Management Accounting In the Future

The role of Management Accounting in the future looks good.
Based on the articles I read, Management Accounting is
going to be the wave of future for accounting. Because of
new management techniques, accounting has become more vital
to the company as a whole. Some of the new ways of
management include total quality management (TQM),
just-in-time (JIT) production and purchasing methods and
activity-based costing. These various types of management
styles pull accounting into the company process more
easily. Accounting has become an actual part of the
management process; therefore, the need of Management
Accounting has grown in proportion to the new management
styles. Accountants are now becoming a larger part of cross
functional teams and are being used more in the decision
making process.
 
Customer satisfaction comes first when dealing with total
quality management. The quality of the company, the product
and the company's service is determined by the customer.
This new management technique affects accountants who have
to report and measure the employees' performance as a
whole. Product cost, service delivery and product
reliability are all measured under total quality
management. Management Accounting's need is increased due
to the frequent follow up reports required by managers.
This need affects the accountant because his or her job is
to provide the vital performance statistics. This is one
reson why Management accountings future look bright.
 
Another new management technique is the just-in-time
production and purchasing method. The just-in-time method
deals with the cut back of warehouse inventory. When a
product is needed, it is then produced. Keeping inventories
to a minimum reduces the need for large warehouses which
can be beneficial to both small and large companies. The
accountant's time is now more able to be spent on
managerial activities and less consumed with inventory. The
just- in-time method leads to an increase in Management
Account reports which can quickly generate cost estimates.
 
Finally, activity-based costing continues with the new wave
of management techniques. This form of costing is much more
detailed and difficult to master but the cost numbers are
more accurate. This product costing method is becoming more
widely used, especially in the computer industry where
direct labor costs are low and competition is high.
Accountants are required to give more specialized reports
that deal with the company and its production and
management.
 
By the end of this decade, management accountancy and
auditing will be seen as full and equal partners within the
wider accountancy profession. Management Accounting is
becoming as vital as financial Accounting and will become
more and more vital in the near future. Membership and
student registrations have grown by 35 and 40 per cent
respectively in the seven years since January 1986.
Membership in the Institute of Management Accountants has
grown from 97 charter members in 1919 to 90,000 members
today. The chapter number has now grown from 4 to 300.
Management Accounting is the wave of the future because of
the new management techniques of total quality management,
just-in-time manufacturing and activity-based costing.
There is no doubt that the public now has a much better
understanding of the profession of management accountancy
and the capabilities of Institute members.
 
Bibliography
 
Signs of the End of the Recession for Accountancy ?
Management Accounting. Vol. 72 Iss. 7
 
July/Aug. 1994 P4.
 
New Frame for Financial Management. Management Accounting.
Vol. 72 Iss. 4 April 1994
 
P20-22.
 
A Vision for the Future. Management Accounting. Vol. 71
Iss. 10 Nov. 1993 P20-21.