Management Accounting Essay

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Introduction

In the last decade, there was a widely on-going debate on whether the roles or the expectations of management accountants have changed (Burns and Baldvinsdottir, 2007). Professional accounting bodies all over the world have conducted researches on the changed in management accounting by interviewing businesses in their countries (Forsaith, D., Tilt, C. and Xydias, M.L. 2004). Before discussing in depth, we need to first define what the basic functions of management accountants are.

In the past, management accountants were required to provide information. They functioned as support staff, providing timely and understandable information to business managers at a certain quality. However, in recent days, according to the Chartered Institute of Management Accountants (CIMA), a chartered management accountants need to perform the following functions including "advising managers about the financial implications of projects, explaining the function consequences of business decisions and formulating business strategy (CIMA website)." Their role has evolved from serving internal customers into a business partner (Siegel and Sorenson, 1999). Nowadays, management accountants have taken up more responsibility in day-to-day, strategic and short-term decision making, which means they are empowered and have a say in the team. Management accountants will analyse the information and decide whether and why that particular types of information is relevant to the business plan, as well as suggestion for improving the quality of the decision.

Arguments in favour of the changing role

The most common change factors cited in the literature are, the adoption of new tools and techniques which potentially enhance accounting practices, ...

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...o become an all-rounded business manager. With the increase in global competition in accounting services, management accountants need to change themselves in order to fit in the fast growing business world. Today, it is more important for accountants to develop their personal skills rather than technical skills: management accountants need skill in communication, strategy, decision-making and adaptability. It seems that there is a need for more emphasis on the management than the accounting area.

As Byrne and Pierce (2007) have highlighted, such a transition is not as straightforward as anticipated and in order to fulfil this role, the management accountant must overcome considerable challenges and conflicts. Therefore, it cannot be argue that the roles of management accountants is not changing but it is appropriate to say that the role changing is in a slow pace.

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