According to the authors, there been advances in information technology in last two decades. One of these forward movements is the progress of data-base technologies which supply the capacity to store a huge amount of information in accessible ways. Furthermore, the current database can analyse information in different ways. Information system that meets the needs of the various users can be easily designed. In addition, the managers and most of people in the organisation have PCs on their own desks. They use them to access the information they need.
A result of these technological developments for management accounting is what has been called elsewhere, the decentring of accounting knowledge. Financial information for instance, budgets, variances and actuals are all now available at several levels in many organisations. Accounting information is in companies which have not installed one of the new integrated information systems. That means, inside each part of a business there is a need for a person who understand accounting information. What has been seen during the study was there were people called “pseudo-accountants” who have accounting knowledge. Therefore, the number of people who have accounting knowledge in each department has increased. This decentring of accounting knowledge is the consequence of “pseudo-accountants” who educate other people in the organisation.
The writers note that in several companies the management accountant would be notionally a member of the centralized accounting function but out in the field. These accountants were esteemed as important because of there links to the centralized accounting function which means that these accountants’ knowledge of interactions with other parts of the business. Essentially, management accountants could look outwards from a specific area of activity to the business more generally.
From the companies which the writers have visited a further issue that appeared, the role of the budgets has changed. The budgets are being seen as foreword. Management accountants can forecast the next financial period from the current budget. This is especially important because whereas accountants usually associate with budgets, managers identify from forecasts. Forecasts usually need significant inputs from signals department and functions, as they are the only people who have the essential detailed knowledge.
Additional finding from the project is the change from what may be designated a “financial accounting mentality” to “commercial orientation”. Commercial orientation defines that it is the business capacity to continue to earn profits in future periods rather than looking to earn a profits in the current period. This hints a strategic observe and managing the capacity to generate profits.
In many companies which the researchers visited during the study, there are strategies are being used a range of performance indicators in most companies. These companies have more strategic focus guiding to the use of a variety of using non-financial measures of performance such as customer satisfaction. Management accountants are required an extensive understanding of business and it operations. As a result of that management accountants have to bring wide view of the business expressed in the performance indicators which one of management accountants responsibilities.
Many companies became able to run without having accountants who have pure accounting qualification. The authors outlined that as changing nature of the role of management accounting, they explored possible entailments for accountants and the professional accounting bodies. A commencing point, it can be stated that there are both opportunities and threats. In one suit survey, a Britain based manufacturer of health care merchandises, the number of workers in the accounting function declined in the period of time 1990 to 97 from great hundred to 60. Such reductions are largely an effect of advances in info engineering.
The role of Management accounting has changed since "hybrid" emerged accountants in most organisations who has many qualities such as, Willing and be able to be team member, broad performance/interpretation skills, integration of different understandings and proactive in strategic matters. “A hybrid accountant is someone who has both accounting knowledge and an in depth understanding of the operating functions or commercial processes of the business”. The organisations had changed from a functionally organised business to a process based descriptor of organisation. If possible each land site was responsible for the whole its actions from the receipt of an order to bringing of the final product and whereby, each unit. Under this new structure there is a process leader who is for all these activities, together with the associated back up functions which are an integral component part of the process.
The writers have seen various examples in their case studies. At one extreme there were accountants, who were superior at producing and analysing the figures, but they could not associate them to the commerce, and consequently they were not kept in possession. In particular, management accountants need to associate the accounting and financial info to the wider info flowing within the organisation, including strategic info, and to identify the limitations and the potential of management accounting.
the writers started with issue which has been claimed by Kaplan and Jonson that management accounting had lost relevance, which the tool that the managers use to make decision. The writers indicated the emergence of hybrid accountants which have developed the organisations. They are to team member in department and educate the others financial issues. One more issue the study has found that organisations provide continuing education activities which preparing their future and current members for changing role of management accounting.
Reference
Burns, John and Scapens, Robert. (2000). The Changing Nature of Management Accounting and the Emergence of “HYBRID” Accountants. Available: http://press.ifac.org/article/2000/11/the-changing-nature-of-management-accounting-and-the-emergence-of-hybrid-accountants. Last accessed 05 AUG 2010.
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