MANAGEMENT ACCOUNTING

Management Accounting

Management Accounting

Management Accounting

Management accounting is a combination of three domains which are accounting, management and finance. The distinction in the term management accounting is due to the use of leading edge tactics used for driving the business processes successfully. This field is completely different in comparison to the traditional accounting. It is particularly associated with the business decision making and performance. Management accounting has introduced numerous benefits in the field of both management and accounting, modifying the business processes effectively. This concept supports the management in the formulation and achievement of the organizational strategies.

Management Accountants

Management accountants are the key role players in the concept of management accounting. The management accountants advise their management about the implementations of financial structures and the implications of projects in a business. They are responsible for formulating the financial business strategies. The management accountants identify and demonstrate the financial consequences associated with the organizational decisions. The audits (internal and external) are conducted under the assistance of the management accountants. The financial perspective of a company brings integrity to a business and monitors the financial spending and control of the organization.

Changing Role of Management Accounting

The business models all over the globe are changing dynamically which will change the fundamental role of the management accountants with the passage of time. The management accountants and professionals need to adapt and cope up with the latest challenges occurring in the area of management accounting. In the current scenario, the business dynamic are flexible and rapid. The concept of innovation has enhanced the operational processes and the techniques used in the organizations. It is essential to meet the modern business complexities and integration to compete with the market. The organizational changes are a response to the environmental changes, and the managerial accounting changes are ultimately a reason of these changes. The changes in management accounting have dominated the academic as well as the professional aspect of literature, in recent times (Mat, Smith et. al, 2010, pp. 67). Among the most common changes are the environmental, technological, extensive competition and changes occurred due to globalization.

In the context of organizational level, the management accounting changes are on greater emphasis, in order to deal with the core competencies of the organization. The changes in the domain of management accounting have an indirect impact on the functionalities of the organization. The changes in the business setting have changed the management of the organization operations and trade. These aspects of accounting support and make possible successful and efficient management and operations. On the other hand, some of the changes create a direct impact on the management accounting principles (Cooper & Dart, 2009, pp. 02). The formation of global markets, the focus on client relations and superior quality of products and services, and the improvement of technologies all serve up to boost the level of competition among organizations. The organization needs actions and performance indicators regarding all these aspects, and managerial accountants as conventional information specialists of the firm, have to present ...