The paper "Management Accounting Innovation " is a good example of a management assignment. The business environment has been changing over the years. These changes bring in new challenges to managers as they try to strategize on how to remain competitive in their industry. Innovation is a key ingredient through which an organization adapts to these new changes in order to survive in an unpredictable business environment. All aspect of an organization should change according to market demands, so as to remain relevant and compatible with other units of the organization.
Many Management accounting departments have been accused of remaining rigid and conservative over a long time. Despite the introduction of new management accounting techniques such as ABC and balanced scorecard, many continue to apply traditional managing accounting techniques (Scapens, 1991). You are required to explain why Management Accounting Innovation is one of the core themes driving modern organizations. Management accounting is a recently introduced concept used in the preparation and interpretation of management accounts. These accounts can be used by the department and high ranked managers in making significant decision making. This accounting was developed to boost traditional financial reports in so to assist in decision objective and concrete decision making.
Management accounting innovation is one of the key themes driving the modern organization. There are three key reasons behind this argument. This is based on the roles of a management accounting manager in a modern organization. Management accountings manager has been playing multiple roles affecting an organization in various ways (Wolfe, 1994). Apart from working from his department, he has been involved in the other departments particularly those applying information from his department.
There are three key functions of a management accounting manager in an organization. First, he acts as scorekeeper, which is a directing role whose main focus is on compliance reporting (Kaplan & Norton, 2001). In this case, the manager verifies whether those involved in the preparation of corporate reports adhere to set guidelines and procedures. The second function of a management accounting manager is attention direction. This role involves giving direction with the aim of enhancing control. The third role of management accounting is problem-solving. The manager provides information to other business units’ managers, which is necessary for their decision-making process.
It is, therefore, clear that the management accounting manager has an influence in all other departments in an organization and hence, its innovation has an impact on the modern organization. 2. Do you agree that the role of a Management Accountant has been adequate in driving innovation? If Yes/No and why? I agree with the statement that the management accountant role has been adequate in driving innovation in an organization. First, organization innovation is an information-driven process.
Information prepared by management accountants through their report preparation is immensely significant in triggering innovation. In a modern organization, management accountants are allocated duties not only in the accounting department but also in other departments in order to give them enough time for gathering information. Secondly, management accounting is essential in business management, as well as, enhancing control. As a result, management accountants strive to ensure that both financial and non-financial information generated is significant in establishing relevant strategies to fit the business environment at hand. In this case, management accounting can be used as an innovative driver in the organization concerned.
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