The management accountant is faced with a lot of threats which are further highlighted below: 1.Problem of information
2.Lack of required managerial skill
3.Use of obsolete technological know how
5.Problem of uncontrollable cost
6.Problem of Cost allocation
7.Low Salary Scale/Remuneration
1.Problem of lack of information
There is a saying that “if you are not updated you will be outdated” one of the problem confronting the relevance of a management accountant is the lack of statistical information. A management accountant needs to be highly updated on market statistics to be able to bargain for good price at a lower cost, making qualitative requisitions at a more affordable price in order to increase the profitability of the organization. Once the management accountant lacks the access to first hand information he begins to become highly irrelevant in the organization. So to be more effective he needs to equip himself with the necessary tools to enable him to be ahead of his competitors.
2.Lack of required managerial skills
It has been observed that some managers in the position of authority lack the essential managerial skills required of such positions. A good manager must be versed in accounting/cost accounting principles. He must be able to distinguish between relevant and irrelevant cost, he must be able to distinguish between actual and budgeted items of cost as well as determine or simply forecast the profit to be made as compared to previous year’s statistics. Lack of the required managerial skill is a great threat to the relevance of the management accountant in today’s business world as it will limit his/her delivery skill as well as cause a jeopardy towards the growth of the organization, once this is noticed, such managements would be replaced and new persons brought in to take up such vital position.
3.Use of Obsolete technological know how
The use of obsolete technology is a great threat to the relevance of a management accountant, this hinders or jeopardize the work of the management accountant in delivering his report as at when due. The introduction of new technology has made work easier and faster to carry out thereby increasing productivity at a reduced cost, the introduction of new machines that aids the just-in-time technique(JIT) as well as the Advanced machine technique which are all management techniques that aid high production yield. Without these techniques, the work of the management accountant will be irrelevant as the need to be more knowledgeable in this area is highly relevant. The management account is threatened by the use of outdated technology which may be of jeopardy to effective growth of the organization.
One of the threats to the relevance of management accountant is inadequate training on the part of the manager, he needs to be updated on managerial skills, be able to identify and analyse cost and costing techniques, be able to make sound calculation and must be a member of the institute of chartered accountants of Nigeria. Lack of adequate training will always have a negative implication on the management accountant, thereby making him irrelevant in his line of duty, jeopardizing production, increase in his inefficiency will bring about a great loss to the organization, thereby leading to low productivity and loss of property to the organization.
5.Problem of uncontrollable cost
The problem of uncontrollable cost is also one of the factors or threats to the relevance of management accountant. There are some cost which can not be controlled by the management accountant, this can either be loss of sales due to general change in consumer demand, natural disasters thereby leading to hike in prices of goods and services, fixed price of goods and services from the central offices, taxes and other indirect taxes. These...