However, the world has seen enough evolution in this field; the recent one being strategic management accounting. This report looks into the strategic management in enhancing the performance of today’s business organisations. A comparative…
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With change in time, the importance of strategies has increased in the sense that managers have no leeway in case a strategy is wrongly formulated. The primary objective of management accounting system is to help the organisation to achieve its strategic objectives. “Strategy is the way a firm positions itself from its competitors” (Ansari, et. al, n.d., p.6). With the rapid and unpredicted changes in the business environment, competition has also been intensified. It is high time for the organisation to align all its efforts to beat the competition and enhance its performance. In such a competitive environment, even the decision making process seems to be very difficult. With the spread of companies across geographical borders, it has become imperative for managers and business leaders to get access to critical business data which, when analysed properly, can lead to a better and clearer picture of the organisation. This is the area where strategic management accounting has been assuming greater importance consistently. Strategic management accounting can be seen as an enhanced tool to reduce the issues with decision making process. This recent arena of the accounting field has emerged as a significant tool to help the companies in achieving competitive advantage in the market.
Management Accounting is a system which collects, classifies, summarises, analyses and reports information assisting the managers in the decision making and control activities. Management accounting demands both the collection, analysis and interpretation of financial or cost data, other data such as sales, price, product demands and measures of physical quantities and capacities (Controller General of Accounts, n.d.). Management accounting also considers preparing financial reports for non management groups like shareholders, regulatory agencies, creditors and tax authorities. In this accounting system, the operational results have been reported using financial and non- financial
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Management accounting is considered to be useful when it properly displays an external image and a futuristic picture for an organisation. Strategic Management Accounting on the other hand can be distinguished from other management accounting activities through its extensive external orientation; this extensive external orientation includes focus towards customers, competitors, suppliers and all other stakeholders that get affected by the organisation’s normal course of business.
Performance measures can be considered as metrics for monitoring the success of an activity and competence of the workforce in utilizing the available resources. Competence can be attained by maximising the output with the minimum number of resources. Improvement in competence can be achieved by providing fewer inputs that can be used to produce a particular amount of output.
The two types of financial management differs in the sense that financial management can only provide the company a glimpse of where it is standing right now in terms of financial soundness. While strategic management enables a company to go beyond the boundaries of the normal financial management.
The project report then looks at the aims and objectives of establishing a management accounting system and the characteristics of information flow at the strategic level. It also analyse the effectiveness of SMA system in the provision of information to assist the senior management team in the achievement of the corporate objectives at Highline.
It is equally important that manage accounting that are generated MUST vary from one industry or company to another. Also, it is a MUST that accounting data that is used by managers vary from one business type to another or one business location to
However the book lacks the incisive depth on international accounting practices in the sphere of costing and falters on strategic decision making approaches.
Next, Nobes and Parker have drawn the reader’s attention to a significant set of international accounting practices
Further evaluation on the different techniques of strategic accounting has been discussed. Finally, concentration has been made on how the strategic accounting system overcomes the drawbacks of the traditional accounting system.
Top Building Construction Ltd is well established company in the construction industry mainly focusing on building large industrial buildings, as well as offering maintenance services. This company has vast experience of more than 30 years, currently the
trategic management accounting which leads to evaluate an organization’s interaction between its product market and capital market, analyze the internal architecture of the company and its cost considerations so that it can be evaluated whether it is required to bring any
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