A Changing Practise Of Management Accounting
Over the last two decades, a new business culture has emerged and has had an impact on many organisations and their employees. The rapid transformation of the business environment which includes intense global competition, changes in cost structure, and advances in information technology, has had a profound effect on the practise of management accounting by creating more opportunities for management accountants. Of these changes, information technology seems to be the most important factor that has helped managers become more proactive and gain competitive advantages from competitors who were ignoring it. However, information technology has not only created opportunities but it has also increased pressures on management accountants because they faced new challenging and complex tasks. This essay explores how information technology encouraged changes in management accounting by looking at the role of management accounting, the need for information, the rate of change in technology, and the education levels of providers and users of information.
This essay is structured as follows. It first focuses on the differences between traditional and modern roles of management accounting and how advanced information technology has brought about these changes. Second, it describes how changes in the business environment have created both opportunities and pressures for the management accountants. Next, it concerns the impact of rates of changes in technology in developing new management accounting techniques which have been used to assist in assessing performance of the organisation. Besides, it explains the changes in skill and education levels of providers and users of information. Lastly, it examines future trends in the functions of management accounting.
Management accounting has been practised for more than half a century but it is only now that its role is changing. According to Atkinson et al. (2004), the first principles of...
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