• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Discuss and critically evaluate the role of management accountants in providing relevant information to managers to manage strategies effectively.

Extracts from this document...

Introduction

TABLE OF CONTENT 1.0 Executive Summary 3 2.0 Introduction to Management Accounting 4 2.1 Concepts of Modern Management Accounting Techniques 5 3.0 Modern Management Accounting Techniques 3.1 Activity-Based Costing 3.1.1 Background and Development 6 3.1.2 Strategic Benefits 7 3.1.3 Limitations 8 3.1.4 Conclusion 8 3.2 Just-In-Time 3.2.1 Background and Development 9 3.2.2 Strategic Benefits 10 3.2.3 Limitation 10 3.2.4 Conclusion 11 3.3 Total Quality Management 3.3.1 Background and Development 12 3.3.2 Strategic Benefits 13 3.3.3 Limitations 13 3.3.4 Conclusion 13 4.0 Conclusion 14 5.0 Bibliography 15-16 ASSIGNMENT TOPIC Top Managers are increasingly and intensely focusing on strategic directions and trying to manage organizations to gain and sustain competitive advantage. Discuss and critically evaluate the role of management accountants in providing relevant information to managers to manage strategies effectively. EXECUTIVE SUMMARY The core purpose of this report is to introducing to management accounting, modern management accounting techniques, as well as formulates strategic directions to manage, to gain and sustain competitive advantages. Hence, coming along in the report, we would describe and explain the different modern management accounting techniques such as activity based costing, just in time and total quantity management. By which, in doing so, the organizations would immediately evaluate the impact on change through the strategic directions and benefits. Often, the role of management accountants entail providing relevant and reliable information about the sources of competitive advantages for example the cost, productivity and etc. Management accountants analysis and evaluate records submit by the bookkeepers as a result to investigate any losses, leakages or changes in value. That is, this role requires the management accountants to consider several alternatives and then decide which one is the best. To the same degree management accountants requires knowledge and expertise in system design, change management, strategic to cost management and much more. Importantly, under IMA's overarching a practitioner of management accountants shall behave ethically and shall act in accordance with these principles which include honestly, fairness, objectivity, and responsibility. ...read more.

Middle

Some overhead costs are difficult to assign even happen in ABC method as an overhead costs such as the directors' salary. These costs refined as business sustaining and do not mean to assigned to department because there is no meaningful method by doing so. If do so, the allocation might eventually result in inaccurate cost estimation and causes wrong decisions. CONCLUSION In general, ABC has more advantages than limitations. When implemented properly, ABC can bring about constructive changes in financial control systems of an organization. However, there is no such thing as the best costing method in an organization. There is only the most suitable costing method. As such, the management should evaluate the pros and cons of each of the costing method to identify the most appropriate costing method for their organization JUST-IN-TIME BACKGROUND AND DEVELOPMENT JIT (Just-in-Time) is a production strategy that aims to reduce in-process inventory and its carrying costs. JIT production method is also well known as the Toyota Production System. For essential, Toyota manufacturing plants was first introduced and devleped by Taiichi Ohno and as a goal of meeting consumer demands with minimum delays. Taiichi Ohno is also well known as the father of JIT. The success of Toyota during the 1973 oil crisis has attracted the interest among Japanese firms as well as Western companies (Hallihan, 1997). In late 1970s, US manufacturers have widely adopted JIT concept to improve their performance and regain their competitive edge (Ansari, 1984; Celley, 1986; Im, 1989) The philosophy of JIT is simple: inventory is waste. Inventory is seen as incurring costs, or waste, instead of adding and storing value, contrary to traditional accounting. Best described JIT is an approach and practice with the objective right part in the right place at the right time. The philosophy requires all resources be acquired and used only as needed. It has most profound effects on manufacturing companies, which maintain three classes of inventories i.e. ...read more.

Conclusion

Without gaining support, failure of implementation may become an issue and make disappoint to organizations after spending bulk of money. Secondly, educating and training employees in new accounting systems throughout the organizations allow workers use their knowledge to make better improvements. The results are dramatic because employees are empowered and motivated to implement such as cost-saving projects, quality ensures and etc. However, too often, managers and management accountants seek big result and major changes too quickly. In most situations, achieving a significant change overnight is difficult. Therefore, managers and management accountants should seek small short-run success as proof that the implementation is results. In conclusion, mangers and management accountants must recognize that implementation of new accounting techniques is not perfect and it's have their own limitations in each models. For essential, open and honest communication to all levels ensure that managers and management accountants use the new techniques thoughtfully to make good decisions and most importantly to gain and sustain competitive advantages. BIBLIOGRAPHY 1. Chaeles T. Horngren, Srikan M. Datar, Madhav V. Rajan, Cost Accounting, 14th Edition, Pearson Education Limited, England. 2. T. C. Edwin Cheng, Susan Podolsky, P. Jarvis, Just in Time Manufacturing, an introduction, 2nd Edition, Published by Chapman & Hall, UK.. 3. Marshall Sashkin, Kenneth J. Kiser, Putting TQM to work, Berrett-Koehler Publishers,Inc, CA. 4. Wikipedia.com, Activity-based-costing, Retrieved 20th June, from http://en.wikipedia.org/wiki/Activity-based_costing 5. Thomas & Alex, Financial Management Services, Activity Based Cost Management, Retrieved 20th June, from http://www.thomasandalex.com/articles/finance-accounting/activity-based-costing-2/ 6. Thomas & Alex, Financial Management Services, Activity Based Cost Management, Retrieved 20th June, from http://www.thomasandalex.com/articles/finance-accounting/activity-based-costing-2/ 7. Michael S.C.Tse, Maleen Z.Gong, Innes, 2000; (Kaplan R.S., 2004: Cohen, 2005) Recognition of Idle Resources in Time-Driven Activity-Based Costing and Resource Consumption Accounting Models. Journal of Applied Management Accounting Research, JAMAR, Vol.7 2nd Nov 2009. 8. Adam S. Maiga, Surendra P. Agrawal, (Ansari, 1984; Celley, 1986; Im, 1989) Impart of the Extent of Management Initiatives on Manufacturing Plan Profitabilit, an Exploratory Investigation. Journal of Applied Management Accounting Research, JAMAR, Vol.1 2nd Nov 2003. 9. Accounting Coach, Activity-Based Costing, Retrieve 20th June, from http://www.accountingcoach.com/online-accounting-course/35Xpg01.html 10. Management and Leadership, ABC, Retrieve 21st June, from http://www.emblemsvag.com/abc. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree Accounting section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree Accounting essays

  1. Contemporary issues in management accounting - Target costing,Life cycle costing andQuality ...

    Target costing was applied to all product development efforts in the company including the NEON, a new small car developed for the lower price range. A price and profit target was set for the car and it was then designed to meet that profit without sacrificing major customer requirements which

  2. An Analysis Of harmonization issues of accounting standards

    Hence, China should do the efforts to improve the situation and to go for conceptual framework regard to the basic standards and try to set its own CAS Conceptual Framework as soon as it can. After which, CAS can become more consistence also internally as well, in the line of international practice.

  1. Management accounting: Wilkerson Company is in the business of manufacturing valves, pumps, flow controllers ...

    the industry to sustain the market position whereas in case of flow controllers the company is already operating at a negative gross margin and needs to increase the price if the product is to provide sustainable profits. Shortcomings of Analysis We have assumed average unit cost for individual flow controllers.

  2. This report aims to provide sufficient financial evidence into the performance of Easyjet in ...

    The one figure which no airline can take action against through financial planning is that of jet fuel prices. As fuel becomes more scarce and global warming becomes more prevalent, fuel prices will inevitably increase. Easyjet have however made plans to cut CO2 emissions by 50% by designing and building their own type plane dubbed the 'Ecojet' http://www.easyjet.com/en/news/easyjet_ecojet.html, (2008).

  1. Working Capital Management

    The management of receivables is basically a problem of balancing profitability and liquidity. Soft credit terms are attractive for higher sales and hence longer the time a company allows its customers to pay, the higher are the sales and hence profits.

  2. ABC Costing Vs Traditional costing

    Firms can then begin to control their costs based on tangible activities rather than relatively uninformative general ledger or cost centre reports. Stevenson & Barnes (1996) stated that ABC can more realistically model the cost structure facing businesses today. As agreed by many other authors, ABC is highly accredited to

  1. Critical Review on The Demand for and Supply of Accounting Theories: The Market for ...

    3.2.2 The Validity of Assumptions The theory was demonstrated in Watts and Zimmerman?s study in 1979 as follows: ??The government regulation creates incentives for individuals to lobby on proposed accounting procedures, and accounting theories are useful justifications in the political lobbying.?? This theory was accomplished by the critical assumption that

  2. The topic I have chosen is the Business and financial analysis of a company ...

    Tesco has also introduced a contactless Clubcard app for the iPhone. Leading Market position in UK-Tesco has strong market position in local markets .The Kantar World panel data, formerly known as TNS, shows Tesco's market share climbed from 30.4% to 30.5% in the 12 weeks to 24 January compared to the same period a year ago.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work