Importance of Management Accounting-Free-Samples for Students

Question: Explain the Nature and Importance of Management Accounting, and the Current Roles and Responsibilities of Management Accountants in Contemporary Business Organizations. Answer: Introduction Management accounting refers to the analysis and the interpretation of the accounting information in such a manner so as to help the top level management regarding decision making. It helps the management in functions like planning, analysing, forecasting, reporting and so on. Management accountants are the one who analyse and interpret the financial data in order to help the managers in taking decisions and control over the business. Cost accountants does the work of creating the budgets and managing the cost of organisation. This report is all about the responsibilities and role of a cost and management accountants and the job description for the position of cost and management accountant, its selection criteria and the skills required for this position (DRURY, 2013). The below table shows the 10 different job positions of cost and management accountant and their description collected from the different websites. Data Collection Table 1: Cost and Management accounting positions. No. Position Title Sector(Industry or Government) Position Description Date Listed Website Address Search word or phrases 1 Cost/ Operations Accountant Industry Preparation of the annual budget, keeping the cost up to date and analysing various cost. 18-Oct-17 www.seek.com.au Accountant 2 Management Accountant Industry Database management and providing monthly management reports 13-Oct-17 www.adzuna.com.au Management Accountant 3 Cost Controller Industry Tracking and managing the cost, doing estimations and preparing budgets. 27-0ct-17 www.seek.com.au Cost 4 Regional Management Accountant Industry Providing management analysis and monitoring junior staff. 27-Oct-17 www.seek.com.au Management accountant 5 Project Accountant, Project Cost Controller. Industry Review of cost and expenses, budgeting and forecasting, report on WIP and projects. 1-Nov-2017 www.carrerone.com.au Cost Accounting 6 Senior Management Accountant Industry Reviewing the financial policies and procedures and overall financial performance of the organisation 18-Oct-17 www.au.jora.com Management accountant 7 Financial Analyst Industry Report to senior financial analyst, making annual budgets and forecasts. 19-Oct-17 www.apsjob.gov.au Accounting 8 Cost Accountant Industry Cost reporting, product costing management, analysing inventory, balance sheet and implementing reductions of cost 7-Nov-2017 www.careerjet.com.au Accountant 9 Management Accountant Industry Giving decisions to finance department and executives of university. 25-Oct-17 www.au.jora.com Management. 10 Manufacturing Cost Accountant Industry Time to time costing of manufactured items, reports on analysis of cost and manufacturing 5-Nov-17 www.recruit.net accountant Data Analysis The given table shows the analysis of the data collected related to the job positions of cost or management accountant. Table2: Data Analysis No. Position Title Position Requirements (responsibilities) Cost and Management Accounting criteria required for position Alignment with learning outcomes of ACCT 6004 1. Cost/ Operations Accountant The key role is to develop standard costing and updating costs. Analysing material, labour. And overhead costs Monthly accounting, reporting and reviewing the process of supply chain and manufacturing. Ad hoc cost analysis, inventory analysis. Preparing budgets and forecasts. CPA or CA Excellent Interactive skills. Excel knowledge and analytical skills. Capable of working independently and as a part of a team. Yes 2. Management Accountant Doing trend analysis and helping marketing, sales teams. Working efficiently with others in order to reduce cost and increase efficiency. Managing databases and creating ad hoc reports. Reporting and variance analysis. CA or CPA qualified. Experience in the similar industry or Big 4 experience. Knowledge of inventory. Ability to interact with other staff (non-financial). Very good excel skills. Determined towards the work. Yes 3. Cost Controller Evaluating cost performance Cost estimates for projects delivery. Making standard cost as per industry standards. Analysing the scenario of uncertainty. Understanding flow of cost with help of tracking tools. Accounts training such as ERP/SAP/Pronto. Accounting Qualifications like CPA/CA. Experience counts-5 years Good communication and management skills. Capable of working independently and as part of team. Yes 4. Regional Management Accountant Giving analysis and reports on management to the companies. Coordinating with the senior and junior staff. Interacting and working with other staff also (non-finance and operations). CPA/CA Having experience of the same position. Active, determined and an autonomous worker. Great communication skills. Yes 5. Project Accountant, Project Cost Controller Providing financial support. Reporting to project director. Involvement in process of business control, planning process. Doing management of contract and working capital. Cost and expenditure review. Project and WIP reporting. Budgets and forecasts. Qualification- CA/CPA. Technical skills in project accounting. Have leadership qualities. Highly focused on the work. Capability of giving good customer services. Yes 6. Senior Management Accountant Supporting the Business Finance Manager. Developing good relations with the people at all levels. Reviewing the performance and analysing the factors affecting it. Making financial objectives and policies. Capable of working to strict deadlines. Pursuing or completed CA or CPA. Advanced excel knowledge. Good at interacting with people. Have been used a large ERP system. Must take initiatives. Yes 7. Financial Analyst Have to be a member of budgets and forecasting. Must report to senior financial analyst. Responsible for the delivery of outputs for Defence Housing Australia (DHA) Providing corporate plans, budgets and forecasts Professional accounting knowledge. High level analytical and forecasting skills. Great communication skills. Maintain relations with stakeholders and top management. Meeting the required medical standards and all the security checks. Yes 8. Cost Accountant Analysis and accounting of inventory, balance sheet and profit loss. Budget analysis, product costing management, BOMs scorecard, KPI and reporting of cost. Cost reductions implementation and improving profits. Developing cost accounting models. Analysis and management of variances and projects proposal. CPA and having a degree of professional accounting. ERP knowledge such as JDE. Experience of accounting in manufacturing. Communicating with senior finance and stakeholders. Good interacting skills. Yes 9. Management Accountant: Budgeting and Course Costing. Supporting in decision making process. Budgeting, forecasting and assisting the manager. Doing course costing. Performing all the desired task by preparing a framework which ensures quality, and transparency. CA, CPA Planning experience. Strong analytical skills required. Information about using ERP system. Effective communication. Yes 10. Manufacturing Cost Accountant Accurate costing of manufactured and purchased items. Providing support to ARC head office. Properly maintained, prepared manufacturing cost elements. Reports on cost analysis and manufacturing. Support strategic improvement initiatives. Tertiary qualification such as CA, CPA, CIMA. Experience in manufacturing costing. Strong communication and organisational skills. Have experience in financial modelling. Have used Symix before. Yes Report Website search summary Job websites: The data is collected from different job websites named as seek, adzuna, carrerone.com, au.jora, apsjob.gov.au, careerjet.com and recruit.net. Seek is considered to be the Australias number one job website. Common sectors: All the positions mainly belong to the industry sector. Classification of jobs: The jobs are classified in two categories: Cost accountants: Cost/ Operations Accountant, Cost Controller, Project Accountant, Project Cost Controller, Cost Accountant and Manufacturing Cost Accountant. Management accountants: Management Accountant, Regional Management Accountant, Senior Management Accountant, Financial Analyst, Management Accountant: Budgeting and Course Costing. Common requirements and responsibilities of job positions Basic and common requirements for these two job profiles are that, either being a cost or management accountant, one should be familiar with the work of preparing reports, budgets and forecasts. The person should know how to analyse the various costs, to find the reasons for the inaccuracies and variances, to manage the financial accounts of a business, inventory, doing ad-hoc projects and to support the other managers of the cost centre and the directors in decision making process. Requirements related to cost and management accounting knowledge and skills To get selected for the profile of cost and management accountant, the person should have a solid accounting background and should have qualified CA, CPA, CIMA, CMA and ACA. Excellence in MS Excel, used to ERP system, strong analytical skills and a very good communication skills. Most common cost and management skills required CA, CPA, CIMA, ACA and CMA are considered as the most common and important cost and management accounting skills required for the job positions of the cost accountant and management accountant. These are the various professional courses conducted by the institutions such as ICAI, AICPA, and ICAEW. These courses are very beneficial as they help in getting high level education, aggregated information, specialisation and professional knowledge, helps in attaining good designation in an organisation. To get the job of an accountant, one need to excel in these courses as they are the basic requirements for these jobs. As per my opinion, CPA and CA are the most desirable, common and important accounting skills required to get the position of the accountants. Although there are many skills that are require to attain the job of accountant, but these two skills are most considerable among all of them. Every organisation seeks CA and CPA knowledge in every candidate who applies for the job of accountant. Less common cost and management skills required There are many diploma courses in accounts and undergraduate course which are not given much priority for the position of accountant. These courses have a short duration and does not attract a good job profile. They do not provide high level specialisation in the field and generally considered on a basic level. To be a management and cost accountant, one have to gain higher professional knowledge by pursuing course like CA, CPA and so on. As per my opinion, having degrees like bachelor in commerce and bachelor in commerce honours, will not help the candidate to meet the selection criteria of the accountant job. These bachelor courses and degrees are not considered to be specialised and professional courses. A candidate need to pursue some higher skill to get selected for the job. Challenges faced by cost and management accountants Other than accounting knowledge and skills, there are various challenges faced by management accountants. The factors which bring changes in the profession of management accounting are environmental and organisational factors. Environmental factors are termed as external factors such as market globalization, changes in business environment, up gradation in the production technologies, and so on which influence the role of a management accountant. Emergence of new regulations and new tools of manufacturing has also made it more challenging for the accountants. Organisational factors generally deal with relation between customer and supplier, team work, strategies, uncertainties and so on. They directly affect the day to day operations of a business Changes in the work pattern, quality of product, changes in attitude are turned out as the challenges which are being faced by accountants at organisational level. There is a need to react to these changes and making the role less challengi ng. Alignment of ACCT6004 to positions The topics covered in ACCT 6004 gives the concept of cost and management accounting, cost classification and allocation, cost- volume-profit analysis, job and process costing, variance and cost analysis for the purpose of decision making. All these topics give the thorough knowledge about accounting skill which is required to be gained for the position of an accountant. The learning outcomes of this subject explain the nature, importance, current roles and responsibilities of a management accountant and also analyse the organisational issues. These outcomes are aligned to the job positions to the great extent as they help in a better understanding of the responsibilities of an accountant. The person is capable of attaining such job positions only, when he has the basic knowledge about cost, management and accounting. The jobs clearly elaborate the role and duties of accountants which in turn explains the learning outcomes of this subject (Abdallah, 2017). Future study implications ACCT6004 Cash flow statement and fund flow statement are the topics, which are not covered in ACCT 6004. They are also a part of management accounting. Cash flow statement shows the inflow and outflow of cash in the different activities of an organisation whereas fund flow statement show the changes in the working capital of a company. It gives the information about the application and sources of the funds. I think these topics should be covered in this subject as they give a better view of circulation of money in a business and provide accountant, the information about the financial position of the company, change in asset level, uses of the fund and many more. On a whole, this information is very useful for the management accountant for preparing the accounts and reports. Conclusion From the above report, it can be concluded that cost and management accounting skills and knowledge are the basic requirements for the job position of cost accountant and management accountant. These job positions perfectly align with the learning outcomes to ACCT 6004 as they require the knowledge of what management accounting is. Its nature, importance and the positions also clearly states the roles and duties of a management accountant. Reference Abdallah, W. (2017). Management Accounting Practices in the Global Business Environment: the Case of the Middle East.