Changing Roles of Management Accountant - Essay Example

Changing Roles of Management Accountant Introduction Management accountant and the system of management accounting had a core importance in working and operations of the corporates. Over the years they have been fulfilling their traditional on job requirements like counting, comparing, recording and reporting financial information. The role of management accountants specifically concentrates in the two areas that are supporting management decision making and monitoring and control however it is being discussed in the literature and research relating to the corporates that management accountants would be required more than just their traditional roles (Gudrun, John, Hanne, & Robert, 2010). It is obvious that as over the years business and corporate world has evolved and gone through many changes thus management accountants being part of this system would also face transformation in their roles. It is the versatility that is being demanded today therefore a professional cannot limit or restrict itself to its particular job. It is a fact that today management accountants face many challenges especially competition from other managers as they are performing multiple jobs. Therefore the aim of this report is to highlight how the corporate world has evolved over the years; how it demands changes in the role of management accountant and what are the factors that have contributed to these changed roles. Factors influencing change in role of management accountants As the business world changes so have the roles of professionals that are involved in it however some are the factors that have necessitated the changes in the roles of management accountant they are discussed as follows: Technology A very rapid technological development is witnessed, use of computers and accounting and analytical software allows the management to keep record, provide information, issue reports and even perform analysis. These advanced software and ease in access to the internet management accountant to perform more sophisticated analysis and decision support activities. These software are often automated they just require data entry and have made accounting departments more of an information providers rather participators in the decision making. Therefore this advancement in technology requires the management accountant to modify their roles and gain some extra skills. Increase in competition Business world has seen exceptional rise in competition different strategies and steps are taken to respond and sustain in the market. The major focus of the organizations has been on increasing the production and quality of the products and services that they provide. This shift in priorities brought in the concept of re-engineering and this led to the downsizing that was and is seen as major cost reducing technique in the organizations. Financial and management accountants are seen as the non-productive departments and the personnel who are unwilling or unable to switch their focus from historical based data gathering activities and evolve in to the future oriented methods that require the element of decision making have threat of higher level. Adaptability has become a necessary part of survival not only for the management accountants but every professional. It is not that competition has increased the threats for the management accountants it has also brought in many opportunities. It is not that they are seen as non-productive but there importance has also increased as information is of essence in today’s world and management accountant possesses that (Gudrun, John, Hanne, & Robert, Risk Manager of Risque Manager? The new platform for the management accountant, 2010). Cost management techniques can be completely detached from the reporting system however these skills have become of great importance for the accurate or the optimum decision making by the management. It is the fact that cost management and management accounting are not the similar field of expertise however they can be integrated. Emerging professional fields and increase in professional knowledge The awareness towards the education and professional development has increased. Every individual who desires to be the part of the corporate world understands the fact that he must acquire professional knowledge and expertise in order to sustain and grow in the corporate world. It is due to this high competition of survival that even the line manager acquires and applies the knowledge of accounting. Therefore his role can be compared to that of the management accountant as on the basis of the knowledge they are often not differentiated. It is due to the conflict of roles that have arisen in the corporates regarding the functions to be performed. Line managers interpret the information that management accountant are required to provide therefore in order to justify their position traditional management accountant activities are not sufficient enough. Line managers are found giving suggestions to the management and judging the information provided by the management accountants therefore a conflict in the roles arise that creates the threat for the management accountants and requires drastic changes in their role that they perform within the organization that they are the part of (Debra & Jeff, 2014). Changed role of management accountants Corporate world has changes thus in order to survive corporates have changes their policies, strategies and even structures. One of the examples can be taken of globalization that has increased the exposure and pressure over the management and besides the challenges has also brought upon the opportunities for growth. Corporates are run by the individuals or professionals that make decisions and policies that reflect to be the agenda of the organizations thus it can be said that if the changing business environment requires organizations to change and evolve the same is demanded of the professionals and the personnel responsible for their management (Emanuel, 2007). Management accountants have been important member of the organizations however above discussion discloses the factors that require more from them besides the traditional computing and recording. Information technology has made the recording easier and it is the over awareness regarding the professionalism that doesn’t make the academic knowledge of the management accountants unique (Richard, 2012). The modification of the role, enhancement of the skills and integration of the activities has become a necessity for the management accountants not only to become successful but also to survive in their respective organization. Following are the changes roles and the recommendations for adaption that would ensure the survival of the management accountants (Alnoor & Michael, 2009). Information technology, its adaption and social interaction Information technology has impacted every aspect of the life it is not only corporates or management accountants that can complain. IT has eased the work and the processes however the professions that have integrated itself to the changes that it offers have and would become obsolete. Example of the Enterprise Resource Planning (ERP) can be taken all the management accounting techniques like budgetary control, cost control, sales analysis, profit analysis, variance analysis etc. are performed over the ERP (SEVERIN, STEWART, & ALAN, 2009). It offers more efficient and sophisticated solutions therefore it has become necessary for the organizations to integrate its processes with the ERP. It has not limited the role of management accountants to data entry but changed it to more involvement in the business designing and strategy making thus they are required to become more IT sawy and transform their positions in the corporate world. The integration of the IT or the ERP can be taken to the benefit by the management accountants. It is obvious that ERP has made information more efficient, accurate and effective thus this allows better decision making it is up to Mas how they evolve themselves to this new role of business structuring and designing. Management accountant today are not just bound to the confines of the office they along with some other personnel are also required to be social and interactive in order to acquire knowledge other than that relating to their profession so as they are able to make better consumer oriented decisions. It is the customer satisfaction that is the center of focus today and any management decision that dissatisfies that cannot be regarded as to be perfect. Conclusion With the changing corporate environment there are numerous activities that needed to be accounted for the management accountants. With the advancements in the information technology the role of the management accountants is changed significantly as they need to get out of the traditional costing and needed to corporate latest costing techniques which are much more enhanced and effective. The role of the management accountants is changed as the corporate environment evolve. The advancements in the businesses needed to be accounted for and the management accountant should familiarize new and enhanced costing techniques along with planning so as to better perform in the modern corporate world. With the advancements in the businesses should be considered and techniques should be revived so as to provide better performance. Management accountants are not restricted to the cost management but they are now considered as the professionals who could better estimate and analyze information regarding cost and can provide enhanced and reliable predictions of the factors affecting cost. With the perceptions regarding management accountants changed the role of the management accountants changed accordingly and thus they should comply with the advancements and should satisfy the required professional duties. References Alnoor, B., & Michael, B. (2009). The changing role of management accounting. accountingweb, 1-10. Debra, K., & Jeff, R. (2014). Whats Ahead For Management Accountants? New Accountant, 1-9. Emanuel, R. (2007). Improving decision making in organisations: the opportunity to reinvent finance business partners. Improving decision making in organisations, 1-48. Gudrun, B., John, B., Hanne, N., & Robert, S. (2010). Professional accounting media:accountants handing over control to the system. Professional Accounting Media, 395-414. Gudrun, B., John, B., Hanne, N., & Robert, S. (2010). Risk Manager of Risque Manager? The new platform for the management accountant. Research Executive Summaries Series , 1-8. Richard, C. (2012). The Changing Role of the Management Accountant – Pierce and Byrne’s Concerns. Accounting Research Blog, 1-12. SEVERIN, G., STEWART, L., & ALAN, S. (2009). Management accountants: a profession dramatically changed by ERP systems. changed by ERP systems., 1-9. Read More