External environment
The differing traits of external environment surrounded by an organization effect management accounting systems to a greater extent and mold it towards prerequisite of exterior conditions. External environment can be uncertain or certain, static or dynamic, simple or complex, and turbulent or calm. Empirical studies suggest that organization with a stable and certain environment rely on financial performance measures particularly budgetary conformance and other type of monetary variables. The management accounting system does not require greater sophistication in such organizations and it works on presupposed targets expected to remain valid for ensuing performance appraisals. Pragmatic studies further reveal that greater decentralization, larger erudition, and availability of broad scope management accounting system attributes to the conditions of environmental uncertainty, complexity, and turbulence.