Management Accounting

Management Accounting: A Business

Partner with Management

• Managerial accountants take on

leadership roles and are sought for
the valuable information they
provide.
• The role has been transformed from
number cruncher and financial
historian to being business partner
and trusted advisor.
The Emergence and Growth of Management Consultancy
• E-Business – trends toward technology.
• Global competition – complexities in managing and conducting a business.
• Cross-functional teams - growth in size and complexity in business firms.
• TQM – emphasize product/service quality.
• Continuous improvement – constant effort to eliminate waste, simplify the design of
both products and processes, and improve quality and customer service.
• Need for adequate and timely information in management decision making.
• Development of techniques for the solution of management problems, and the
businessmen’s awareness of their usefulness.
How Managerial Accounting Adds
Value to the Organization?
• Providing information for decision making
and planning, and proactively participating
as part of the management team in the
decision-making and planning processes.
• Assisting managers in directing and
controlling domestic and international
operational activities.
• Motivating managers and other employees
towards the organization’s goals.
How Managerial Accounting Adds
Value to the Organization?
• Measuring the performance of
activities, subunits, managers, and
other employees within the
organization.
• Assessing the organization’s
competitive position, and working with
other managers to ensure the
organization’s long-run competitiveness
in its industry.
Characteristics of Management Services
• Services rendered are for the • Usually non-recurring.
management. • Require highly qualified
• It involves problem solving. staff.
• Relates to the future. • Human relations play a vital
• Involves varied assignments role in every engagement.
Management accounting is the function of providing
professional advisory services, the primary purpose of
which is to improve the client’s use of its capabilities and
resources to achieve the objectives of the organization.
Where are Managerial Accountants
Located in an Organization?
• Where are managerial accountants
located in an organization chart?
• How are managerial accountants
deployed?
• In what physical locations do
managerial accountants actually do
their work?
Analytical Approach and Process
Refers to the systematic, objective and rational method of
solving business problems.
1. Ascertaining the pertinent facts and circumstances.
2. Seeking and identifying objectives.
3. Defining the problem or opportunity for improvement.
4. Evaluating and determining possible solutions
5. Presenting findings and recommendations
Analytical Approach and Process
In case the client requests the consultant to proceed…

6. Planning and scheduling actions to achieve the desired

results; and
7. Advising and providing technical assistance in
implementation.
Stages in Mgt. Advisory Engagement

• Negotiating the engagement.

• Preparing for and starting the engagement.
• Conducting the engagement.
• Preparing and presenting the reports and
recommendations.
• Implementing the recommendations.
• Evaluating the engagements.
• Post-engagement follow-up.