A Reality Check for Management Accounting

This paper examines the impact of financial accounting and ERP system with barcodes on management accounting signs. Latour's (2005) agency-network theory is used with a 1914 to 2005 longitudinal study of the management accounting signs and their referents at a single company, the Hudson's Bay Company. The findings are that financial accounting had a significant impact on the use of management accounting signs by adding abstraction and uncertainty, enabling the entire process to be managed. ERP systems with barcodes allow management accounting to be more precise and more effective. Financial accounting is being replaced by ERP systems with barcodes as the basis of management accounting. The findings contribute a solution to the sign-referent issue by identifying the realities of the referents, social or physical, for the management accounting signs, and revealing that the referents have three dimensions - aggregation, temporality, and uncertainty - that affect the relationship between referents and signs. The findings also allow for the conceptualized of signs and management accounting programs and for proposing hypotheses as to their effectiveness.

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