The Threats to the Relevance of Management Accountants in Today’s Business. Essay Example
THE THREATS TO THE RELEVANCE OF MANAGEMENT ACCOUNTANTS IN TODAY’S BUSINESS.
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
4. Inadequate training
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There is a saying that “if you are not updated you will be outdated” one of the problem confronting the relevance of a management accountant is the lack of statistical information.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
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
4. Inadequate training
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There is a saying that “if you are not updated you will be outdated” one of the problem confronting the relevance of a management accountant is the lack of statistical information.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