Art of Msnsgement Accounting - 2995 Words

Pushing the art of management accounting Despite the many strides the profession has made over the years, some still believe that management accounting practices haven’t taken as strong a hold in organizations as they should. FCMA Alexander Mersereau describes the challenges that are slowing the adoption of critical management accounting tools in broader business By Alexander Mersereau, CMA, FCMA M anagement accounting practice has developed substantially over the past century, but recent studies suggest that the practice is no longer making the strides that it once did. Unless management accountants take a hard look at the effectiveness of current practice, this situation isn’t likely to improve. In some companies, radical†¦show more content†¦A similar study by Accenture/Economist Intelligence Unit reported a significant gap between potential and actual practice.3 These indications of a slowing pace of management accounting change may be due to a range of factors. In some cases, new management accounting tools aren’t adapted to organizational strategy or structure and can’t be used. And in some cases, innovation has failed due to implementation-related factors. However, the main problems aren’t technical or structural; they lie in the need for a better management of the management accounting process itself. Getting involved At the heart of the management accounting process is a communications system, or a set of communications systems, that provide information to managers. The ability of management accountants to improve the scope, timeliness or quality of the information they provide depends on how well they understand and manage these systems. There are three main areas in management accounting systems in which communication problems can occur, which are illustrated here using the tale of The Three Monkeys. The three monkeys that most people know are Speak No Evil, Hear No Evil and See No Evil. In this medieval Japanese illustration, a trio of monkeys is depicted with one having his hands over his mouth, another covering his ears and a third his eyes. The original use of this image seems to have been to illustrate wisdom. The three wise monkeys, as they were referred to, counselled