This article discloses of an important line of the managerial accounting review and application under the lean environment. The numerous changes in structural and procedural activities of companies which implement lean manufacturing systems. In substance, lean manufacturing is the same as the Toyota Production System developed by Shigeo Shingo and Taaichi Ohno. Globe-class manufacturing and just-in-time (JIT) manufacturing and purchasing are terms that encompass many of the same methods. Accomplished implementation of lean manufacturing has brought about significant improvements, such as better quality, increased productivity, reduced lead times, major reductions in inventories, reduced setup times, lower manufacturing costs, and increased production rates. As the results described for lean firms, lean systems also change traditional managerial accounting practices. The traditional accounting system may not work well in the lean environment. In fact, the traditional costing and operational control approaches may actually work against lean manufacturing. Standard costing variances and departmental budgetary variances will likely encourage overproduction and work against the demand-pull system needed in lean manufacturing. For example, emphasis on labor efficiency by comparing actual hours used with hours allowed for production encourages production to keep labor occupied and productive. Similarly, emphasis on departmental efficiency (e.g., machine utilization rates) will cause non-bottleneck departments to overproduce and build work-in-process inventory. Moreover, the use of a plant-wide overhead rate can produce distorted product costs relative to focused activity-based cost assignments. Distorted product costs can signal failure for lean manufacturing even when significant improvements may be occurring. In conclusion, to avoid obstacles and false signals, changes in both productcosting and operational control approaches are needed when moving to a value stream costing and reporting system rather than traditional costing system. In addition, a traditional performance measurement system has also replaced with a Box Scorecard that is a lean control approach used as a mixture of financial and nonfinancial measures for the value stream.