or corruption through
the analysis of public expenditure. I will also discuss how accounting play a role in economy to
calculate the different cost of activities. I’ll also elaborate that, if the accountant has the reliable
and accurate records of information, then how It’ll helpful for the organization for the
accountability. Now I will discuss in detail all these aspects of accounting.

Explanation
Accounting played a wide role in organization (profit or nonprofit). Accounting is
helpful in a strategic data analysis, Capital budgeting, management control system, balance score
card and strategic coordination. Accounting influence the decision making and defined the all
those role through this organization achieve their goals. Traditionally accounting focused on
maximizing the shareholders’ value and while the management accounting focus on employees
and communicate with them in a neutral environment.

Role of Accounting
All the managers using the accounting system in a routine based financial and
measure the flexibility and performance of both financial and non-financial (Miller & O, leary
1993). Accounting also plays an important role to calculate the budget and control system of
organization theoretical as well as empirical. In this accounting play a major role to explore the
relationship between the control budgeting and accounting system of the organization in
empirically as well as theoretically. In which we first examine the role of budgeting of total control
system of the organization in theoretical aspects. After a theoretical aspect we examine the role of
budgeting in empirically. Accounting is a component of measurement system and total control
system, budgeting of the organization is considered as a planning system of the organization and
also known as a measurement system. The control system of the organization depends upon the
culture.
Accounting is not a calculation but it is also helpful for the organization in the decision
maligning process, in economics as well as other different areas of the organization. In which
economics accounting help the economist to calculate the cost or total budget of any activity or
project. Managers take a valuable decision with the help of the information that is provided by the
accountant with the help of accounting. Accounting also play a important role in the accountability
of the control and the management system of public fund,
All the organizations make a good infrastructure and with the help of this infrastructure the
accountability of the public expenditure that organizations want to calculate can be easily
calculated if organizations have a sound accounting infrastructure followed by the organizations.
Organizations set a certain standard and with the help of this standards check the accountability
disciplines. Different persons see the accountability in different perspective like as auditors check
the financial and numeric matters and accountant see as an according to accounting standards.
Accounting also maintain the framework of accountability and accounting provides the
information to the accountant and auditors. Accountants provides the information to the auditors
through the financial (kimbro 2002 ) statements and then auditors monitor all the information and
check the accuracy of the information and with the help of this, auditor detect the level of
corruption in the financial statements. Infrastructure of the accounting is related with the level of
accountability. If the information system is weak then the management accounting system is weak
for that organization. For example, if any entity want to borrow the loan from World Bank then
firstly World Bank check the accounting system of that country, either their accounting.
Infrastructure is reliable or not. if yes, then they go for it otherwise they can lend the money in
their own conditions. The frame work of indirectly effect the public expenditure of the
management and with the help of this accounting practices organization execute their budgets.
Accountability is link with the information and source of information is accounting means
accounting records that accountant have. accountability can only be successful as well as effective
if the accountant has the accounting information record maintain reliably and honestly. if the
information is record accurately than it is easily assailable and if the records of accounting is not
accurate or reliable then it cannot be accessible.

Accounting as a social and institutional practice

Accounting also plays a role as an institutional framework or practice. Institutional
gradually through process of routine human activity. In nonprofit organization management
accounting perform as a back bone of the organization because in NPO good management control
include, personals assignment of responsibility, work distribution among employees. They manage
their work in pure management techniques, that enhance the efficiency of NPO. In NPO’s control
system any action that increase the probability that people will behave in favor of organization.
Some interpretivist view the organizational as a cultural context, so if the management accounting
is cultural then in which the cultural have involve the public and due to involvement of the public
which is mean by that management accounting is not apart from the social practice as well as the
cultural aspects. So, this shows that management accounting implicated social as well as cultural
actions. Management accounting is a practice that generate the organizational culture. Different
organizations are re constructing their culture with the help of the practice of management
accounting. Accounting as an institutional practice and accounting was observed on way that the
organization come to incorporate sensible ideas of the organizing. Accounting play a major role
of a institutionalization procedure of latest societies. Accounting is used to gather the many
technique for monitoring as well as organizing the activities.
 Accounting also provide the vocabulary that helpful for the organization to achieve
their goals and policies as well as procedures of the organizations. Organization find the activity
of the individual with the help of the usage of vocabulary (Meyer & rowan (1977; 31)
Accounting as a social and institutional practice according to the peter miller accounting
is related in so many areas of the social life and also the economic life. Accounting practice also
used to define the profit and loss of various parties. There are three different aspects of the
accounting which shows the accounting as social and institutional practice. first accounting a
technology and second is the rational can be used as an aspect of accounting as a social and
institutional practice. Third, is a constituted and re constituted of economic domain and calculative
that provide the knowledge about all of this some agents calculate the economic policy and those
agents are located ever institutionally and those argue that the study of the accounting as a specific
economic calculation that is located as institutional practice. Accounting practices addressed and
prevailed organizational matrix through which they can be operate. (Thomson, 1986.9).
In those years, social accounting is more advanced because it is the mechanism of the
evolution of the social accounting that is developed by the humanistic view in a humanistic view
that place with the theory of shareholder and then report to the public. In which past accounting
debate just only one perspective and in which modern accounting system accounting argue on the
objective base question. Today accounting change the behavior of the people or managers due to
this change also change the decision-making style of the managers as well as different people.
Accounting in a social context where it has the certain national or local cultural setting it us the
knowledge of the entrepreneurial enterprise. Accounting is a knowledge that we thought, write, or
spoke in our educational system that can change the ideology and decision making authority in a
professional way. Accounting is also important for any business man because it is helpful for the
businessman to maintain their records. That what is the cost and what we get from this business.
Accounting have a huge impact of society as well as the economy. Accounting is used to calculate
the resources and capital of the market. This show that accounting take a vital role in our business
and daily lives.

Conclusion
I agree with Miller’s statement (accounting as social and institutional practice) because
management accounting is used in organization’s managers use the accounting to make a accurate
and valuable decisions on the basis of the information provided by the accountants. And economist
also use the accounting system to calculate budget or cost to make the future estimations or future
decision making. Or many organizations use the accounting records for the accountability of the
public expenditure through this organization calculate the public expenditure that they want to
find. Accounting is also helpful in the culture of the organization because culture is related to
people or public that is related to the society this shows that accounting as a social practice. in
organizations accounting helpful for reconstructing the culture. So, I am agreeing with the
statement of accounting is a social practice. Modern accounting plays an important role in
organizations to achieve their goals and it is also benefitable for the organization’s long term
decision making.
BIBLOGRAPH
 Accounting as a social and institutional practices; (Peter miller 1994)
 Critical perspective of accounting 21 (2010) 361-373’’ accounting infrastructure
and accountability in management of public expenditure in developing counties;
a focus on Nigeria (F.O. lyoha, D. Oyerinde) 23 June, 2009
 Accounting organizations and society; accounting, budgeting and control system
in their organizational context; theoretical and empirical perspective (RIC G
FLAMHOLTZ) Dec, 1983.
 A cultural analysis of management accounting ; an introductory 1993
( E.R. RASYID) and ( M.J. GAFFIKIN )
 The new accounting history; an introduction (peter miller & Trevor
Hooper and Richard Laughlin) volume 16, no5/6 pp. 395-403,1991
 Conceptualizing management accounting change; an institutional
frame work (JOHN Burns and Robert w. Scapens)
 And imbedded model for understanding the development of
accounting control system in nonprofit organization (A. Abraham)
 Reclaiming the public sphere; problems and prospects for corporate
social and environmental (Glen Lehman)