Changing Role Of Management Accountants Accounting Essay

Traditionally, direction comptrollers had focused on accounting, recording, and describing. To prolong in their organisations, direction comptrollers should develop broad scope of accomplishments. It is known that direction comptrollers go knowing about tendencies of concern and finance, prepared to alter the types of undertakings they perform, and willing to get the necessary cognition and accomplishments to work as fully fledged concern spouses.

Harmonizing to IMA study, direction comptrollers were asked to specify their place in an organisation. Thirty nine per cent said that they work in Finance, thirty three per cent said Accounting and 20 eight per cent said something else ( Russell et al, 1999 ) . Management comptrollers have long played multiple functions variably described as scorekeeping, attention-directing, and problem-solving functions ( Simon, Kozmetsky, Guetzkow & A ; Tyndall, 1955 ) . Management comptrollers are sing evolutionary alteration in about all dimensions of their professional work environment. Increasingly, direction comptrollers are being asked to go concern spouses and alteration agents

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I. The altering function of direction comptrollers.

The function of direction accounting can be described as proviso of information designed to heighten the ability of direction and other people within the organisation. They play an of import function in three chief countries: planning, determination devising and commanding. Management comptrollers must develop a thorough apprehension of all facets of a concern, use analytical accomplishments to the sensing of tendencies and the development of prognosiss, provide insightful advice to exceed direction, and serve as alteration agents.

Decision devising and planning are two country that direction comptroller has of import function to pull off. They support company in preparation and execution of scheme. Furthermore, they besides provide information about the appraisal of cost ‘s end product. In the late of 1990s, direction comptroller concerned more about determination devising and planning. But until 2007 to now, the balance of three countries has been re-established. They focus on both of countries including stewardship and scheme development. The ground for this changing can be defined by some of import points. The influence of IT is ineluctable in today ‘s universe, as it would ensue in competitory advantage and growing in concern.

Application of IT in direction accounting has been popular late, as organisations found the importance of direction accounting to their benefit which helps to accesses the organisations ‘ potencies. The direction accounting professional organic structures including Chartered Institute of Management Accountants ( CIMA ) and The Association of Chartered Certified Accountants ( ACCA ) has stressed on IT and stress that IT has got the hereafter to supply information to direction for better determination devising. ( MAIT PDF )

First, the two accounting dirt are Enron and WorldCom. All of these errors were made by hapless controlling of direction accounting. In these dirts, based on the accounting loopholes, hapless funding study, CFO ( main fiscal officer ) and other executive comptroller hided one million millions of debt from failed in trades and undertakings in the study to board of manager and audit.

Second, the debut of International fiscal study criterion ( IFRS ) and Enterprise resource planning ( ERP ) . This is an of import point of altering function of direction accounting. When the new engineerings, new accounting systems becomes increasing twenty-four hours by twenty-four hours and helpful for accounting, the direction accounting can be utilize this to introduce the aggregation, measuring, analysis and communicating of information within the organisation. Through these systems, the direction accounting easy to supply the information to assist pull off resources, planning and commanding. Joan Luft, professor of accounting and information systems at Michigan State University, hinted at this in her talks when she was CIMA ‘s visiting professor in 2006. She contended that tomorrow ‘s direction comptroller needed to be less of an “ enabler ” , because that function served to “ stoke the fires of over-optimism ” . Luft argued that the function should alternatively be that of a corporate brake, which called for comptrollers to be impersonal and pessimistic. ( MA roles word )

Other grounds such as: changing in ordinance and statute law ; corporate restructuringaˆ¦ besides can see as driver for the alteration function of direction comptroller.

II Skills and cognition that is critical to the success of a direction accounting professional

1. Analytic cognition

Harmonizing to Sarah Williams, operations manager at FSS said “ Management comptrollers have become progressively high profile, as direction squads seek elaborate information to do critical determinations. In fact, planetary organisations are puting greater accent on internal mobility, offering top acting persons chances to relocate, peculiarly to the US and Asia. It ‘s widely recognized as a nucleus keeping tool. ( Demand for analytical accomplishments still high )

Management comptrollers are required to widen their cognition related to fiscal and non-financial information. They must acknowledge different types of costs with different intents in industry. For illustration, direct stuffs, direct labor, manufactured overhead costs. Harmonizing to Yazdifar and Tsamenyi ( 2005 ) , analytical accomplishment is expected to be the most of import accomplishment in the hereafter. Persons with a high degree of analytical accomplishments are able to look beyond Numberss to find causes of events and anticipation of tendencies ( Sathe, 1983 ) . In other words, they are more competent and are less constrained by proficient facet of the work. This would probably assist them construct up assurance in their ain abilities to self-manage undertakings and in make up one’s minding what to make, conditions which facilitate authorization ( Honold, 1997 ; Martin, 1994 ) . Therefore, MAs with high degree analytical accomplishments are likely to be involved more to a great extent in the procedure of explicating schemes. These analytical accomplishments can besides profit the scheme execution procedure, through the Management Accountant ‘s ability to foretell tendencies, to take into history possible crisis, and to concentrate attending on facets that are of import in the successful execution of scheme ( Alexander, 1985 ) . The analytical accomplishments of MAs play an of import function in providing direction with utile information for strategic direction ( Rouwelaar, 2007 ) . This is because MAs, with a high degree of analytical accomplishments, would able to look beyond Numberss to find cause of events and supply frontward looking information sing the external environment, indispensable information for the SMP. . Analytically-oriented techniques have been demonstrated to take to successful creativeness coevals. These take advantage of different ways of forming known information to assist near jobs from new positions and tend to follow a additive form or sequence of stairss ( Couger et al. , 1993 ; Miller, 1987 ) .

2. Strategic thought:

Strategic determinations are broadaˆ‘based, qualitative type of determinations which include or reflect ends and aims. Strategic believing dramas an of import function in the direction of company. Management comptrollers have to put ends and aims for company in a competitory environment. They are required to overlook or foretell utile information related to competitory advantage resources for company to acquire more net incomes in the hereafter. For illustration, give some schemes about cost, monetary values in comparing with rivals. Good strategic determinations make company successful and strong in long term. The comptroller is closely involved in determination support and providing advice throughout the concern, on both strategic and operational affairs ( Burns and Baldvinsdottir, 2005 ; Burnett, 2003 ; Howieson, 2003 ; Parker, 2001 ; Boer, 2000 ; Maher, 2000 ; Granlund and Lukka, 1998b ; Ezzamel et al. , 1997 ) , Management Accountant ‘s decisionaˆ‘making is extremely subjective. Whether a determination is good or acceptable depends on the ends and aims of direction of the company. For illustration, direction comptroller must make up one’s mind strategic aims such as the company ‘s merchandise line, pricing scheme, quality of merchandise, willingness to presume hazard, and net income aim.

3. IT system cognition

In modern universe computing machine cognition is must for every individual. IT has become a anchor for most of the concern. Harmonizing to Siegel and Sorensen ( 1999:15 ) , “ The gait of alteration in engineering is going much faster and accounting and finance people are really heavy users of engineering, more so than a batch of other maps ” . Harmonizing to US survey, computing machine accomplishments were the most of import accomplishment that direction comptrollers had learned in the past five old ages. In add-on to, they should hold attending to inside informations about informations modeling, doing prognosiss and projections, developing premises and standards, analyzing procedures, being adaptable and non immune to alter, being strategic and forward looking. Management comptrollers must hold good computing machine accomplishments which will assist them utilizing determination devising tools.

4. Communication accomplishments

Harmonizing to an Institute of Management Accountants ‘ ( IMA ) survey in the USA ( Siegel and Sorensen, 1999 ) reported that the most valued accomplishments for entry degree comptrollers were communicating, teamwork, analysis, accounting, and a thorough apprehension of how a concern maps. Communication accomplishments are accomplishments which help direction comptrollers convey information to users, sentiments from directors, stockholders through formal and informal scenes. Particularly, composing and listening accomplishments are more of import to comptrollers. They need to utilize simple linguistic communication to explicate many academic words related to direction and fiscal accounting to non-accountants. In add-on, good hearing is well required to direction comptrollers because many thoughts from colleagues or outside company aid directors doing good determinations. MAs with high degree of communicating accomplishments are likely to be able to determine and pull off relevant strategic information ( Sathe, 1983 ) which may ensue in greater assurance being placed on them in lending to the scene of strategic waies and therefore encourages a higher degree of engagement in strategic preparation. Management Accountants who have effectual communicators. Communication accomplishments are besides critical for creativeness. A high degree of communicating accomplishments may supply an person with good entree to information and exchanges of thoughts, taking to originative enterprises. When communicating accomplishments are low so these exchanges are likely to be fewer and entree to information poorer, potentially smothering creativeness ( Tan, 1998 )

5. Managerial accomplishment

Robert Katz identifies three types of accomplishments that are indispensable for a successful direction procedure: proficient, conceptual and human or interpersonal managerial accomplishments. Decision devising is one of critical maps in direction accounting. Management must do different determinations on selling, production, and finance. Decisions may besides be classified as strategic and tactical in the short tally and longaˆ‘run. A primary aim of decisionaˆ‘making is to accomplish maximal usage of the concern ‘s capital or resources. Good determinations require relevant information and particular analysis of informations. An apprehension of fiscal statements is critical to the ability of direction to do determinations efficaciously



Analytic cognition

Strategic thought

IT system cognition

Communication accomplishments

Managerial accomplishment

























Assessment of group members ‘ accomplishments and cognition

Members have evaluated themselves with the rate as 1 is really strong and 5 are really hapless for each individual strong and weak accomplishments in direction accounting. These rated accomplishments are shown as below tabular array:

Particularly, Vishal has highest rate in analytical and communicating accomplishments while he is non good at direction accomplishment. Mai has about the five accomplishments mean rate as grade 3, merely IT system cognition has the highest grade among five mentioned above accomplishments. Following, Hong is the individual who evaluated that her best accomplishment is managerial accomplishments while communicating accomplishment is non good as other three accomplishments. Finally, Linh evaluated herself that she has good analytical cognition and strategic thought ability while other three accomplishments are less than these two accomplishments. Overall, each individual has strong expertness in different countries, which could better other individual disadvantages in order to make good occupation as a squad. For case, Vishal has good communicating endowment, which Hong is non good. However, Vishal is non good at managerial accomplishments which other three individuals has greater mark in. likewise we can assist each other to better our weak countries or for case Hong can fall in categories for bettering the communicating. This is possible if she a strong finding in her. She can interact with friends in malice of doing errors she can larn. The more errors she make she can better the accomplishment. Even if we have good analytical accomplishment we have to better it and derive more cognition on it by work outing more figure related inquiries and rehearse more and more. All the squad members will fall in advanced degree categories for bettering computing machine accomplishments. Each member can better our strategic accomplishments by work outing instance surveies and have in-depth apprehension about the SWOT analysis, nucleus competes, PEST, Porter ‘s diamond porter five forces and assorted other theoretical accounts.


In today ‘s coevals direction comptrollers are giving more accent on scheme and decision-making functions, instead than the more traditional countries of costing and fiscal analysis. . The one traditional country to stay high on the list of of import countries for direction accounting is budgeting. Now is the clip to get down fixing for an exciting and quickly germinating direction accounting calling. The epoch calls for professionals with an appropriate balance between proficient accomplishments and comprehensiveness of cognition. This balanced readying can be accomplished merely through a carefully structured educational plan and go oning professional development. Those who are prepared to run into the challenges of a direction accounting calling will be valued members of their organisations.


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