Management Accounting Report: Role Changes, Techniques, Preparation

This report delves into the dynamic field of management accounting, examining the significant changes occurring within the profession. It explores how the role of the management accountant is evolving in response to modern business demands, including the impact of technology, globalization, and the need for strategic decision-making. The report highlights the importance of strategic management accounting and its associated techniques, such as SWOT analysis, BCG matrix, and PESTLE analysis, in enhancing organizational performance and achieving competitive advantages. It also emphasizes the significance of preparing for a career in management accounting, outlining the necessary skills and knowledge required to succeed in this rapidly changing environment. The content provides a comprehensive overview of the key aspects of management accounting, offering valuable insights for students and professionals alike. The report emphasizes the need for adaptability and a proactive approach to stay relevant in the field.

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................1
1. The changes that can be expected to take place in the role of the management accountant...1
2. Use of strategic management accounting and associated techniques.....................................4
3. Suitable preparation for a career in a management accounting role.......................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Management accounting is considered as a processional form of recording the
transactions and daily activities. It is considered as a system of tracing the daily transactions for
accounting purpose. Being a part of strategic management and decision making, management
accounting is also considered as a managerial accounting (Kotas, 2014). This unit indicates
towards the role of management accounting subject to more strategic. Change is defined in
respect of skills and the professionally qualified accountants to establish a better future. Expected
changes and the role of management accounting is explained in organisational context. The way
strategic management accounting has improved the performance of organisation is explained in
this report. Suitable preparation for better career in management accounting role.
1. The changes that can be expected to take place in the role of the management accountant
Concept of management accounting is becoming change as per changing trends and the
business requirements. Today, the scope of management accounting is not only limited to track
the records and transactions of daily business but also considered to be important as per
management perspective. In present scenario, business models are changing due to fundamental
requirements and because of the base of organisational structure. Management accounting
concept also gets modified and reformed as per the business requirements and the business
structures.
Business has been classified in various forms and structures in the 21st century. There are
dramatic changes that have been done subject to operating and managing business organisation.
Business model has been classified in two words – fluid and flexible. Innovations and
technology are two major affecting factors which enhance the requirement of change in business
environment. Advancement and modern techniques has been change the definition of
management accounting. Development and growth of competencies of organisation depend upon
the flexibility of accounting principles and rules.
Challenges and uncertainties also get increased due to changing business models.
Modified management accounting concepts play a vital role to absorb the pressure of changing
business environment and help managers to make effective strategies. Competitive global
business environment and supply chain creates a complex situation (Lambert and Sponem,
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2012). All these signs indicate towards the values and parameters for developing the business for
sustainable growth and development.
Strategic changes are also taking place with the help of management accounting. There
are various types of groups and individuals working together to attain the organisational goals
and objectives. Aim and objectives remain bifurcated as per the individuals but remain
centralised around one organisational aim. It is required to rephrase the form of business as per
the strategic changes in operations and functions. To achieve the core competencies and gain
competitive advantages, organisations are adapting selective approaches and methods of
management accounting.
Change in respect of relationships and openness
There are the types of groups remain associated to get the specific aim and objectives by
operating and managing operations together. Results and outcomes are the creation of portfolio
of skills subjected to deal with challenging activities, risk bearing, financing and the
development of large projects (Li and et. al., 2012). Large business groups and organisational
structures are adapting new aspects of management accounting subjected to innovation and
creation of new products and services.
Various terms are used to understand the need of change accounting structure of business.
Role of management accounting has become vast for implementing new tactics, adapting new
techniques and models with another and changing the previous or existing tracking system.
Concept of management accounting is basically used by the management level and accountants
to improve quality and performance of firm. From managerial purpose, it is also important to
enhance the profitability of organisation
Innovative changes as per the customer needs
In the present scenario, organisations are more focused to attain customer satisfaction.
Consumer satisfaction is one of the aspects which remain associated with the competitive aim
and objective. Traditional approach of looking towards the formal legal and specified tenders and
more subtle business partners and reforms. Business entities try to get the sustainable
information to make the changes in the structure of the business. Organisations are trying to
understand the consumer perception and tends subject to get the competitive and strategic
advantages.
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Traditional approach is considered as one of the effective approaches to understand the
perspective of customers and supplier’s trends. With the combination of modern and traditional
approaches, organisations are able to correlate the dimensions of modern accounting and
strategic aspects (McNeil, Frey and Embrechts, 2015). With the help of information collected
from customers, manager becomes eligible to ascertain prices of products and services. This is
one of the major aspects which leads the structure of organisation towards sustainability.
From supplier’s perspective, management accounting remains essential in purchase
planning and investing the resources in developing the products and production technology. It is
important for the organisation to give the satisfactory consideration to suppliers so that the
payment will meet the supplier’s criteria.
Basically, the changes are taken place in fluid and flexible firms which are using digital
platform to customers to collaborate business infrastructure. New technologies and advanced
tools are also one of the main reasons of increasing requirement of changes in management
accounting. It is important to adopt the changes and the advancements in respect of effective
changes. Environmental effects and the strategic changes help the organisation to improve the
global economy and this is the major key factors which affect the mind set and mentality of
managers and management.
Changes in respect of management decision and strategic planning
Changes are related to specific areas such as financial reporting, taxation and auditing as
well as profit and pricing decision. Role of management accounting and the role of management
accountants are found significant manner (Morales and Lambert, 2013). It is important for the
firms and organisations in respect of implementing the changes in effective manner. In 21st
century, management accountants are focused around providing the important decisions and
making plans and strategies. Multinational engine and the functions are adapting by the
organisations to attain competitive advantages. Moreover, the changes are associated with the
capital budgeting, cash flow management, day to day management and accounting procedures.
Better completion of tasks remain depended accurate information and management decisions.
Decision making and marketing strategies are made around the structural changes and the
requirement of customers and suppliers. Artificial intelligence and modern accounting rules are
the main changing factors which are reducing the extra burden to resolve complex business
equations. Computer based management accounting system, management information system,
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decision making tools and software are using widely in organisations. Moreover, the structural
changes also affect the general accounting concepts.
2. Use of strategic management accounting and associated techniques
Strategic management
it is important to analysing the major aspects and impact of strategic management to
make effective strategies and plans for better implementation. Strategic planning and
management remain depend upon effective strategic planning and marketing approach. This is
related to all about the identification and description of the strategies and the plan to achieve
better performance and the competitive advantages (Quattrone, 2016). There are some structural
changes remain required to attain profitability and sustain stable profitability level with in the
organisation.
Strategic planning and decisions are the combination of multiple decisions and the
actions used in management accounting and the strategic planning. Mangers and the accountants
make strategies related to business plans, changing models, sales and purchase strategies,
marketing plans, training and development plans etc. basically the process of making strategies
requires high competitive skills, analytical skills and decision making skills. There are four
major aspects are analysed by the managers and the accountants to calculate the performance and
the quality of organisation. Strength, weakness, threats and opportunities are evaluated in respect
of evaluating the over all performance of firm and entity.
Strategic planning subject to improve the performance of organisation
Improved quality and enhanced performance are the prime objective of businesses.
Actions and operations remain centralised around making effective strategies and plans for better
control and affectivity. Strategic planning plays vital role in making plans and strategies to
improve the capacity and performance of business entity (Walker, Fleischman and Johnson,
2012). There are some essential aspects are considered while making the strategies plans subject
to attain core competence and better performance. Strategic planning helps the mangers to
analyse the overall structure of business such as operations, management optimization,
appropriately leveraging resources and time management. Small start-ups and large enterprises
are adapting the management accounting tools and methods used in the strategic planning.
Benefits of strategic planning
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strategic planning gives a vast overview and preselective in resect of building strategies
and plans for better operations. It provides a clear purpose and to an organisation subject to
understand the changing aspects and requirement of business. Optimising the resources in
effective manner to attain competitiveness and more profitability are the main objective of
strategic planning (Gordon and Fischer, 2011). It is important to use the skills and knowledge
subject to allocating and appropriating the resources as per the requirement of business.
There are various resources optimised by a firm or a business entity such as financial
resources, human resources, material and labour and artificial intelligence. Strategic planning
helps the managers to utilise the skills and knowledge to sort out the complex business situations
and uncertainties. It provides a flexible organisation structure and try to make more flexible to
absorb the changes and challenges. It helps to classified the organisational goal in separate parts
and combine the efforts towards attaining one organisational goal.
It gives to every individual and person to utilise the skills and knowledge as per the
required areas and fields. It clarify the aims and objectives of an organisation and clear the vision
and mission statements. Managers and employees become eligible to understand the future goals
and sustainable vision. This is the process which contains larger over arching plans for
sustainable growth. It helps to bifurcate the organisational goals and objectives in respect of
future projects and plans.
Various type of plans are made by the managers and employees such as project based and
event based plans. Resource management and human capital management is the creation of
strategic planning. After providing plans and strategies it also assist the managers to consolidate
the outcomes from different departments and analysing the performance as per the desired
outcomes. This is one of the valuable method which is increasing day by day and being
implemented as per the changing business environment. It remain focused to maintain the natural
business environment with in firms or organisation.
Associate techniques subject to strategic management
various type of strategic management techniques are used by the organisation such as
SWOT analysis: this is considered as an overall analysis subject to analysing strength,
weakness, opportunities and threats. This is considered one of the effective strategy in respect of
analysing firm's current situation and position of organisation. This strategic management
technique helps the managers to understand the internal and external capacity of organisation. It
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helps to detect the conflicts and issues remain associated with the growth and development of
organisation.
Boston Consulting group (BCG) matrix: this technique helps the organisation to classify
the targeted areas of sale of products and services (Mihăilă, 2014). As per this technique growth
and high market share products are bifurcated from low sale groups and products. These
products are retained at the priority level. Low growth and market products are remained
separated.
GE multi factor portfolio matrix: this strategy remain based upon industry attractiveness
and business strength. This strategy works around the factors if competitors in the industry. Rate
of growth remain centralised around solid position. This technique indicates towards the
monopolistic situation of an organisation in which competitors are found weak in comparison of
firm.
PESTLE analysis: this analysis is considered as external analysis environmental
analysis of business abject to organisational growth. It is an analysis of political, economical,
social, technical, legal and environmental analysis.
Balanced Scored card: It is a kind of strategy of performance management related tool
which are used through managers in order to keep the track of an implementation of activities
through employees to monitor and also control all consequences which will be arise from
actions. It gives a proper framework and also language which enable to explain strategy in a
reliable and consistent manner.
Benchmark theory: This type of theory is introduced through Ralph Wedgwood and it is
helpful in determine the important methodological components which contribute towards
effectiveness of benchmarking and also establish them with in proper framework.
Relationship of strategic management with management accounting
this is the main aspect to understand the role of strategic management subject to
managerial accounting. Strategic management basically provide a smooth path to the managers
subject to managing the resources and making effective strategies. Strategic management assist
employed to make strategies and plans to attain profitability and helps the senior managers in
decision making process.
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3. Suitable preparation for a career in a management accounting role
With the changing business environment there is vast opportunities are found in
management accounting (Cugueró-Escofet and Rosanas, 2013). Management accountants are
playing vital role in respect of managing the operations and functions of an organisation. It is
require to improve the feasibility of management aspects. Managerial accounting contains vast
range of responsibilities and liabilities. Accountants have to keep the daily accounts and
transactions of business, making financial plans, marketing strategies for better management.
There are type of courses operated by the management and accounting institutions which
helps the accountants to deal with complex business situations (Anderson and et. al., 2013).
CMA (Certified Management Accountants) are the person who contains in depth knowledge of
management and accounting. This course remain associated with the study of cost accounting,
financial planing and management and study of managerial issues.
Job responsibility remain bifurcated in several parts such as budgeting, handling taxes
and managing the assets and equities in optimum manner, determine the compensation and
benefits packages and aiding in strategic planing. An accountant deals various type of business
situations such as prepare financial statements, assets internal controls, analyse and prepare
monthly financial statements and information, assisting managers and employees subject to
making budgets, supervision of accounting staff, filing the tax returns and analysing the general
and daily accounts.
Career opportunities are found in various sectors such as controller, director of
accounting and finance and CFO, accounting manager, cost accountant, junior internal auditor,
tax accountants and staff accountants (Career in managerial accounting, 2017). As a manager
there is a huge opportunity found in respect of managing and leading the operations and
management of an organisation. Requirement of managerial accounting is found in both the
public and private sector. Fundamental skills assist the managers to manage the structure of
organisation.
CONCLUSION
This unity is prepared to analyse the role of management accounting in structural change
of organisation. Channing aspect of management accounting is defined in respect of caning
business environment. Role of strategic management is defined in respect of improving the
performance of organisation. There are associated techniques defined in respect of organisational
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performance. There is a suitable preparation for a career in management accounting role defined
in this context.
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REFERENCES
Books and Journals:
Kotas, R., 2014. Management accounting for hotels and restaurants. Routledge.
Lambert, C. and Sponem, S., 2012. Roles, authority and involvement of the management
accounting function: a multiple case-study perspective. European Accounting Review.
21(3). pp.565-589.
Li, X., and et. al., 2012. A comparative analysis of management accounting systems’ impact on
lean implementation. International Journal of Technology Management, 57(1/2/3),
pp.33-48.
McNeil, A. J., Frey, R. and Embrechts, P., 2015. Quantitative risk management: Concepts,
techniques and tools. Princeton university press.Monden, Y., 2011. Toyota production
system: an integrated approach to just-in-time. CRC Press.
Morales, J. and Lambert, C., 2013. Dirty work and the construction of identity. An ethnographic
study of management accounting practices. Accounting, Organizations and Society,
38(3), pp.228-244.
Quattrone, P., 2016. Management accounting goes digital: Will the move make it
wiser?. Management Accounting Research. 31. pp.118-122.
Walker, K. B., Fleischman, G. M. and Johnson, E.N., 2012. Measuring management accounting
service quality. Management Accounting Quarterly. 13(3). p.15.
Gordon, G. A. and Fischer, M., 2011. Accounting strategy to improve public higher education
management. Journal of Accounting and Finance. 11(3). p.11.
Cugueró-Escofet, N. and Rosanas, J.M., 2013. The just design and use of management control
systems as requirements for goal congruence. Management Accounting Research. 24(1),
pp.23-40.
Anderson, S. W. and et. al., 2013. The use of management controls to mitigate risk in strategic
alliances: Field and survey evidence. Journal of Management Accounting Research.
26(1). pp.1-32.
Mihăilă, M., 2014. Managerial accounting and decision making, in energy industry. Procedia-
Social and Behavioral Sciences.109. pp.1199-1202.
Online
Career in managerial accounting, 2017. [Online]. Available through:
<https://www.investopedia.com/articles/professionals/041713/what-management-
accountants-do.asp>.
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