Forums Accounting Disadvantages of Management Accounting

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    Disadvantages of Management Accounting


    1) Manually Maintained Data. Management Accountants interpret the data which are manually maintained by the financial accountants. Reliability of the data can be questioned as the biasedness can be there from the side of the accountant. An accountant can also make the error of principle which will affect the statement of accounts.

    2) Recommendation. There are many alternatives to a problem and the effectiveness of these alternatives is not sure. So, management accountant can only recommend the alternative and cannot say about the effectiveness.

    3) Less Participation. Employees can be less competitive. They may resist certain policies adopted by the management accounting system. So, it will become a failure for the company.

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