Evolving role of Management Accounting
Managerial accounting is the process of identifying, measuring, analyzing, interpreting, and communicating information in pursuit of an organization’s goals. Managerial accounting is an integral part of the management process, and managerial accountants are important strategic partners in an organization’s management team. The relation between accounting and management has been commonly expressed by the phrase, “Accounting is a tool of management”. Accounting practice has developed in response to a changing business economy. In view of these changes, effects have been made to clarify, redefine, and seek acceptance. The role of managerial accounting is very different now than it was even a decade ago. In the past, managerial accountants operated in a strictly staff capacity, usually physically separated from the managers for whom they provided reports and information. Nowadays, managerial accountants serve as internal business consultants, working side-by-side in cross-functional teams with managers from all areas of the organization. Managerial accountants have traditionally been thought of as the bean counters or number crunchers in an organization. However, advances in accounting information systems and other changes in the past five or ten years have resulted in the automation of traditional accounting functions involving data collection, data entry and data reporting and a corresponding shifting of those functions from management accounting to clerical staff. Managerial accountants in many companies now focus on analyzing information and creating knowledge form that information rather than collecting data. Managerial accountants have become decision-support specialists who see their role as interpreting information, putting it into a useful format for other managers, and facilitating management decision-making Rather than isolate managerial accountants in a separate accounting department, companies now tend to...
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