Over plan, evaluate and control an organization and

Over the last several decades, the role of the management
accountant has changed dramatically due to the world “transitioning into a global
marketplace, thereby, internalising financial markets, industry and politics” (Global Journal of Management and Business
Research Volume 12 Issue 15 Version 1.0 Year 2012, Global Journals Inc.)
This transition has led to rapid globalisation which consequently has resulted
in increased competition, advances in technology and the pressure to obtain information
more quickly. (Siegel and Sorensen 1999)

In 1981 the Institute of Management Accountants defined
management accounting as “the process of identification, measurement,
accumulation, analysis, preparation, interpretation, and communication of
financial information used by management to plan, evaluate and control an organization
and to assure appropriate use of accountability for its resources” (Global Journal of Management and Business
Research Volume XII Issue XV Version I The Roles and Responsibilities of
Management Accountants in the Era of Globalization Mohammad Ahid as
shareholders, creditors, regulatory agencies, and tax authorities) This
broad definition highlights how, in previous years the function was more traditional
and management accountants played a passive role as the information provider for
businesses. The department was very much isolated from the rest of the business
as they were ultimately viewed as independent and objective assessors of
financial performance.

However, in more recent years with the pressures of
globalisation, management accounting now plays a much bigger role in
organizations as they participate in decision making (Cooper & Dart, 2009) and help companies to make decisions in
order to operate at their optimal levels. The IMA has now improved its definition
of the management accountant, describing the profession as involving the
partnership of “management decision making, devising planning and performance
management systems, and providing expertise in financial reporting and control
to assist management in the formulation and implementation of an organization’s
strategy.” In an organisation of today, a management accountant would provide relevant
information and advice on subjects including profitability analysis, product
pricing, make or buy, budgeting and product mix and discontinuation.   

This change in definition was the result of globalisation
which had extreme effects on the world economy, as competition became a higher
pressure between businesses, the importance of international trade rose and
companies sought to get ahead of their rivals by gaining their financial
information and using it advantageously. Businesses now have an increased emphasis
on customer satisfaction and therefore utilize value by using Total Quality
Management (TQM) and innovation in order to strive for continuous improvement
and become more strategy orientated. Businesses now excel using ‘hybrid’
accountants, who are integrated into the company and have vast inside knowledge
and understanding of the business, unlike more traditional accountants who were
a separate entity to the business.

Furthermore, the advances in manufacturing technology and
the impact of information technology meant that the ability to produce and gain
information occurred more rapidly. With the digital era, came increased
communication and the role of management accountants became advisory. Modern
management accountants excel by being proficient in IT, having excellent
communication skills and having the ability to recognise and cope with
different organizational perspectives and view point, it is clear that traditional
accounting skills are no longer dominant.

This revolutionary change to the definition and role of the
management accountant has allowed businesses to gain a more ‘whole’ snapshot of
their business, devise an effective plan and adjust accordingly, rather than the
role simply “concerned with providing information to managers” (Garrison, Noreen & Brewer, 2006).
There is no doubt with the technological advances predicted to occur in the
near future, the role of the management accountant will once again change and
become and even more valued asset to an organisation.