Future of Management Accounting in Australia

Question: Discuss about theFuture of Management Accounting in Australia. Answer: The paper focuses on the practises of Management accounting in Australia at the current state and in the future. Previous studies carried out and various surveys conducted on large manufacturing firms in Australia have shown that most emphasis is put on cost control tools during manufacturing time. However, there has been strong criticism recently that accountants in most western countries, especially in Australia have not manage to adapt their management accounting practices to rapid changing technology. Studies have found out that lack of fast embrace to the changing technology on management accounting practises slows down company introduction to the frequent changes that in the long run ensures efficiency in all operations (Houston, 2002) .Therefore the paper covers the literature review part on which detailed discussions on previous studies done on management accounting is discussed from various different journals, then a proposed problem statement or research gap based on existi ng knowledge that needs further research in the field of future of management accounting in Australia is also discussed. The main objective of the paper is to determine the impact of embracing technology in future of management accounting operations. The paper also provides academic practitioners with future research directions to help them gain better understanding of the future of management accounting. Literature Review Previous research done on management accounting has provided an opportunity that enables researchers consider the past, present and the future state of management accounting. For example, in the United States studies done on management accounting started in the 1950s in accordance to the Fords Foundations efforts that were meant to modernize business schools and reform them. The practice involved putting more emphasis on social science research that was seen to be so demanding which was also improved doctoral education Most of the current social science best management accounting research was conducted by the faculty of non-accounting, reason being that the accounting faculty lack enough experience in conducting the research. Currently management accounting research is being done by accounting faculty which is seen to be capable of conducting social science research. (Nixon and Burns, 2012) Recently in Australia the management in accounting centre of excellence of Australian society funded a Delphi study that looked at management accounting change over the period. The results of the study were compared to those of the Delphi study that was conducted by Birkett on behalf of the taskforce on conducting education in Australia. Major focus of all these studies put both current and the future consideration where by it shows changes on management accounting function and changes in task performed by management accountants and also initiates change in management accounting profession. In the United State, previous study conducted on management accounting showed that a number of respondents surveyed felt that there was rapid change at the rate of which there roles as management accountants was changing compared to the previous years. They believed that this rapid change would eventually continue to increase in the coming future Major common change factor measured in most literat ures include; Advances in information and production technologies, an (Siegel and Fonfeder, 1989) increasing competition, flatter organisational structures and stress on the relationship between customers suppliers. All this changes are seen to result from changes on how organisations operate, manage and trade in a business environment. Eventually this affects the management accounting function indirectly since, management accountants provide information that facilitates efficient and effective operations and management. For instance, rapid change of information technology progress shows that there is an increased awareness of availability of more information by management. The rapid change in technology has also computerised accounting system that leaves management accountants with more time that will enable them to analyse and interpret the information produced. Some other study found that the aim of management accounting was to provide management with fast and accurate importanti nformation, fast and accurate which in turn enable for appropriate action to be taken. The study also concluded that the function of management accounting was to add value through participating in all process of the organisation including control change in and strategy from relation. This has in turn reflected major changes in the business environment and the field of management accounting. In addition the term change features in various studies. Management accountants continue to assume the role of change agents, researchers have argued that management accountants are not just managing change but also initiating change. Other researchers agreed that management accountants are required to facilitate and recognize any changes that take place instead of resisting them as the future of management accounting is seen to be prone to a lot of changes. This is because for any unique review of the future management accounting shows that management will be required to operate as managers of business values as well as agents of change. A review of previous academic literature on the nature and changes in management accounting have shown various results on how professional bodies of accounting in united states, united kingdom and Australia have funded and reported research into change experienced under management accounting. In most cases accounting is viewed as a tool of knowledge that most organizations use to control over managers. Therefore, the progress of this practice is neither linear nor rational. The literature therefore recommends that existing research on management accounting change embrace an integrated perspective which puts into considerations all of these variables .Empirical literature review cited major common change factors including markets globalization, information technology and production advances, and rise in competition among the organizations on environmental level. For an effective management accounting in an organizational level the common change factors are; outsourcing, team work, flatter organizational structures, emphasis on core competencies and on customer supplier relationship. These are found to be the key drivers of change in practice of management accounting .All these factors affects management accounting either directly or indirectly. For instance rapid advances in information and technology shows that management reli es on technology to greatly increase the competition level between organisations. To add to that, firms mainly compete on price, speed of delivery, customer service and quality. Therefore, managers need to show performance for all these factors where as the management accountants must also provide these since they are considered organisations traditional information specialists. (Scapens, 2006) At a general level, from the review of the research on future of management accounting, it is seen that besides management accounting focus on providing efficient services within the business, from planning, providing financial reports, creating system that manage performance, ensuring proper team work, and making various business decisions among many more responsibilities assigned to, there is still a notable gap on how future management accounting should embrace the rapid change in technology in order to ensure efficiency in all its operations. As argued from the most recent study, management accounting is expected to have both business operations skills and technical accounting knowledge to guide the organization through the changing business environment which is seen to be more rampant in the coming future.(Bebbington and Thomson, 2013) Therefore the literature review suggests that due to more focus on efficient operations by many organizations which are also ready to embrace cha nge, the future goal of management accounting should then focus on use of computerized systems that cope up with the changing technology and reinforce management accounting practices that are up to date and make them more accurate, detailed, intergraded, automated and timely. The research question proposed for this paper therefore is; how do changes in information technology improve future state of management accounting operations? Research Objectives The study also addresses previous issues on management accounting and has the following objectives: To provide a comprehensive review of the previous research within the area of management accounting in order to obtain an original understanding of this concept To identify the literature gaps and give academic practitioners future research directions to help them gain better understanding of the future management accounting. To determine the impact of embracing technology in future management accounting operations Conclusion This section provides foundation of the paper. It discussed previous research done, introduced the research gap and research questions. It also provided an overview of research areas that still needs to be done in the field of management accounting in the coming future. As such, further research needs to be carried out to examine other factors that affect management accounting practises either in the past or currently and its effect to the field in future. Although current studies have provided more knowledge and information on factors that affects future management accounting and their impact, more research is required in order to make valid conclusion on this study. References Houston, C. (2002). International Accounting: A Global Perspective. The International Journal of Accounting, 37(2), pp.271-273 Nixon, B. and Burns, J. (2012). Strategic management accounting. Management Accounting Research, 23(4), pp.225-228 Siegel, J. and Fonfeder, R. (1989). Accountants legal liability requirements in twenty-six states. Journal of Corporate Accounting Finance, 1(2), pp.153-165. Scapens, R. (2006). Understanding management accounting practices: A personal journey. The British Accounting Review, 38(1), pp.1-30 Bebbington, J. and Thomson, I. (2013). Sustainable development, management and accounting: Boundary crossing. Management Accounting Research, 24(4), pp.277-283.