The search for gain in markets and firms: A review of the historical emergence of management accounting systems

Abstract

This essay explores the organizational conditions underlying the emergence and role of management accounting and the organizational processes through which management accounting affects society. Management accounting emerged to provide information needed by organizers of firms-economic entities that operate partly outside of the market system. Organizers create firms in order to earn higher returns from economic resources than they can earn through ordinary market exchange. Management accounting information defines the internally-controlled domain of opportunities in which organizers search for higher returns. This information also influences the effort that organizers and other members of a firm make to derive gains from internally-controlled resources; and it shapes the opinion that society holds of firms' activities.