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strategic management accounting - Essay Example
Finance & Accounting
Pages 3 (753 words)
Name: Tutor: Course: Date: University: Role of Strategic management Accounting Management accounting 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. However, management accounting has for a long time since its introduction in accounting faced various shortcomings hence making it unable to perform this function effectively…
It is hoped that, as a new discipline in accounting, strategic management, will be very resourceful to accountants and managers, and that it will improve the relevance of the accounting profession in areas such as strategic thinking and the qualitative features of management (Shah, Muhammad & Malik 2011, p.1). 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. ...