management accounting assignment help australia

management accounting assignment help australia

The Importance of Management Accounting in Australia

1. Introduction

This presents a most timely challenge to researchers and practitioners so that management accounting, the discipline, might evolve in line with the needs of the industry. The main objective of this study is to identify current trends and the future needs for the various management accounting techniques in Australian businesses. A questionnaire consisting of some thirty years for Australian businesses. The questionnaire was mailed to the senior divisional manager(s) who had operational responsibility for planning, control, and measurement of the overall performance for each of the businesses to which the questionnaire pertained.

This paper reports the findings of a survey into the current use and future needs for management accounting in Australian businesses. Management accounting includes the use of planning, control, and performance measurement techniques, but the survey excluded budgeting as it was the subject of a separate in-depth study. The increasing recognition among business managers of the importance of sound management accounting is established. The study also acknowledges the increasing use of various management accounting aids in support of these techniques, particularly the use of level 3 management accounting aids in the measurement of non-financial performance indicators. However, it also acknowledges the need for a broad base of management accounting research and greater attention to the criticality of particular management accounting techniques.

2. Role of Management Accounting in Australia

This study has extended the extant literature, especially for Australia, by attempting to systematically determine the current nature of the field of management accounting in terms of those practicing within the field by focusing on whether and how Australian professional management accounting bodies are engaged with the role of management accounting and to what extent this engagement reflects academics’ ongoing interest in compartmentalizing an eternal debate through the use of multiple theories and that Australian professional management accounting bodies acknowledge these theories and the multifaceted nature of the management accounting role contained within these theory domains. In addition to this unique focus, the study also provides another empirical investigation of Nørreklit’s second sphere of management accounting conceptual domain in addition to a broader, more recent tiered model of management accounting.

The objectives of the study were threefold: to determine (i) Australian professional management accounting bodies’ rankings of and claim over the identified role statements for management accounting, (ii) whether these claims revolved around theorists’ terms illustrative of a functionalist or interpretive perspective, and (iii) if these claims encompassed Nørreklit’s second sphere management accounting conceptual domain. The results of the study show the utilization of identified role statement terms by Australian professional management accounting bodies revolves significantly around terminology illustrative of a functionalist perspective, with more functionalist issues addressed, and terms used, than interpretive ones across all six of Nørreklit’s second sphere management accounting conceptual domain items.

3. Benefits of Management Accounting

1. Benefits of management accounting. All entities from not-for-profit to large listed companies have responsibilities to supply cost-efficient and value-adding goods and services. The manner in which this is achieved is by actively representative management who make informed decisions. Sound management leads to long-term performance. Sound decisions made by management, operating within their areas of responsibility, are often made drawing upon information that is prepared, reviewed, and discussed as part of the management accounting process. In light of the above bifocals, management accounting can provide the following benefits to any entity. An information source. Management accounting provides inputs or participating data to many business processes that large companies utilize to ensure long-term performance has been achieved. It can support the future state of affairs (either company or product) preparedness, detailed think guides for sound decision making, open and transparent decision-making forums, and budgetary targets and business processes centered on achieving those targets.

So how does management accounting make a difference? Competition is truly global today. Manufacturers are striving to make do with high value adding, low-cost activities. Large multinational companies are driving towards achieving ‘best practice’ in all areas of activity and transfer pricing across borders. All companies are starting to directly engage with end users in the value chain to further reduce costs. Complexity is also increasing. The shift from physical products to electronic media that can be used to deliver the same products is tilting the value chain. Manufacturers can minimize costs from the supply chain and directly engage with customers. Almost intangibles, products and services such as life assurance and wealth management, could be made products or services of general and administration expense. Large companies must strive for scale. The internet has provided a platform of growth and reduction in seller switching costs emerges as the prime variable influencing the margin balance. Attracting end users that are serving as market aggregators can reduce the cost of customer engagement. Internet economies of scale can be provided by manufacturers and their business partners in the value chain and the ecosystem of end users can drive the use of alternative payment vehicles.

4. Challenges in Implementing Management Accounting

The cultural divide between ‘old-fashioned managers’ who make decisions based upon gut feelings and ‘young bean counters’ who perform management accounting analysis can deepen and persist, leaving the two parties essentially talking past one another. The persistent organisational conflicts stemming from this lack of understanding can derail management accounting initiatives, particularly if this leads management to discount suggestions for data-driven decisions. Effective management accounting requires additional responsibilities for traditional staff departments as they will be the ones asking what-if and other higher-level questions in many firms. Building cross-functional teams to address such issues also supports knowledge transfer, reducing overdependence on management information system staff. Many firms address these challenges by creating a data-to-insight cycle in which staff and management are trained to ask high-value questions that are then presented for analysis. Staff analysts target physical centres; in other words, management by exception functions that can address data-driven analysis using the results of master data management.

When introducing management accounting practices, there can be considerable technical challenges necessitating hefty, up-front investments in software, hardware, and consulting services. In large firms, different managers often collect and maintain their data in inconsistent and non-integrated ways, leading to ‘data spaghetti’ and requiring extensive data cleansing to integrate and validate potential information sources. Further, by facilitating the accessibility of data, management accounting systems often reveal errors and inconsistencies. The resolution of these errors requires time, care, and coordination among different parts of the organisation. This can be an extensive process that moves beyond fixing errors at their source; they must also be detected and rectified by tracking data through phases of extraction, transformation, loading into data marts, and presentation in ad-hoc reports.

Many issues need to be considered in implementing management accounting, including an appropriate organisational structure, computing capacity, software applications, data capture tools, and experiences of managers and supporting staff. Recent surveys in the USA have indicated that the implementation of management accounting has succeeded in only a small number of early adopter firms and has to achieve acceptance at a more general level. Firms have discovered that in order to derive real value from data, they must address not only the technological aspects of management accounting but also the human aspects of decision making, using data to identify opportunities and then driving the change necessary.

5. Conclusion

One alternative strategy may be to encourage systems of thought that value pluralist, interdisciplinary, and applied research, enhancing our understanding of accounting systems in contemporary society. Such systems of thought necessarily encourage management accountants to interface, to interact, to learn from others, and to transfer and transform knowledge, particularly in non-accounting enterprises. They involve practice, theory, and education, and are not driven by resource provision alone. It is noted that change in research, practice, and education is inevitably slow. Evans (1997) suggests that “in our enthusiasm to be forward-looking, we must not allow our understandings of the evolving current realities to be lost or ignored”. Sysco, Raiborn, and Roth (2006) indirectly substantiate this view, proposing that practitioners reintroduce an ancient notion of their role as levers to allow people at work to achieve their potential in terms of delivering superior value for customers and clients. Such potential may impact positively on an otherwise volatile professional practice.

This article has briefly documented the development of management accounting in Australia and its influence in the broader context. The discussion has highlighted the changing face of the profession, as well as the apparent dominance of positivist philosophy and its attendant training in accounting faculties across the country. The future is likely to witness an exciting challenge for management accountants as they not only address the growing demands faced by an ever-changing business environment, but also address the potential volatility in knowledge. The increased demands for specialization in the accounting and non-accounting discipline areas may further isolate management accounting. There is an urgent need to rethink the strategies that have led to increased regulation in accounting and to promote alternative strategies in accounting practice, research, and education.