What is Management Accounting Control System?

Management accounting control systems (MACS) is the collective processes that helps in fine tuning the best method of managing complex variables including managers and employees. The primary aim of MACS is to supports the application of underlying procedures, processes and documentations within a given enterprise in such a way that results are maximised.

Management accounting and control system is not about the preparation of documents but an integrated systems of controls that seek ways of implementing organizational strategies which will in turn help achieve organizational goals and objectives.

Management accounting control system is about the information flow within a company that is aimed at providing managers with both qualitative and non qualitative information which gives managers competitive edge.

There is this believe that management accounting and control is about information generation. Well, those that believe this are not far from the truth, but, the truth is that MACS deals with soft issues like motivation of employees, monitoring of events, performance measurement, designing and implementing incentive schemes, setting of standards, responsibility accounting, variance analysis, and budgetary control.

The information gathering aspect of management control system is just a subset of the whole process. The common practice is for companies to provide these information (both financial and non financial) in what is called a balanced scorecard.

According to Drucker (1974), ‘control’ and ‘controls’ are two distinct terms. In his words, controls are measurement and information while control simply means direction. Going by the observation of this great management thinker, we can comfortably conclude that controls are just means to an end and control is the end. Controls are used to provide the information that assists in setting control actions that needs to be taken so as to ensure that plans and objectives are met.

‘Controls’ for example indicates draws the attention of management to the fact that budget for rework has been overrun and that this is because less capable factory workers are employed in the assembly. ‘Control’ on the other hand is the action that is taken by management to ensure that suitable people are employed in the factory thereby bringing down the costs of rework.

Management accounting control system (MACS) represents a fraction of the whole body of controls that includes methods and procedures that are designed to focus employees’ attention towards one purpose – achieving organizational goal.

To fully appreciate the role of management accounting control system within the ‘controls’ system, you need to gain understanding of the interactions within the overall system. Other controls that are found in firms are: action controls, personnel controls and social controls.


Action or behavioural controls: this is the type of controls that involves the observation of people as they perform their duties. This is best used where it is easy to establish a concrete cause and effect relationships. The idea is to see if the correct procedure has been followed by simply looking at the result or output of a process. Arguably, this form of control is the best preventive control.

Personnel or social controls: the main theme here is fostering team spirit and bond building amongst employee. It is believed that by promoting unionism, organizational goal will be internalised thereby making the pursuit of common goal the priority of all. This type of control also known as cultural control is implemented at the recruitment stage by the human resource team. The idea is to recruit or promote only those that have already subscribed to the norms and values of the firm. It is argued that when properly implemented, this form of control will ensure that the needs for other controls are at the barest minimum.

Result or output controls: here, information on the output of work done is collected and analysed. Management simply rely on results to make decision. While this is the easiest type of controls to implement, the fact that management does not have to be knowledgeable in a process before making decision is a big loophole for suboptimal performance amongst employees and divisional managers.


Cybernetic controls: cybernetic control system is the framework upon which management accounting control system is built on. This is likened to the thermostat that controls a central heating of an apartment. When data that come from input is processed, it is continuously monitored by an automatic device which compares the output with deviations from desired result.

Feedback and feed-forward controls: the cybernetic control system can either take the form of feedback or feed-forward. Feedback is all about monitoring outputs achieved against preset outputs and asking probing questions that will help initiate corrective. On the other hand, feed-forward control actual output is not compared against desired output, rather, predicted output are compared against desired output, any variance is taken care of after adjustments have been made.

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