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The Future of Management Accounting - Coursework Example

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The paper “The Future of Management Accounting” identifies that the future of management accounting lies in strategic management accounting as a success factor in an ever-globalizing environment. Analysis of financial data is no longer sufficient to define the role of the management accountant…
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The Future of Management Accounting
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Download file to see previous pages In opposite accord, strategic management accounting (SMA) involves the use of similar financial data, however, it is a blend of internal strategies and external strategies that are created throughout the process of data accumulation and analysis. Where the two concepts differ is that traditional management accounting is an accounting process in which internal operational components are better organized in order to attain corporate goals. Strategic management accounting, on the other hand, involves more of a governance function by which the organization develops long-term business strategies, competitive strategies, or general repositioning of the business based on assessed financial data stemming from a variety of sources. Evidence suggests that the future of traditional management accounting does lie in strategic management accounting due to the competitive nature of today’s businesses and the centralized global network that drives new business strategies. Management accounting “emphasizes data for managerial decisions, including planning, control, performance evaluation and general decision-making in areas of operations” (Delaney 2000, p.18). The role of the internal functional manager is to ensure that resource allocation occurs in-line with corporate goal attainment and internal management must ensure that they have access to necessary financial data in order to maximize success in the planning, execution and control processes throughout the organization. This role is responsible for the day-to-day operations of the organization, thus their need for financially-related data is crucial to avoid budget over-runs and meet performance guidelines mandated by executive or governance leadership (as two examples). Traditional MA is not about the construction of business strategy, it is about using appropriate accounting data in order to facilitate meeting the business goals effectively based on senior-level demands.  ...Download file to see next pagesRead More
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