Management Accounting Practice Samples †MyAssignmenthelp.com

Questions: Q1: Explore and discuss the rationales, strategic as well as tactical and operational, behind the management shift towards a flow and process oriented view and its influence on todays MA-practice? Q2: Can MA be strategic? Why or Why not? Exemplify by using some area within MA such as costing, budgeting/prognosis/planning, PMS. Answers: 1.The management has shift towards a flow and process oriented view due to operational, strategic and tactical ways that have had great influence on contemporary management accounting practice. Rationales Business process assist the organization to realize their individual organizational objectives to allow management to review as well as realign as market changes, customer needs alters, product alters and strategies alter. The general changing nature of business demands novel growth is due to changing legislation, market saturation and global competition. In absence of process-oriented organization, workers will stomp out fires, miss on opportunities and waste time as well as money due to poor planning and absence of vision. Strategic The shift has been occasioned by the need to evaluate the external information about trends in cost, market share, cash flow, and prices and corresponding impacts on resource to allow the company determine the most promising tactical responses. This is because contemporary business can only survive when they incorporate strategic aspect of MA which call for enhanced intelligence regarding suppliers, technologies and competitors. Strategically, SMA is used by strategic management in the identification, development, formulation, implementation, and evaluation of strategic alternatives that move the organization forward (Kohlbacher and Reijers 2013). Tactical The tactical reason behind the shift is that contemporary will only survive when they tactically plan. Through tactical planning, the business can track its daily actions whose results shall move the company forward to accomplish the objectives of the business highlighted in the strategic plan. Thus tactical reason behind the shift is to provide the how aspect of strategic planning. Operational The operational reason behind the shift is that process-oriented allow the company to be successful by focusing on its customers. This is done by involving leadership and focusing on improving workers as well as business processes. Senior managers are engaged rather than merely delegating training to junior managers. Influence on MA The shift towards flow and process-oriented has had great influence on contemporary MA. It has helped merged the strategic business objectives with management accounting information thereby providing a forward looking model to help management in making business decisions. As opposed to MA that merely focus on internal accounting metrics, the flow and process-oriented has converted MA into SMA that has helped evaluate external info about costs, prices, cash flow, and market share alongside their influence on resources in determining appropriate tactical responses. The only pros about this shift is that the business will have restructure which might consume huge costs. 2. Management Accounting can be strategic. This can be exemplified by using planning area within management accounting. A management accountant can support the strategic planning of a company. Skilled management accountant will help the corporate leaders by conducting long range planning and decision making activities anchored on qualitative data. The managerial and cost accounting accountants will help to support the firm in strategic planning by generating strategic roadmaps, high level plans as well as policies with info drawn from the financial data of a company. The Management Accountant role in strategic planning in a company is extremely significant that these professionals are always referred to as strategic business partners within their respective organizations. They support long-term corporate planning efforts in a number of ways. Profitability Goal Setting: Managerial Accountants gather the right type of data, analyze it and translate it into information which senior decision makers require in establishing long range profitability goals. Managerial accountants thus provide senior leaders with financial information that permit them to reevaluate the pricing strategies of their products and assess their agreements among the distribution channel partners for the profit optimization. Acquisition Strategy Creation The managerial accountants provide the required financial information that supports the decisions which assist the firm to reach its high level goals as outlined in mission and vision statement that are the foundation for its plans and operations for healthy growth. Such an information provided by Managerial Accountants is used regularly to create acquisition strategies (Sikdar and Payyazhi 2014). Such strategies are then utilized in the identification of ways to reduce costs via consolidation as well as divestiture thus promoting the value creation for an organization investors by selecting business purchases. Corporate executives always have to consult before settling on any acquisition strategy with managerial accountants to determine whether the long-term results of their pending acquisition actions shall generated the desired improvement on performance. Risk Management and Controls Support Managerial Accountants helps business to monitor status and health of its activities by establishing mechanisms for risk management processes and control. A companys risk management function would hugely be reliant on subjective data without managerial accountant. Managerial accountant help leaders realize that they have to quantify objectives of risk management to make measurable and relevant by providing leaders the financial information which support this function (Fullerton, Kennedy and Widener, 2014). The managerial accountants also provide the company with financial information which contribute to the estimation of severity of impact to a given business unit/enterprise for risk identified. References Fullerton, R.R., Kennedy, F.A. and Widener, S.K., 2014. Lean manufacturing and firm performance: The incremental contribution of lean management accounting practices. Journal of Operations Management, 32(7), pp.414-428. Kohlbacher, M. and Reijers, H.A., 2013. The effects of process-oriented organizational design on firm performance. Business Process Management Journal, 19(2), pp.245-262. Sikdar, A. and Payyazhi, J., 2014. A process model of managing organizational change during business process redesign. Business Process Management Journal, 20(6), pp.971-998.