The Role of Management Accounting

This article speaks broadly of how the traditional role of management accounting is diminishing. It conveys the idea that although it's changing in order to adapt to the evolving business environment, it's converting into an indispensable element of a company. It explains that management accountants are using information to become more strategists, whilst increasingly using more non-financial information to drive performance.

The author argues that one of the main characteristics of management accounting information that is changing is the outsourcing of the transactional side, and more emphasis is placed on the advisory component of management accountancy. (Richard Mallet, Director of technical development, CIMA) This is primarily due to advances in technology that relieve management accountants from large amounts of information processing. In turn this allows them to dedicate more time for analysis and insight to establish better strategic decisions. This is useful as there is fierce market competition and better strategies to achieve better-formed advice.

"It's hard to detect trends from walls of figures," states Mr Bittlestone (chairman and director of consultancy Metapraxis), claiming that utilising non-financial information does not simply help non-accountant managers to understand, but permits the company to tailor it's systems and track it's performance as it provides good leading indicators. Performance deterioration would be sooner noticed using a combination visual skill and figures. Tesco and Unilever are benefiting from using this approach.

This article is relavant and reliable (as it comes from a well respected newspaper and is fairly recent 2009) as it demonstrates that management accounting is adapting to the modern world.

http://www.ft.com/cms/s/1/1a0a00d8-a52c-11da-bf34-0000779e2340.html#axzz1f8QHIx8Q