Management accounting provides necessary information to assist management in decision-making and management control. The chartered institute of management accountants defines management accounting as “the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan, evaluate and control within an entity and to assure appropriate use of accountability for its resources. Management accounting practices could be dated back to the 1700s. Evidence of management accounting practices has been provided by (Fleishman and Parker,1991) who noticed activities such as expense control, product costing, overhead allocation among others existed in the books of some 25 firms that were operating in the 1700s.
The traditional management accountant’s main functions include cost control, budgeting and manufacturing expensing monitoring and segment reporting. Their roles have always been an important decision-making parameter because it helps business to control and measure employee performance and corporate profitability. Management accounting unlike today, was solely an internal business function of an entity. Feeney and Pierce (2007) characterize this role as one which concentrates on two areas; supporting management decision making and monitoring and controlling.
The advert of Johnson and Kaplan’s “Relevance lost” with regards the role of management accountants has sparked up a lot of controversy on the management accountant’s role in an organization.
Change has become the order of the day information in now increasingly accessible to managers without the management accountant being the main source. Technological advancements and the introduction of many accounting softwares. Many people believe this changing role has brought both opportunities and challenges to today’s management accounts. Today, the management accountant must not only posses technical skills or play his role as a...