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Advance Management Accounting

University: University of London

  • Unit No: 8
  • Level: Diploma
  • Pages: 12 / Words 2945
  • Paper Type: Assignment
  • Course Code: NA
  • Downloads: 1141
Question :

This assessment will cover the following questions:

  • Role of management accountant
  • Strategic management accounting and its techniques
  • Career in management accounting
Answer :


Advanced accounting is that concept where it involves various issues of companies such as cost management, management control system. These both are recognized as importantly in now a days. While analysing these issues it provides the benefits and disadvantage of the management accounting system. In organisation it promotes the critical interpretation of the use of control system and management of information. In present report the role of management accountant has been discussed and the strategic management accounting has been explained. Along with this, the selection process has been described which includes the competitors analysis, stakeholder analysis. Further, the four forces of effective strategy has been evaluated which gives the best possible of outcomes. Strategic management accounting is beneficial for the organisation to take better decision for the achievement of future goals and objectives. Some concepts has been mentioned in this report which support the statements of various authors (Kaplan and Atkinson, 2011).


Role of management accountant

In this era, there is an issue that the functions of management accountant transformed at the time when the business environment changed. The duties of management accountant has been evaluated by way of skills and the way other managers understand them in their company. This is universal evidence that management accounting practices covers management accounting tools, information and methods. With the help of all these techniques company has been able to stand constant on its part. But at the time of genesis of management style, company was mainly dependant on traditional management accounting patterns (Granlund,2011). But there were some issues which came out while doing such practices like unavailability of generating useful information and providing full powers in management decision making in this organisation world. By the time organisations felt the need of changing role of management accounting for better functioning and productivity.

There are many management accountant styles evolved over the time. some of them is:
a). Many workers were alert about the management accountants and they were not only concerned to company's accounting department, they also do activities of operating departments.
b). Faculty members observed that management accountants applied much time in internal consulting and the key essential action for them is to make the strategic planning (Baldvinsdottir, Mitchell and Nørreklit, 2010).

Individuals point out that management accountants in organisations play roles of both “business partner” as well as the ”strategic partner”. The key explanation about these alterations is that management accountants in the company make use of “balanced scorecard”. It is a technique which is used by the management accountants to demonstrate their capacities to superior level managers and fix their functions as a strategic partners (Cinquini and Tenucci, 2010).
With the genesis of particular accounting practices, these are called as “strategic management accounting”. The functions of management accountants also recognised clear alterations.

There are two specific manner of strategic management accounting:-
One emphasis to cost the product benefits given by a company's products; while on the other is to cost the roles in the value chain which furnish value to the ultimate consumer (Modell, 2010).
On the other hand, there are some conflicts arises between traditional and strategic management accounting. The first major conflict is the manner that how cost shall be cost; other conflict is the cost analysis goals; the final deviation is the cost behaviour. SMA is focused on the relative cost position; the theory how an organisation can held regular cost benefits and cost differentiations. That is why, a new invention in the field of accounting practices needs management accountants to increase more capacities and enhance their scope from their regular work, keep eyes on general management, strategy formulation, implementations and product development (Kapferer, 2012).

In this today world, skilled information creation is an ordinary driver caused amendments in more segments. The function of management accountants in the corporate world also amended with this tendency. If the management accountants want to be capable at their designations. Such persons have the ability to stand beyond the change. They wants to be well aware about the new information technology software. Accordingly, it is been so many changes occurred for management accountant. The first trend was so many accountants came to the senior manager positions meanwhile the responsibilities also changed from the part of simply analysis to the strategic planning. This is happened due the abilities of the accountants which have the ability to transform the financial data into strategic planning. Now, accountants share the activities such as making strategies and giving recommendation for better decision making process. Management accountant play the key functions among various departments. Accounting department is key point for making companies in track. Accountants can apply new techniques to calculate and predict future environment where the organisation is going to meet (Ward, 2012).

Accountants generally cope up fast as compared to other employee in the organisation and easily adopt new technology information. Accountants apply new technology to look forward in the organisation so that they can calculate and estimate future environment of the organisation. Management accountants have to involved with the other department's employees with the various features containing the participation of their physical location, the necessity of their team work capacity etc. The Functions of management accountants are to ascertain the set of works for ensuring company's financial position, maintaining financial matters and then support to run the company's entire management. Management accountants are chief individuals in identifying the positions and growth of a company. Job responsibilities can be varied overall and It is mainly based on the firm, their level of experience etc. They can discover their self by exercising any of the undermentioned tasks: 

  • Budgeting
  • Handling taxes
  • Helping in strategic planning
  • Handling assets to identifying compensation and performance packages (Vaivio and Sirén, 2010).

The aim of the management accounting in the firm is to aid in making effective decisions by gathering, processing and communicating information which helps them to make plan,control and assess business processes and strategy. Mostly, there are many individuals who work as financial accountants, cost accountants, auditors and tax accountants. There is a need to create a good management accounting which is essential for more individuals, covering financial professional, top level executives, information specialist, operational and marketing managers. Mostly, in a big organisation,every department has a skilled accountant who is known as controller, and most of the management accounting is completed in such divisions comes below the leadership. And the controller regularly reports to the vice president of finance of a division (Ferreira, Moulang and Hendro, 2010).

Students also Read: Accounting and Financial Reporting


Improve Performance of the Organisation via Strategic Management Accounting and its Techniques

In this cut throat competition, every organisation is trying to improve its performances on a continuous basis, for their revival this is necessary. These tools and techniques are mandatory required for getting in the new markets; lubricates customers via making product price reasonable; innovating new strategies. Therefore, it is compulsory to use techniques for getting informations about the internal and external cost of products, examine the consumer needs and desires, forecast and evaluate company's performance, knowing competitive advantage about the company's products or services. Company's performance is the centre concern of the strategic management process. The strategic management techniques are used to evaluate the performance and then apply approaches or tools to come out form the findings, if occurred,and then try to make the organisation effective (Ferreira, Moulang and Hendro, 2010). There are approximately 15 management tools and techniques have been found which are as follows:

SWOT analysis

It is the internal and external analysis of the organisation. With the help of this technique, organisation come to know about its strength, weaknesses, and industry's opportunities and threats.

Cost-benefit analysis

It is  systematic approach which is used to forecast the strengths and weaknesses of choices. This approach is implemented to identify alternatives which gives the best approach to get the benefits.

Customer satisfaction analysis

It is the tool by which company is trying to improve customer satisfaction levels.

Analysis of employee satisfaction

It is the tool by which employee satisfaction can be analysed.

Market segmentation based on customer needs and wishes

With the help of this technique, company get to know the basic needs and desires of the consumers.

Price analysis

Price of a product can be analysed by way of this tool. This is a process of scrutning the price with common facts of rationality.

 Market share analysis

This tool is a piece of market analysis and points how good business is doing  as coma pared to its competitors.

Customer profitability analysis

It is the analysis by which the profits of organisation generated from customers over the time.

 Activity based costing

It is a costing technique which determines activities in a firm and assign the cost of every task.

Life cycle analysis

 It is the the technique to evaluate the environmental impacts that are involved from the raw material to final product.

Porter’s 5 forces

It is the analysis by which firm can know the competition level in an industry and after analysis, develop the strategy to ovecome the issues which the firm is going to face in near future. It is made upon entire industry where the firm operates.


PEST analysis

It is the assessment of macro environmental factors of an organisation. Like political, socio-economical,environmental,technological. It is also named as PESTLE analysis that includes legal factor.

Portfolio methods

It is the method that apply the purposeful gathering of firm's work.

Balanced scorecard

It is a strategy performance management technique that is supported by design methods and automation tools which could be applied by the managers in the organisation.

Value chain analysis

It is a series of tasks that a company operates in a specific industry executes to present an effective product or service for the market.

The organized concept to manage problems, contributes in supplying a good model for evaluating organisational problems and allowing to access their answers. System tools covers specific steps that are given hereunder:

1). Input: this is the stage where information and data are collected via conducting different researches and surveys. Then, these are evaluated during performance management and solution for organisational complexities. Data and information gathered via conducting surveys should be concerned and reliable. It has been found that surveys are the best techniques to extract relevant data for operational activities in order to deliver the product which is needed by the consumers. Management accountant could apply such data for efficient decision making if these data produces the quality information to the firm. On the other side a data is presume to be relevant if such data is perfect and root of the data should be effectual. Data is gathered from two sources. i.e. external and internal sources. External sources are the sources on which dependability can not assured. The sources are not reliable or less reliable. These are gathered from the outside the firm. These are considered when the data requirement is huge and the company does not have internal sources of information then external sources of information is needed. While on the other hand, internal sources are the one which is already exist within the organisation. As it is cost effective to the organisation. Internal sources of information is ignored when the data requirement is huge.

2). Process: An adequate process is required by the management accountant for enhancing productivity of the firm. Different techniques have been suggested by the accountant specialist to reduce the cost of the product and provide sustainability to the firm by way of product development and product differentiations.

3). Output: It is the final outcome of different processes and it can be generated through inputs and process.

4). Performance management: Performance management is a technique by which management staff is able to achieve its goals and such staff is to take stakeholders demands.

You may also read: Role of Management Accounting in Sainsbury


Career in management accounting role is suitable

Management accounting helps a individual to how to deal with the financial issues as well as with the non financial by using various methods and techniques. So, management accounting is very useful for every personnel. Various skills are like good typing speed and a better knowledge of computer operating skills are necessary and also have a good command over on mathematical approaches. Apart from this also they have to get proper information about cost accounting and regular accounting so as to maintain all the financial data of an organisation. So, management accountant helps all the senior level management and other departments in taking the decision which are related to to finance. A management accountant performs some several task to taking the business entity in working in right condition of financial position from any kind of measurable situation.

There are wide range of responsibilities which a manager of cost accountant can get with their skills. As high authority include high knowledge of working things done. So, they have large number of opportunities. They are working as the key elements of firm so that they are work in favour of business, so they are going to decide that how an organisation can achieve their task and goals in a effective manner. While working with any business organisation an cost and account manager is going to learn following things like managerial skills, monetary policies and planning, approaches and techniques of cost accounting (Garriso and McGowan, 2010).

Firstly, the managerial skills got improved because the manager is going to deal with all the situation and learnt how to deal with those situation and manage the efficiency. Another thing is monetary policies and planning which means how to use the money in an effective manner and made the policies on which work is going to be done with minimum cost. These skills help them to increase their efficiency of work and minimum utilization of resources. So, these type of technical knowledge provide them better skills to do work and deal with any kind of issue of the organisation. So, they can handle out all the barriers of the external environment with the help of these skills and knowledge (Scapens and Bromwich, 2010). A management accountant can perform many tasks in any firm like:

  • Budgeting
  • Assets management
  • Strategy planning
  • Taxation policies and its effect

A cost accountant or work accountant work as a staff member and also as internal auditor who finding out all the financial crises and also maintain fair accounts of firm. Management accountancy is growing but an appreciating career scope alternatives. They need to be capable to check the manner in data and apply past trends to have forecasts and directs business decisions. Management accountants have to consider big, so a knowing of global business. Management accountants have a major function in sharing the dots to keep track of various division's budgets and plans. Management accountants are in highly demand to suggest the top authority (Lukka and Modell, 2010).

Related Service- Assignment Help UK


From the above assignment it has been concluded that various authors has been statements which helps the organisation to analyse the different concepts of accounting that firm can changes anytime. The organisation has various opportunities for the development of cost and management accountant. Along with this the role or organisation is different and which concept they are using in organisation to determine their strength in competitive market. This report also showcases the adaptation of strategic management accounting and its techniques in various entities.


Books and Journals
Kaplan, R.S and Atkinson, A.A., 2015. Advanced management accounting. PHI Learning.
Zimmerman, J.L and Yahya-Zadeh, M., 2011. Accounting for decision making and control. Issues in Accounting Education. 26(1). pp.258-259.
DRURY, C.M., 2013. Management and cost accounting. Springer.
Granlund, M., 2011. Extending AIS research to management accounting and control issues: A research note. International Journal of Accounting Information Systems. 12(1). pp.3-19.
Baldvinsdottir, G., Mitchell, F and Nørreklit, H., 2010. Issues in the relationship between theory and practice in management accounting. Management Accounting Research. 21(2). pp.79-82.

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