Bank finance articles and tips

[code][/code] Criticism of absorption cost systems have lead to improvements but has not always lead to the replacement of these systems by either a variable or activity based system. These criticisms address the fact that accounting systems have to balance the contradictory goals of decision-making /control with external reporting. Unintended consequences of using accounting control systems for performance evaluations can lead to decisions that result in individual reward, but not optimal reward for the firm. By adopting specific controls, management defines job responsibilities because these controls are used to evaluation job performance through out the organization. But the fact that most companies haven't adopted variable costing systems indicates that the costs of such systems are viewed as outweighing their benefits. All control systems rely on successful incorporation into performance evaluations matrix for effective execution.