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International Journal of Academic Research in Business and Social Sciences
March 2012, Vol. 2, No. 3
ISSN: 2222-6990

Application of Information Technology in Management
Accounting Decision Making
M. Krishna Moorthy
Senior Lecturer, Faculty of Business and Finance, Universiti Tunku Abdul Rahman,
Kampar, Malaysia.
E Mail: krishnam@utar.edu.my

Ong Oi Voon
Tutor, Faculty of Business andFinance, Universiti Tunku Abdul Rahman,
Kampar, Malaysia.
E Mail: ongov@utar.edu.my

Cik Azni Suhaily Binti Samsuri
Lecturer, Faculty of Business and Finance, Universiti Tunku Abdul Rahman,
Kampar, Malaysia.
E Mail: azni@utar.edu.my

M. Gopalan
Lecturer, Faculty of Management, Multimedia University,
Persiaran Multimedia, Selangor Darul Ehsan, Malaysia.
E Mail: gopalan@mmu.edu.myKing-Tak Yew
Senior Lecturer, Deputy Dean (Student Development and Industrial Training),
Faculty of Business and Finance, Universiti Tunku Abdul Rahman,
Kampar, Perak D.R., Malaysia.
E Mail: yewkt@utar.edu.my
Abstract
This study analyzes the use of Information Technology (IT) in management ac counting and also
the potentials and drawbacks of adopting IT in management accounting. IT changesfrequently
and accounting standards remain for many years without any major change. IT and
management accounting are vital to both small and large organizations. Accounting bodies and
communities have instantly stressed the need for a shift in accountants’ education by
increasing the knowledge of information systems and IT knowledge. This paper examines the
relationship between IT andmanagement accounting. The past literature also indicates the
potential of IT in management accounting that will simplify the calculation process and better
presentable options of the business data for effective decision making. The literature findings
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International Journal of Academic Research in Business and Social Sciences
March 2012, Vol. 2, No. 3
ISSN: 2222-6990also indicate that IT has major impact on the costs, as implementing IT will result in big
spending on the technology hardware, software and IT personnel. The study also shows that IT
can improve accounting department efficiency and produce result effortlessly, timely and
accurately. Accountants are recommended special attention to this issue.
Keywords: Information technology, managementaccounting, budgeting, business decisions,
system technology
Introduction
Information Technology (IT) is a powerful tool that can play a big part in making an
organization’s business a successful one. The world has recognized that the advent of internet
computing would be very dominant and foremost in the near future. We can see the impact of
the technology in many business areas such astrading, publishing, filming and many more. The
IT and internet have provided the opportunity for organizations to offer their products to
customers anywhere in the globe. However, the growth of IT and internet remain staggering,
the large portion are untapped in accounting, especially management accounting.
Management accounting provides information on the budget, capital investment status, payback period etc. to the internal users and decision-makers. Many organizations have ignored
the prominence of management accounting and focused only on financial accounting. The
pivotal use of management accounting would be more significant for planning and control
operations when it is incorporated with current IT.
Many accounting studies have incorporated Information Technology paper as partof the
accounting program to introduce IT to future accountants. For example, Chartered Institute of
Management Accountants (CIMA) has included many Information Systems subject in to their
syllabus.
History
IT and accounting come from different background and history. Accounting has been practiced
since 8500 BC till today and there are not many changes to the way accounts are maintained....