STRATEGIC MANAGEMENT ACOUNTING

Strategic Management Accounting



Strategic Management Accounting

Comprehensive Analysis of the Strategic Management Accounting

The importance of Strategic Management Accounting is very high for most of the organizations. There are certain aspects of the Strategic Management Accounting that would be discussed in detail in the topic. Accountants occupy vital positions in global industry and commerce. Accountants have many fields of expertise, from financial to management accounting and other specialized areas such as taxation, audit, systems, finance, and comptrollership. Accountants work in public practice and large and small organizations in a wide array of profit and non-profit oriented sectors ranging from industry, government, co-operatives, charities, and other non- government agencies (Collier, 2009).

They provide essential financial, assurance, and advisory services to a broad range of stakeholders. Accounting professionals touch almost everyone in society. Most professional accounting associations are long-established and have strict codes of conduct and ethical standards required of their members and students. Objectivity, trust, and fiduciary duty to the public are essential attributes for accounting professionals. The accounting function is often characterized into two main fields: financial accounting and management accounting. While the fields share a common purpose, that is, to provide information that is useful to decision makers, the fields differ in terms of intended purpose, focus, and audience for information; the information's content, its flexibility and constraints; the skill sets, tools, and practices in use by professionals based on their educational focus and normative frameworks and, the behavioural implications of their work. All the concepts have a strong relation with the Strategic Management Accounting and they are utilized by the organizations in the best possible manner. Therefore, the role of Strategic Management Accountants in this field will be discussed in detail (Gosselin & Bauwen, 2006, 385).

Recent Developments in Strategic Management Accounting

Management accounting focuses on internal parties within an organization, such as management and other internal stakeholders. Management accounting supports an organization's forward-looking management decisions, with the goal of fulfilling the organization's strategic objectives. Management accounting measures, analyzes, and reports both financial and non-financial information and will incorporate information considered relevant for specific purposes or varying scenarios. It may be highly summarized or detailed, and its timeframe may range from hourly to life cycle analysis. Measures and reports do not need to follow GAAP, because the information is used for internal decision-making purposes. Management accounting utilizes flexible, yet rigorous, decision-support models, tools, and practices to meet the needs of internal decision-makers and managers (Langfield-Smith, 2008, 228).

The management accounting function supports all aspects of the management cycle of plan-do-check-act made popular by W. Edwards Deming, including the function's activities of: supporting strategy development and implementation/measurement frameworks, planning and budgeting, information and data capture, decision support and investment appraisal (e.g. products, services, projects, initiatives, or capital asset acquisition), costing and pricing, internal accounting and allocation of costs, forecasts and modeling, performance management, and internal reporting, evaluation, and accountability. The management accounting function is an integral system supporting the information flows, decision making, and accountability within organizations fulfilling a ...