Essay, Research Paper: Accounting

Accounting The role of Management Accounting in the future looks good. Based on the articles Iread, Management Accounting is going to be the wave of future for accounting. Because ofnew management techniques, accounting has become more vital to the company as a whole. Someof 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 ofmanagement styles pull accounting into the company process more easily. Accounting hasbecome an actual part of the management process; therefore, the need of ManagementAccounting has grown in proportion to the new management styles. Accountants are nowbecoming a larger part of cross functional teams and are being used more in the decisionmaking process. Customer satisfaction comes first when dealing with total quality management. Thequality 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 theemployees' performance as a whole. Product cost, service delivery and product reliabilityare all measured under total quality management. Management Accounting's need is increaseddue to the frequent follow up reports required by managers. This need affects the accountantbecause his or her job is to provide the vital performance statistics. This is one reson whyManagement 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 isneeded, it is then produced. Keeping inventories to a minimum reduces the need for largewarehouses which can be beneficial to both small and large companies. The accountant's timeis 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 quicklygenerate 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 aremore accurate. This product costing method is becoming more widely used, especially in thecomputer industry where direct labor costs are low and competition is high. Accountants arerequired to give more specialized reports that deal with the company and its production andmanagement. By the end of this decade, management accountancy and auditing will be seen as full andequal partners within the wider accountancy profession. Management Accounting is becomingas 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 theseven years since January 1986. Membership in the Institute of Management Accountants hasgrown from 97 charter members in 1919 to 90,000 members today. The chapter number has nowgrown from 4 to 300. Management Accounting is the wave of the future because of the newmanagement techniques of total quality management, just-in-time manufacturing andactivity-based costing. There is no doubt that the public now has a much betterunderstanding of the profession of management accountancy and the capabilities of Institutemembers. 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.