Analyzing Emerging Issues in Management Accounting: A Detailed Report

This report delves into the evolving landscape of management accounting, addressing critical issues and exploring the impact of digital technology, corporate governance, and sustainability on modern business practices. The study examines how digital tools like ERP systems and data analytics can overcome the lack of skilled labor, enhance transparency, and improve decision-making. It investigates the role of corporate governance in mitigating ineffective regulatory practices and fostering a robust internal control environment. Furthermore, the report analyzes the importance of sustainability and environmental accounting in managing waste, reducing costs, and promoting responsible resource utilization. The rationale behind the research emphasizes the need for technological advancements, ethical practices, and skilled personnel to navigate the complexities of the 21st-century business environment. The literature review synthesizes previous research on digital technology, governance, and sustainability to provide a comprehensive understanding of the challenges and opportunities in management accounting. The report highlights the importance of cost analysis, productivity, and maintaining a balance between innovation and environmental responsibility for long-term success. The study aims to contribute to the body of knowledge by providing valuable insights for managers and organizations seeking to optimize their accounting practices.

Running Head: Business & Law
Faculty of Business & Law-School of Management (MET)
[Name of Writer]
[Name of Institution]

1 Introduction
1.1 Background
It can be seen that with time as technology innovation entered the world the theme of working in
corporate companies is revolutionized with that. Different companies are trying to find modern
ways and methods to introduce innovation in their framework to bring betterment and digital
change for maintaining the competition in the market (Gibassier & Alcouffe.,2018). In the same
manner, the 21st century brings with it the element of profitability to be maintained and to keep
sustainability up to the mark as well. Numerous issues related to management accounting were
raised with time as the strategic management wants to operate by implementing best practices in
their operational process. The factor of globalization brings in with it for adopting new methods
in the framework of digital technology (Bonsón & Bednárová., 2019). As the preferences of the
people have changed therefore the demand for accounting management changes as well due to
which certain issues in the management accountant increased.
It becomes an important element for the corporations to make use of the technology in such a
manner to become cost-effective and maintain sustainability as well. Companies need to focus on
generating productivity in such a manner that the surrounding environment should not get
affected by the production and operational process (Saberi et al., 2019). It is significant for the
managers to give relative importance to the management accounting as with the help of it the
management can evaluate their business processing with the help of which they can develop
short and long term plans. As the focus of the managers towards management accounting brings
in certain issues that include ineffective regulatory practices, lack of knowledge and skills, the
ineffective implementation of environmental accounting which hinders the sustainability of the
companies in the context of accounting (Knudsen., 2020). In the 21st century as the companies
are running towards bringing innovation which brings in with it accounting fraudulent activities
as well which raises the need for bringing in more new methods for adopting new technological
advancements for making the company's accounting system stronger than before.
The financial world has gone through great scandals in the past which includes ENRON, World
Com, etc. due to which it becomes important for the companies for maintaining accuracy and
transparency in their financial information which requires proper governance and check and
balance. Many companies in the world are facing issues related to ineffective regulatory
practices within their framework which are arising due to a lack of knowledge and skills in the
individuals (Sachs et al., 2019). It can be resolved by the implementation of digital technology
solely within the companies which helps in identifying the lacking and the areas which require
the need for a change. Many organizations are still using ineffective methods related to
management accounting due to which it becomes difficult for them to survive in the market. It is
significant for the corporations to focus on doing a cost analysis to evaluate their expenses for
becoming cost-effective which will help them in becoming more focused on using their
resources in an effective manner which will be helpful for them for survival in their future as
well (Llopis-Albert et al.,2021). The use of digital technological aspects, effective corporate

governance, and maintaining the sustainability ratio helps the companies for emerging into the
world and it will help in eradicating the issues which arise in management accounting (Okorie et
al., 2018). Therefore managers need to focus on bringing skillful labor and upgraded technology
within the internal environment of the corporation.
1.2 Rationale
It becomes important for the companies to bring in new methods of technological aspects for
overcoming the issues that arise within management accounting. The reasoning behind selecting
this topic is that it becomes a general issue in almost every company that the workforce doesn’t
possess certain knowledge and skills due to which lacking from employee end brings in
unnecessary impact on the organizational performance (Lee et al., 2020). There arises a need
from the management end for maintaining proper planning and controlling on the management
accounting principles to bring professionalism and for maintaining the ethics as well. The main
reason behind focusing on management accounting principles is that it helps in shaping the
overall budget planning and helps in effectively maintaining internal business processes and
capacity utilization becomes easy with the help of it (Papadopoulos et al., 2020). Although
catering to the issues is a difficult task and it requires time and effective corporate management
which will bring in skillful labor with the organization who possess certain knowledge of how to
make use of regulatory practices and bring in innovation.
Those companies in which ineffective regulatory practices are at their peak level fail to perform
in the long run and their reputation decreases in the market. Moreover, they are not able to
survive in front of their competitors and face a competitive edge in front of them (Oliveira et al.,
2020). Hiring experienced personnel who possess certain knowledge regarding accounting
principles and how to maintain check and balance and for making the company cost-effective it
is necessary for the management to make use of the best people for the job.
1.2 Research Aim, Objectives, and Questions
The research aims to study the emerging issues in management accounting while relating the
impact with governance, sustainability, and the use of digital technology in corporations.
The objectives of the research are as follows:
 To examine the impact of digital technology on overcoming the lack of skilled labor.
 To analyze the impact of corporate governance on ineffective regulatory practices within
the organization.
 To find the role of sustainability for bringing effective environmental accounting in the
corporations.
The questions posed by this study include:
 What is the impact of digital technology on overcoming the lack of skilled labor?

 What is the impact of corporate governance on ineffective regulatory practices within the
organization?
 What is the role of sustainability in bringing effective environmental accounting in
corporations?

Literature review
The discussion in this section is regarding the previous research work that is being conducted by
various researchers in their studies on the role of digital technology, governance, and
sustainability for bringing in the best management accounting principles within the framework of
the organizations.
2.1 Digital technology
With the changing traditions and with time companies are trying to shape their management
accounting framework more adaptable and reasonable which assists them in resolving the issues.
Different research studies are being conducted from time to time which provides the importance
of using new technological methods with the help of which companies can make their internal
structure more organized (Marshall & Lambert., 2018). According to one of the researchers, it
can be seen that the use of ERP systems is effective as they are more responsive towards the
accounting problems and provide more accuracy towards forecasting and cost behavior. The use
of statistical models and algorithms helps in bringing progress and improving the accounting
performance level as well. The organizations need to maintain their accounting principles up to
the mark as it helps in maintaining the financial report for the company. It can be observed that
previously manual accounting was being used within the framework of the companies which was
not an effective method (Cezarino et al., 2019). One of the research claims in his studies that the
element of transparency was not involved in those companies which focus on using the old
method of accounting i.e. the use of manual accounting methods.
With time, repetitive accounting tasks regarding performing calculations were overcome with the
help of enterprise resource planning and integrated information systems which enable the
management accountants to utilize more time and less effort for the decision-making process and
it made easier for them. Moreover, it has been theorized that ERP and IT can enable more
structural authority towards the lower workforce as well as helps in bringing decentralization of
decision (Attaran, 2020, July). For overcoming ineffective skilled labor many companies are
trying to adopt data analytics and automated forecasting technologies with the help of time series
techniques and by the use of simulation. The process of automation helps in overcoming
accounting issues and provides accounting management ease for evaluating the expenses of the
company with the help of which the company can become more cost-effective. Digitalization
helps the companies maintain effective relationships with the suppliers, customers, companies by
providing new products and service offerings. Many corporations are using robotization which is
one of the advanced methods with the help of which management accounting becomes easy
(Kurpjuweit et al., 2021). According to past researchers, the implementation of digitalization
brings comfort for corporations in every manner as with the help of it they can analyze profit
ratio and manage their expenses as well.
2.2 Governance
The availability of good corporate governance is significant within the framework of the
organization as effective management helps in overcoming controlling regulatory principles.

With technological innovation growth and performance can only be possible by the
implementation of an effective structure of management that guides the workforce effectively
and keeps them motivated at every level (Karaman et al., 2020). For maintaining accounting
management principles up to the mark the role of senior accounts manager will be significant in
bringing efficacy in the working environment. According to past researchers, the involvement of
corporate governance can be fruitful for the organizations which lack behind from performing.
As the experience of the senior manager if appointed in that organization will help in guiding the
employees towards the right direction. Moreover, it will help to shape the working capabilities of
those employees who lack behind from performing well. The role of effective corporate
governance helps in overcoming ineffective environmental accounting principles. One of the
researchers claims that those companies who don’t have good leaders for providing effective
governance such companies lack behind from performing efficiently. Whereas good governance
helps in maintaining sustainability ratio as well (Ahmed et al., 2020). Moreover, the element of
governance helps in resolving conflicts between the workforce and between the supervisors and
the employees as well.
The role of enterprise performance management (EPM) which is one of the trends of managerial
accounting helps the strategic management to monitor the performance level of each individual
to improve business performance. Past studies emphasize the use of EPM in the framework of
companies to bring efficacy (Habib & Hasan., 2019). Those managers who use this element can
govern their personnel effectively. In the same manner, the use of enterprise resource planning
(ERP) helps in shaping the management accounting with the help of which the strategic
management can analyze the financial performance of their company and it assists in managing
and integrating the company’s overall activities i.e. operations, manufacturing, human resource,
etc. The use of digital technologies in this modern era helps in shaping the governance principle
as well. The managers can evaluate and provide appropriate checks and balances on the
operational process of the company (AlQadasi & Abidin., 2018). According to one of the
researchers for those companies who want to become cost-effective in every manner the factor of
governance is significant as the upper management can keep control of the resources and utilize
the cost and resources in the best possible ways which helps in generating revenue and growth
for the company.
2.3 Sustainability
For maintaining sustainability it is significant for the companies to focus on limited and quality
production which requires proper use of the available resources and for that, it is relatively for
the operational managers to use a cost-cutting approach and utilize that cost in other production
processes. According to one of the studies, the role of environmental accounting is significant as
it provides evaluation over waste control (Schaltegger, 2018). Therefore it is necessary for those
companies who lack behind in the utilization of their resources to focus on reporting their waste
management costs. Moreover, the use of green accounting will help the companies in identifying,
measuring, and analyzing the costs that are related to the environment. Every company has a

corporate social responsibility due to which management accounting cannot be separated from its
environment (Burritt et al., 2019). The growth and success of the corporations are dependent
upon the quality production, profitability ratio, and environmental responsibility.
One of the researchers claims that environmental cost refers to environmental quality cost and it
is related to the creation, detection, repair, and prevention of environmental degradation and
maintaining an ecofriendly environment. The role of accountant and accounts manager is
significant as until they will not identify the problem from the management decision making
process in the form of production cost until that period the company is not able to incorporate
environmental change as well. Moreover, by proper understanding regarding the environmental
costs, the products will be designed in such a manner in the future which will be environmentally
friendly (Ostaev et al., 2020). The strategic management needs to focus on maintaining a
sustainability ratio and the production process needs to be limited according to that which can
only be possible by proper management accounting.

Methodology
3.1 Research Method
As there are two different types of research methods mainly primary and secondary. In the
primary research method, the data is collected by doing one on one interviews or by physically
involved with the respondents. Whereas in secondary the focus is maintained towards past
research work and those studies that are already conducted before. This study is using the
secondary research method. The researcher will try to use the articles from Google scholar and
after evaluating those articles he is making critical discussion in the literature review. The
articles of the last 5 years will be used for the discussion in the literature review and are focused
upon the designed research objectives.
3.2 Research Approach
The research approaches are of two different types which the researchers use in the research
work which named as inductive and deductive approaches. The inductive approach is used in
qualitative research and the deductive is used in quantitative. As this research is qualitative
therefore inductive approach will be used in this study. The data will be gathered from the
articles and journals of the last five years, not more than that and well-known journals and
articles.
3.3 Data Collection
Data collection is one of the important tools for the research which works as a base for the whole
research paper. Therefore the collection of data should be taken into consideration by using
appropriate and effective methods. Generally, there are two types of data collection methods
names as qualitative and quantitative. As this study is qualitative therefore the method that will
be used for collecting qualitative data is with the help using past research work and studies.
Google scholar is considered as the base engine for finding the related articles for the last five
years on the topic for presenting the valid argument.
3.4 Data Analysis
Generally, data analysis methods are divided into two different categories namely qualitative and
quantitative methods which are further segmented into two different types of results named
qualitative and quantitative assessment methods. For presenting the results critical analysis in the
literature review is focused upon. The results that will be generated will be related to the general
corporations regarding how they practice their management accounting principles. The
assessment of different research articles and journals will be done in the literature review. The
numbers of research articles to be selected for this study are five which will help to study the
emerging issues and challenges in management accounting.
3.5 Ethical Considerations
For maintaining the reliability and validity of the results it is significant to consider ethical
considerations in the research studies. For the respondents from whom the data is being gathered

it is very important for the researcher to maintain complete confidentiality and informed consent
from the respondents as well. As this study is emphasized upon qualitative research approach
and as the data is being gathered through past research articles therefore the personal information
from the participants is not considered in it as the data that will be gathered is secondary. The
articles and journals that are being used from Google scholar are available to the general public
and don’t contain the element of confidentiality and before giving a review which doesn’t require
any authorization process. Moreover, the list of sources will be mentioned later in the reference
section for preventing copyright concerns.

4. Research Timeline
This study will be based on the following timeline of dates and schedules.
Stage
Task
Target
(Measure
to indicate
the task is
completed)
Activity by Weeks from the start of the project
1
Introductio
n Introductio
n chapter
Sept -
2021 Oct- 2021 Nov-2021 Dec-2021 Jan-2022 Feb-2022
5 6 7 8 9 1
0
1
1
1
2
1
3
1
4
1
5
1
6
1
7
1
8
1
9
2
0
2
1
2
2
2
3
2
4
2
5
2
6
2
7
2
8
2
Literature
Review
Literature
review and
gap would
be
identified.

3
Data
collection
and
methodolog
y.
Data will
be
collected
from
previous
research
articular
and
journals
and
compiled
within the
literature
review.
4
Results and
discussion.
Results
and
discussion
section
would be
compiled.
5
Finalizing
the changes
Conclusion
and
proofreadi
ng would
be done

The rationale for using this timeline is considered for having enough time for every single stage
of this study. Firstly the introduction of the chapter is completed after the research proposal gets
approval. After completing the first chapter of introduction, the second chapter would be
completed which is comprised of a literature review and after getting its approval the researcher
will move forward to the next chapter i.e. methodology. For completing the whole research paper
every chapter will be completed in sequence-wise for avoid any hurdles which might be faced at
the end of this research paper. After the completion of this report formatting and final checkup
will be done and the evaluation process will be done by the supervisor. The final draft will be
delivered in Feb and in case of any revisions, the set deadline given by the supervisor will be
met. The main reason behind selecting 1 month for each milestone is to ensure quality work.
Although this work can be done in three months to avoiding rushing which can impact the
quality of work the period is extended and enough time is being set for each chapter for ensuring
quality work.