MANAGEMENET ACCOUNTING INNOVATIONSQuestion 1Management accounting innovation is increasingly becoming more popular among organizations. As many researchers have detailed in literature, the roles of management accountants is gradually changing in order to adapt to more innovative methods. In the past, the roles of management accountants were basically concerned with attention directing, scorekeeping and problem solving roles. Attention directing and scorekeeping are mainly concerned with control type issues and compliance reporting while problem solving role deals with provision of useful information needed in the decision making process by business unit managers (Christian and Trond, 2005). Over the years the problem solving role has become the central role of management accountants and is gaining more importance than the other roles.
This is because the business environment is becoming increasingly uncertain prompting necessity for different and new information to manage these uncertainties. To keep pace with this dynamism, management accountants have been forced to spend less time in their accounting functions and devote more time gathering information that will transform management accounting. Emsley (2005) refers to this as the role involvement of the management accountant. Role involvement and innovativeness are closely related. Question 2It is quite evident that the role of a management accountant has been adequate in driving innovation.
This is because there have been changing roles of management accountants requiring them to drive innovation so as to stay ahead of other competitors. Birkett (1999) maintains that, with the constant changes in business processes, management accountant innovators need to work more as innovator thus requiring them to focus largely on management accounting information. A management accountant drives innovation by being more radical in adapting new innovation within organization accounting department.
The role of management accounting in driving innovation promotes the supply of innovation such as the balance scorecard and ABC which are helpful in exploiting various potential consulting opportunities which have positive impact on the organization accounting system (Birkett, 1999). The role of management accounting in driving innovation is considered as a rational process which assists organization in creating a stronger competitive advantage. Further, role of management accounting in driving innovation is considered as a rational process whereby organization are able to largely position themselves so as to enhance their level of performance as well as outcomes.
For management accounting to be effective in delivering innovation there is need to understand an organization development path right from its initial idea to a point where this innovation will successfully be implemented. It is important that in their quest to deliver innovation, management accountants need to understand their role of driving innovation will not perform well by using a single innovation ABC. There is need to understand variation in accounting innovation in order to understand the role of management accounting in driving innovation. Question 3 I totally agree with Emsely (2005) that the role involvement is expected to affect innovativeness in terms of incentive to innovate, knowledge about the appropriateness of innovation, and finally, acceptance of the innovation by business unit managers.
It is quite evident that both knowledge about the appropriateness innovation and acceptance of the innovation by business unit managers largely affects the ability defined by a management accountant towards innovation whereas the third which is incentive toward innovation largely affects on the management accountant motivation to innovate (Emsley, 2005).
Knowledge about the appropriateness of innovations enables management accountants to determine whether an innovation to be taken is appropriate or not. The knowledge adopted should reflect on changing business needs and is less likely to be constrained by the accounting option.