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The changing role of management accounting
The changing role of management accounting
The changing role of management accounting
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Introduction
In a report produced by Chartered Institute of Management Accountants (CIMA), it delivered a message that, under the influence of the financial crisis and the advanced development of information technology (IT), the remaining core difference to stand out a business lies in the decision-making function. This explains the trend of management accountants (MA) turning into a more advisory role (Burns, Quinn, Warren, Oliveira, 2013), or saying the emergence of business partner. Business partner, a role that supports the decision making process with their analytical skills, is evolved from the traditional MA, usually being stereotyped as ‘bean counter’ or ‘scorekeeper’ (Friedman and Lyne, 2007). Some scholars claimed that the emergence of business partner will change the role of MA yet some argued the role of MA has not changed much. The objective of this paper is to critically appraise the changing roles of management accountants. The cause of the change will be examined followed by evaluating the changes, and lastly the future of management accountants will be discussed.
Changing Business Environment
When the business environment changed, the need and content of accounting information would change, and hence affecting the nature of the role of MA. There are two main factors that have changed the business environment, the financial crisis and IT development.
The outburst of financial crisis changed the direction of most of the business and reshaped the importance of management information. ‘Never waste a crisis’ (Henry, 2012) because it is ‘an opportunity to do important things that you would otherwise avoid’ (Emanuel, 2008). After the 08/09 financial crisis, global businesses therefore took the chance to reflect on thei...
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...ner has to be able to ‘simplify complex situations’ (Coldbert, 2009). Therefore, no matter which level of business partner a MA is pursuing, he/she has to be able to communicate and incorporate the management information in a simple way, making non-finance people to easily understand.
Conclusion
The role of MA has experienced a radical change over the past few decades, causing by the outburst of financial crisis and advance IT development, requiring MA to add value to management information. There is a hybrid role of MA, becoming a business partner, yet it does not mean the traditional role of MA is less important than the advisory role. The role has mainly changed from bean counting to providing consulting on management information. With the development of the world, MA should keep improving themselves in pursuing the goal of most of the business, value creation.
Along with the rapid development of economy and society, the companies have to own skills to adapt, cater, and transfer new knowledge, and try to modify their activities to reflect insights. Strategic management evolves
On the surface, the seven-member MGI team which comprised of Henry Tam and Dana Soiman – both current HBS MBA Students, Alex Sartakov – a Berklee College of Music student, Dav Clar – a MIT graduate student, and Alexander (Sasha) Gimpelson, Igor Tkachenko, and Roman Yakub – the MGI founders, seems like an ideal team, with each member bringing different experiences and technical skills to help with the business plan contest at HBS. However, as we will see in this paper, interpersonal dynamics, a lack of clear leadership, resulting in unclear team goals and individual roles, and a lack of healthy group norms, contribute to an ineffective team process at MGI. With the deadline less than three weeks away and the team without even a first draft of the business plan, Henry is certain that the team would not meet the deadline if it continued to function as it had so far.
Olusegun Wallace, R. 1996. The Development of Accounting Research in the UK. In: Cooke, T. and Nobes, C. eds. 1997. The Development of Accounting in an International Context. London: Routledge, pp. 218-254.
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