New Theories on Cost Management
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The purpose of this working paper is to review the new theories on cost management, particularly addressed by the so-called “Relevance Lost”-perspective. This perspective is developed by the two American professors of accounting, Robert S. Kaplan and H. Thomas Johnson. Their point of departure is that in the current climate of rapid technological change, vigorous global and domestic competition and the enormous expansion of information-processing capabilities, current management accounting systems are inadequate and outdated. Their contribution has triggered a fresh and welcomed debate on new management accounting systems. However, the debate is not easily accessible, and the ambition of this working paper is to critically review some of the novel perspectives. Focus is on conceptual issues rather than operational questions, implementation or empirical evidence. The purpose is to discuss strengths and weaknesses of the different models, and explore the conditions under which they seem to be most adequate.