Role of Strategic Management Accounting - Essay Example

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Role of Strategic Management Accounting

Strategic management accounting (SMA) has been introduced as a field of study in the accounting profession. The core purpose of introducing SMA is to advance on the usual management accounting by giving it a wider scope. The introduction of SMA was due to numerous requests on the improvement of MA. SMA centers on the internal financial information of the business as well as the external facet of the business operation. Compared to management accounting, SMA focuses more on comparing the business with the competitors, which helps the managers to be more vigilant based on how the competitor is conducting business (Shah, Muhammad & Malik 2011, p.1)The management learns business techniques from competitors and makes appropriate decision. The ability of SMA to include non-financial features of business in decision making is a major breakthrough in accounting. In a nutshell SMA plays vital roles in business management such as collecting information that is related to the competing business. It is also used in helping the accountant and the management make a strategic decision that relates to the business. Also, SMA help in cost cutting measures based on strategic decisions by the management, and finally, Strategic business management, is resourceful in helping the business gain competitive advantage over the rival businesses. In performing the above roles, authors of strategic business management have been encouraging accountants to use analytical tools developed and used in the area of strategy. ...Show more

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In the paper “Role of Strategic Management Accounting” the author analyzes the role of management accounting which should be an effective and efficient tool used by managers and accountants at all levels in assisting them make decisions in their area of management.

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