Sample Thesis Paper
Lean accounting is a growing concept especially amongst the companies who have implemented lean manufacturing and operations to reduce their costs and increase their efficiency. The basis behind the lean accounting development pertains to the observations that the traditional accounting procedures do not correctly reflect the efficiency in the organization which results due to lean operations.
Lean accounting is essentially “designed to state the company’s financial condition accurately for external stakeholders through the balance sheet and income statement, following the generally accepted accounting principles.” (Engle, 2005) the traditional forms of financial reporting and accounting procedures on the other hand tend to manage the costs which are depicted as being lower than the standards. The advantages that are available to the businesses through the use of lean accounting pertain to improvement in the communication, the inventory valuations stock management as well as the improvement in the process of decision making and book reporting at the company.
The analysis of the different tradition costing and accounting procedures and the modern lean accounting practices depict that the tradition accounting procedures can be modified by changing the inefficiency oriented variable to reflect a leaner form of accounting practice for the company. It is also possible to combine the different tradition forms of accounting procedure like standard costing and variance analysis or variance analysis and absorption costing to implement efficiency oriented lean accounting. Moreover it has also been identified that the use of information technology specific to accounting systems can help in the implementation and the reporting to support lean accounting.