Conceptual Analysis of Value-Based Management and Accounting: With Reference to Japanese Practices

Abstract

The aim of this paper is to outline and discuss the framework of contemporary management accounting known as 'value-based management accounting'. At present, under the severe competition in the international markets, short-lived consumer sentiment and rapid change in technology, management should enhance not only the effective and efficient value of product but also enterprise value for competitive advantage. This value management should look so forward and be so proactive as to be not swung around risk and uncertainty, while management accounting should also serve the management as a supplier of useful information on risk and opportunity. Therefore, this paper focuses on profit opportunities and risks, or what lies behind profits and losses, and tries to build models which are suitable fur applying variance analysis, and to do so with specific reference to Japanese management practice in order to clarify the characteristics of value-based management accounting (VBMA). At the same time, these analytical models are also based on the integration of quick feedback and reliable feed forward controls and support the visual and virtual management system. This paper begins by conceptually examining the relationship between value and a company, clarifies the structures and features of value-based management (VBM) and tries to establish a theoretical model of proactive variance analysis, which would go forward to the formation of a practically analytical model, although the model analysis and the transformation of risks into opportunities should be further supplemented by empirical study. [ABSTRACT FROM AUTHOR] Copyright of Asia-Pacific Management Accounting Journal is the property of Universiti Teknologi Mara Represented by Accounting Research Institute and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)