In a report produced by Chartered Institute of Management Accountants (CIMA), it delivered a message that, under the influence of the financial crisis and the advanced development of information technology (IT), the remaining core difference to stand out a business lies in the decision-making function. This explains the trend of management accountants (MA) turning into a more advisory role (Burns, Quinn, Warren, Oliveira, 2013), or saying the emergence of business partner. Business partner, a role that supports the decision making process with their analytical skills, is evolved from the traditional MA, usually being stereotyped as ‘bean counter’ or ‘scorekeeper’ (Friedman and ...view middle of the document...
Prior to the crisis, business tended to focus on profit generation, by overusing management tools as well as an accounting system, leading them to a chaos. The crisis has clearly shown that profit generation should not be their long term goal, the business ought to change their use of accounting tools and techniques, and their business objectives from boosting profitability to focusing on value creation. In which, give rise to the concept of business partnering.
The rapid development of information technology has massively changed the business environment, with the effect of the financial crisis on management information, business realized the importance of using management information in decision making, hence raising the need of an intellectual accountant. Specifically speaking of accounting system, it went from all manual work in the 1960s to the start of digitalizing in the 1980s, to the introduction of enterprise resource planning system (ERP) in the 1990s (Baldvinsdottir, Burns, Borreklit, Scapens, 2013). These changes do not only increase the accuracy of data entry, improved efficiency of information generated, they also had a significant impact on the change in the nature of the role of MA.
Figure a. and b. are correlated, the level of management correlates with the level of business analytics. Since figure a. was published in 1963, the top level of management concerned about profitability, we assume that applying this pyramid in today’s situation, they would emphasis on value creation. Wherein, they are responsible for decision making, which needs a higher degree of business analytics, which has to be done by someone who has the knowledge of the information produced with the application of his/her analytical skills. In which, MA would be a suitable candidate as they attained a strong base of knowledge. With the advanced IT system, MA nowadays do not need to ‘bean count’; this spares more time for MA to do something more intellectual, implying MA could be the one providing a high level of management information for decision makers. Some scholars claimed that MA is indeed just obeying the system, hence would lose their control to the technology (ibid.); with the introduction of ERP changing the way managers getting access to management information (ibid.), this undoubtedly accelerated the development of the changing roles of MA instead of eliminating ‘bean counters’.
In short, the financial crisis changed the business direction to value creation which altered the importance of management information. With the advance development of IT, allowing more time for MA to ‘add value’ to the management information. These alterations in the business environment changed the nature of the role of MA.
Hybridized role of management accountants
The evolving role of MA is to support business by using the integrated system to provide accurate data in which they could apply their knowledge and expertise easing the understanding of information for...