Question

2. Explain what do you mean by management accountant? Explain in detail the changing role of the management accountant.

Answer 1

MANAGEMENT ACCOUNTANT :

Management Accountant is a person who looks after the company's books of accounts.They play a crucial role in financial decision making of the company with a motive to maximise profit and wealth of the company.Their role is to prepare financial statements as per the appropriate prescribed standards of accounting , budgetary control, conduct internal audit, supervising accounting staff, investing decisions etc.

CHANGING ROLE OF MANAGEMENT ACCOUNTANT :

• IMPACT OF TECHNOLOGY : Rapid technological advancements has a wide ranging effect on the accounting profession. Technology proposes both opportunities and threats for the management accountant. Management accountants are influenced by the technology in the way they store and retrieve accounting information of the company, evaluate and make investing decisions.Due to technology the accounting book keeping have been replaced with electronic spreadsheets and documents .
• ENSURING ACCURATE FINANCIAL RECORDS : The sound and accurate financial statements gives the overall review of the company's performance year to year helps in major management decisions, it helps the shareholders , investors and others who are associated with the company to know the actual position of the company and where it stand in the market and even invite many investors to invest into the company.Accurate financial records will help the accountants to analyze the company's profitability and stay out of trouble from tax authorities.
• PLANNING, COORDINATING AND CONTROLLING :Management accountant provides the information needed for making decisions to those charged with governance in the company. The main strategy in performance of business activities , company's sustainability, face threat of competition can be done effectively only through perfect planning and the way the management accountant assign responsibilities to managing staff and making them to perform their tasks efficiently and effectively helps in attaining company's goals and objectives.Controlling is the process of monitoring and evaluating the work performed by each and everyone in the company and ensure that company's goals and objectives are achieved.
• ACCOUNTING DATA ANALYZING AND INTERPRETING ACCOUNTING DATA : Management accountant role is to analyze the accounting data whether it is recorded properly in the accounting statements without any errors , frauds or any material mistatements and misappropriations and has to interprete the data so recorded to invite investors and curb any window dressing or anyother illegal acitivities and show a better picture of incomes and losses statement, to be in a better position in the market and do comparative analysis with previous years financial statements and to evaluate the position of the company in comparison to competitive other companies in the market.
• PROVIDING DECISION SUPPORT : Management accountant plays a very crucial role in managerial decision making of the company in accepting and evaluating the investments done by the company in various projects whether they are profitable to the company or not. Management accountant plays a key role in making Dividend decisions and Investment decisions and does a comparative study to maximize the company's profit .