Discuss current issues in strategic management accounting.

Cost of producing good quality products consist of appraisal cost and prevention cost.
Although the companies have to incur more costs in order to produce high quality product,
their product value ….
Issue 1: Recall of product
Example :
1) Honda Malaysia
We perceived Honda as a well-established company- but still have issue with quality-
Why? - precautionary recall. How? Who? What?
Apr 5, 2018 - Honda Malaysia Recalls 28,399 Units Of Vehicles For Takata Passenger Front
Airbag Inflator Replacement
https://www.honda.com.my/corporate/press_release_details/667/Honda-Malaysia-Recalls-
28,399-Units-Of-Vehicles-For-Takata-Passenger-Front-Airbag-Inflator-Replaceme
Jul 6, 2018 - Honda Malaysia Continues To Emphasize Replacement Of Affected Takata
Airbag Inflators
2) Ikea - eigth fatalities reported
Issue 2 : products were banned
https://www.transportation.gov/briefing-room/dot-bans-all-samsung-galaxy-note7-
phones-airplanes

1) 2016 (Samsung being banned)

The U.S. Department of Transportation (DOT), with the Federal Aviation Administration
(FAA) and the Pipeline and Hazardous Materials Safety Administration (PHMSA), today
announced it is issuing an emergency order to ban all Samsung Galaxy Note7
smartphone devices from air transportation in the United States.

3) Health Ministry bans three cosmetic products containing poisons

Read more at https://www.thestar.com.my/news/nation/2018/02/23/health-ministry-bans-
three-cosmetic-products-containing-poisons/#WDyvA2sPlS1vDoT4.99
https://www.nst.com.my/news/nation/2017/05/242987/health-ministry-bans-seven-
cosmetics-products-containing-poison
Issue 3:

A product recall is a request from a manufacturer to return a product after the discovery of
safety issues or product defects that might endanger the consumer or put the maker/seller at risk
of legal action.
The recall is an effort to limit ruination of the corporate image and limit liability for
corporate negligence, which can cause significant legal costs. It can be difficult, if not impossible,
to determine how costly can be releasing to the consumer a product that could endanger
someone's life and the economic loss resulting from unwanted publicity. Recalls are costly. Costs
include having to handle the recalled product, replacing it and possibly being held financially
responsible for the consequences of the recalled product.
A country's consumer protection laws will have specific requirements in regard to product recalls.
Such regulations may include how much of the cost the maker will have to bear, situations in
which a recall is compulsory (usually because the risk is big enough), or penalties for failure to
recall. The firm may also initiate a recall voluntarily, perhaps subject to the same regulations as if
the recall were compulsory.

As consumers, we expect the manufacturers to produce quality products that are

equivalent to the value being paid in order to get that products.