The critical issues relating to price setting from a management accounting perspective, in contemporary organizations
Management accounting is one of the broadest areas in accounting and it consists of tax accounting, managerial accounting, financialaccounting and internal audits. The tax and financial accounting consists of the generation of financial reports for the external auditors while the internal audit is mainly concerned with the company internal control system. Since contemporaryorganizations are different from traditional ones, the kind of issues they face when it comes to price settings need to be evaluated in an extensive manner (Burns &Scapens, 2000).
Price setting is the determination of the price of a product which can be computed in different ways like marginal cost pricing or activity based costing among others. One such issue is the legal system of the country in which the company is based. Since different countries have a differentapproach to its laws, it is essential that the company consider these legal factors while pricing its product. In addition to this the political factors such as the interest rate along with the inflation is another factor which affects the price setting of the company. If the organization has taken a loan it is essential that it accounts for it in its pricing strategy or the inflation component of the particular country (Granlund, 2001).
(I.C. JPS 1539)