Management Accounting: Roles and Importance of Professional Accountants in Businesses

This article discusses the roles and importance of professional accountants in businesses. It also covers group dynamics, conflict resolution, project management, and problem-solving in management accounting. The six-step problem-solving model is also explained. Course code MGMT101.

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Management Accounting

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Table of Contents
Accounting Professional..................................................................................................................3
Group Dynamics..............................................................................................................................4
Conflict Resolution......................................................................................................................6
Project Management........................................................................................................................7
Problem Solving..........................................................................................................................8
Influence, persuade and negotiation............................................................................................8
Professional Development Plan.......................................................................................................9
Reference List................................................................................................................................10

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Accounting Professional
When somebody is asked about what is the work of a professional accountants, in the common
responses some roles are mentioned such as independent auditors and tax agents. However, this
is not the truth. The functions performed by the professional accountants working for business
companies are often not very well understood. The internal auditors, the independent director
and Chief financial officer of business organisations have some things in common. All the
individuals in the mentioned positions might be working as professional accountants in
businesses. The professional Accountants, besides these rules, also play many other roles in
organisations of all sorts. Their vast range of experience and work has commonality in one thing
which is their accounting knowledge. The role of the professional accountants in organisations
has a great importance as they help in ensuring the significant quality of financial reporting and
statements of a company (Lovell and MacKenzie, 2011). The financial reporting integrity is safe
guarded by the professional accountants in businesses (Greenwood, Suddaby and Hinings, 2002).
Hence, the task of the professional accountants in businesses is to defend the financial reporting
quality at the source where figures and numbers are produced (Nandan, 2010). Business
professional accountants play vital roles which contribute to the overall progress and stability of
the society. In a business organisation, a competent professional accountant is considered to be
an in valuable asset for the company. An inquiring mind to the work of these accountants is
employed by them on the basis of their knowledge and understanding of the financials of a
company (Montano, Donoso, Hassall and Joyce, 2001). Business professional accountants often
ask certain challenging questions, and solve the same by the usage of their intimate skills and
understanding of an organisation and the environment where it operates (Skærbæk and
Tryggestad, 2010). The training of these accountants in the field of accountancy helps them in
adopting an objective and pragmatic approach towards solving problems and issues. This is
considered to be your valuable asset to the management of a company, especially for medium
and small enterprises where the only professionally qualified staff members are the professional
accountants themselves. The accountancy professionals in business organisations help them in
providing advice, help with corporate strategy and assist in reducing down the overall costs of a
company as well as mitigate the risks and improve the top line of the organisation (Skærbæk and
Tryggestad, 2010). When a board director is also professional accountant in the business, the

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interest of the company's owners or shareholders are represented by them. Commonly, the rules
of these professional accountants include: organizational governance such as accounting and
improving the annual budget of a company to the stakeholders for the performance of the
company; appointment of the chief executive; and determination of the compensation of the
management. When a chief financial officer is a professional accountant, they usually have the
oversight of all the matters related to the financial health of a company. This would include
driving and creating the strategic direction of the organization to create, analyse and
communicate financial data and information. When an internal auditor is also professional
accountant, the management of a company is provided with independent assurance by them
regarding the effective operations of the internal control, governance and risk management of the
business organisation. Advice regarding the areas for potential improvements is also provided by
them. In the public sector, the government professional accountants help in shaping the financial
policies which usually have a large impact on the lives of the common people (Lovell and
MacKenzie, 2011). The accountants involved in the academic sector attached with the vital role
of conveying are communicating the skills, ethical underpinnings and deep knowledge of the
accounting profession to the next or upcoming generation (Greenwood, Suddaby and Hinings,
2002).
Group Dynamics
When numerous individuals come together for accomplishing one objective or a particular task,
it can be defined as a group (Forsyth, 2018). The behavioral and the attitudinal characteristics of
a group are known as the group dynamics (Levi, 2015). The primary concern of group dynamics
is related to the way groups, their processes and structures are formed, and the way they
function. Groups are common organisational entity in an organisational setting. The study of
group dynamics and groups is a vital area of study in the organisational behaviour. Group
dynamics is related to how and why groups are developed, as applied to the group development
(Nagy, Akos, Biro and Vicsek, 2010). There are many theories that explain the reason for the
development of groups. As suggested by a classic theory that was developed by George Homans,
groups develop on the basis of interactions, sentiments and activities (Homans, 2017). The
theory basically means that when common activities are shared by individuals, more interaction
would take place between them and they would develop certain attitudes, either positive or

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negative towards each other. The interaction of the individuals, who are involved, plays the role
of the major element in such a theory. An alternative explanation to the group development is
offered by the social exchange theory. According to this theory, relationships are formed by
individuals on the basis of implicit expectations of exchanges which are mutually beneficial
(Friedkin and Johnsen, 2011). These exchanges are based on felt obligation and trust on each
other (Thibaut, 2017). Hence it is essential to have a perception that exchange relationships
would be positive if individuals affiliate with and are attracted towards a group. Another
explanation towards the group formation is offered by the social identity theory. In simple words,
this theory implies that individuals receive a sense of self esteem and identity on the basis of
their membership within salient groups. The group’s nature may be based upon the
demographics, culture or organization. Individuals are increased for belonging to and
contributing to identity groups due to self worth membership and a sense of belongingness in the
group imparts. Group dynamics are related to development and are concerned with why as well
as how groups are formed. It is employed by the various steps in the group formation that usually
maximum effectiveness is not derived out of the performance of groups when they are
established for the first time. Various stages of development were encountered by them in strive
of becoming effective and productive. The same kind of development stages which have similar
resolutions and conflicts are experienced by most groups.
According to the theory of Tuckman, group development includes five stages. The stages are,
storming, performing, forming, adjourning and norming (Bonebright, 2010). During the stages,
various issues and problems should be addressed by the group members. The members should
also determine the ways in which these issues can be resolved. These ways further determine
whether a group would be successful in the accomplishment of its tasks.
1) Forming: Uncertainty and some sort of confusion usually characterize this stage. The major
objectives of the group are not established and the nature of the leadership a task of the group is
not determined. Hence, the following state is an orientation period when the members of a group
get to know each other and share their expectations regarding the group. The rules that should be
followed as well as the group's purpose are learnt by the members. Openness and trust must be
developed at this stage; hence it should not be rushed.

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2) Storming: In this stage of the group development, the highest level of conflict and
disagreement is likely to be seen by the group. The group objectives and the struggle for power
are often challenged by the members of the group. During this stage, certain clashes take place
between individuals for the position of leadership. If the members of the group are able to
achieve cohesiveness by the means of resolution, it can prove to be a positive experience for all
the groups. In this face, criticism and concern is often voiced by members. The group would not
be able to advance to the other stages, if the conflicts are not resolved by the members.
3) Norming: The recognition of shared expectations and individual differences characterized this
stage of the group development. The members of the group are developing a feeling of identity
and group cohesion at this stage. Results are yielded by cooperative or group efforts. The
division of responsibilities is done among members and the evaluation progress is decided upon
by the group.
4) Performing: When the group attains maturity and a cohesiveness feeling, the performing stage
occurs. During this development stage, individuals are accepted by each other and the conflicts
are resolved by the means of group discussion. Decisions are made by the group members
through a rational procedure which focuses on the relevant objectives rather than the emotional
problems.
5) Adjourning: This stage of development is not experienced by all the groups because it is
characterized by the group's disbandment. However, some groups are relatively permanent.
There are various reasons due to which groups disband. The most common reasons for the
disbandment of groups are the accomplishment of the tasks all when all the individuals are
members of a group decide to go on their own ways. Sometimes, a feeling of sadness are closer
is often felt by the group members during the time of leaving.
Conflict Resolution
In order to be successful in their work place, professional accountants need to learn and apply the
skills of conflict resolution (Mayer, 2010). They would need to develop certain strong people and
technical skills. The technical skills help an accounting professional to accomplish a task in a
timely, accurate and efficient manner (Moore, 2014). The people skills help accounting

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professionals in working successfully with all the people inside as well as outside the
organization (Moore, 2014). Unlike the technical skills, and accounting professional does not
receive any training regarding the people skills. This is unfortunate because people who usually
do not get together with other people and try to resolve the conflicts in an efficient manner, are
very unlikely of attaining success in the long run. The people skills of an individual would
include the ability of people in: establishing rapport and getting along with others; comfortably
working with people belonging to different backgrounds and having various personality types;
resolving interpersonal conflicts successfully; influencing, providing and negotiating with others;
and effectively training, supervising and leading others (Mayer, 2010). Conflict can be resolved
by the means of influence, negotiation and preservation. The methods used for resolving conflict
might differ on the basis of whether the accounting professional as to deal with appear, a client
or an individual having less or more power than him. Two conflict resolution methods used by
accounting professionals can be; Implementation of regular feedback meetings; and Creation of a
conflict resolution protocol (Singer, 2018).
Project Management
I participated in a work project in the first year of my college. As such, I was able to use my
project management skills and competence where I was working closely with a public healthcare
organization. The project was set up in order to improve the health and lives of the people of the
community and society. According to the recent reports, the people of the local community I
have been suffering from several diseases and had not been keeping well from a very long time.
Hence, our aim was to look after the health of these people. The group project consisted of five
members, me and four other fellow members. Each member had the same objective that was to
improve the profile of the healthcare organization and promote it at the university.
A project management guide is very important to be followed during participation in any kind of
project (Denscombe, 2014). The application of skills, knowledge, techniques and tools in a wide
range of activities for meeting the requirements of a specific project is known as project
management (Kerzner and Kerzner, 2017). The Belbin's theory was adopted in the project
management task, which help in the clarification of responsibilities and rules to be set (Belbin,
2012). I played the role of a resource investigator, in the context of the Belbin's theory. As such,
I was able to have a high morale within the group throughout the whole project, and I remain to

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be confident and positive. I possessed good communication skills due to which I was able to
successfully co-operate with my team members. However, the project also exposed my
weaknesses because I was not able to see any kind of progress in my work, due to which I started
to get frustrated. Even though I experience the risk of losing interest in my work, I still was able
to motivate my team throughout the project.
Problem Solving
The biggest challenge which I faced throughout the whole project was that I received a very
limited communication from the organization itself. I suggested an event to bring together the
people of the community for making them aware about how to live a healthy lifestyle. Being the
resource investigator of the project, my key responsibility was to communicate effectively
throughout the whole group. However, on the contrary, the organization was not very
forthcoming in their responses. The six-step problem solving model was followed by me during
the process of problem solving. The first problem of the organization was the lack of
communication. Another problem which are discovered throughout the project task was, the
CEO of our organization had another business and was too busy at that point of time for
responding to the mails and messages. I had to complete my task end project, without the
guidance of the CEO of the organization. I was unable to hold an event for the community, since
I was unsure about receiving permission for the same. I was able to promote the healthcare
organization by using their resources, through posters and my own social media accounts.
According to me, the initial objective of the project was made, which was promotion of the
healthcare organization.
Influence, persuade and negotiation
For any professional to influence other individuals within an organization, it is very important to
display their expertise and knowledge in the same. First search, outstanding communication
skills are required. The professional should be assertive as well as approaches at the same time,
since their job is professional itself. For a professional to be good at influencing and persuading,
the CIPD code of conduct should be followed by them the best of services are being provided to
their clients all the concerned. (Bailey, 2011) In order to become a good influencer and
persuader, an individual should consider every member's ideas as valuable. He should be aware
of all the unspoken feelings of the members. An influencer should always act as an influence

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which is harmonizing in nature that means I should be able to mediate and resolve the dispute
between the members. One should be very clear while communicating, and should encourage his
team members for sharing information within the team. In my project task, I was able to
influence my fellow team members. Since there was a lack of communication within the
organization, I tried to influence every member of my group for making a potential change in
such a situation which could help us in attaining our objective.
A kind of decision-making where two or more than two parties approach on an issue, and I'm at
achieving their own objectives which might or might not be the same, is known as negotiation
(Moore and Woodrow, 2010). Throughout the project work, I negotiated with the project team
members as well as the organization itself. I negotiated with my team members regarding the
ideas and techniques of promotion that were suggested to us. Personally, I believed that
Instagram could be used for the promotion of the healthcare organization. However, a fellow
team mate had the opinion that Facebook could do better in the same. I did not try to demoralize
him since it was his own idea. However, a negotiated the situation by supporting my idea with
the help of relevant facts and figures when was able to demonstrate why my idea could be more
beneficial.
Professional Development Plan
Objective Method Resources Completion date
Promote the
healthcare
organization
Use the resources of
the organizations to
promote it around the
university and the
community
Posters, Social media
accounts
25th Dec 2018
Improve the health of
the community
Hold events (without
permission), and bring
together people of the
community to spread
awareness about
health
Events and health
programmes
30th Dec 2018

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USA: John Wiley & Sons.

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Montano, J.L.A., Donoso, J.A., Hassall, T. and Joyce, J., 2001. Vocational skills in the
accounting professional profile: the Chartered Institute of Management Accountants (CIMA)
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