Management Accounting Systems Dissertation

Management Accounting Systems Dissertation

Management Accounting Systems (MAS) comprise of firms’ internal systems that are employed to evaluate and measure their accounting operations. Generally, companies employ accounting methods such as TQM, JIT, and ABC to monitor their financial transactions such as expenses, income and sales, accounts payable and funding. Further, MAS provide an opportunity for companies to generate various organization statistics that provide interested parties or management with a wide variety of information to assist in processes of decision making in an organization. Presently, both Company-A and Apple Inc. have integrated management accounting systems to foresee their accounting operations. The firms use computer-based or automated systems that use cloud-based or specialized services. This report; therefore, highlights the outcomes of two research articles covering application of MAS in manufacturing companies considering three key management accounting methods: TQM, JIT, and ABC.

The terms information and information system are viewed to have increasing effects on the enterprises, occupying model fields and management analysis. Economic information contains news from different fields and information as found in any other system. In most cases, this information is derived from the economic database. Resources are relatively scarce and limited and so management in most cases finds itself confronted with the decision-making problem.

In this regard, good accounting information should be accessible to offer suitable and precise decision-making that could lead to maximization of profitability of an organization and utilization of scarce resource optimally. Accounting is normally viewed as the language used in all businesses. In simple terms, it is a tool used by business enterprises to record, report, evaluating economic events & transactions that normally affect its operations (CONG, 2017).

Accounting takes the role of processing all financial performance documents from payroll, cost, capital expenditure and all other obligations of owner’s equity and sales revenue. Information is provided from accounting about how a business relates to the internal and external users, including, investors, managers, and others. One of the most important features that saturate organizations is management decision and it shows its failure or progress in achieving already set goals and objectives.

Identification of any three specific examples of the different types of management accounting methods and/or techniques from the case

Total Quality management (TQM)

According to Watts, Yapa & Dellaportas (2014), Total Quality Management is an accounting approach whose primary aim is to embed the awareness of quality in all the operations taken in a given organization. TQM is a philosophy of management that requires the change of organizational culture. It is a philosophy of management whose primary purpose is to strive in making the best utilization of opportunities and resources in a given constant environment.

TQM entails all the efforts in the organization in establishing a permanent accounting climate through which the organization can continuously improve its capabilities in ensuring there is the delivery of high-quality accounting to the organization. Skipworth (2018), pointed out that the support of management leadership and process of statistical control ensures participation and loyalty of employees. Likewise, focuses on planning and product design processes, quality control and involvement of customers and suppliers. Therefore, the major sphere of interest is organizational factors such as cultural change, leadership for change, employee training and cost of quality.

According to Hall & O’Dwyer (2017), organizations must be accounting focused rather than product focused. It also lays emphasis on the use of statistical methods, continuous training of workforce and top management commitment to constant improvement in quality. Therefore, Total Quality Management impacts the creation of systems in an organization that help in learning, cooperation and facilitating the implementation of different management practices to ensure performance is enhanced. This results in improved performance on products, processes and services and also the fulfillment of employees’ motivation in the organization.

Laureani & Antony, (2016), noted that the implementation of Total Quality Management in organizations creates improved performance by engaging activities of management leadership, strategic planning, engaging training programs and ensuring knowledge and process management are implemented.

Just-in-Time (JIT)

According to Prakash & Chin (2014), Just-In-Time production and inventory refers to a wide-ranging system for guiding the production flow in a multi-stage manufacturing setting. It is an idea of total waste elimination. The simple meaning is “only what is needed, when it is needed, and in the amount needed” to eliminate waste, inconsistencies, and unreasonable requirements, resulting in improved productivity (Prakash & Chin, 2014).

A company’s values can be greatly enhanced by adopting JIT system especially in savings the inventory carrying costs, reduced storage and handling costs. Also, the chance of spoilage and obsolescence and theft and opportunities costs associated with having excessive inventories will be reduced. Besides, the pull method of JIT enables the needs of the customers can be addressed more quickly and effectively and therefore the market share will be increased directly.

JIT system can be performed by anybody in organization especially within the production line. For example, demand for new raw materials is signaled when there is a need in Work Cell Stage for more of these inputs. This triggers the purchasing activity. Demand for the production from Work Cell Stage is signaled when there is a need in Sub-Assembly Stage for more of these inputs.

This triggers the manufacturing activity in the Work Cell Stage (Nie, Bai, Jiang & Pang, 2014). Also, demand for the production from Final Assembly Stage is signaled when there is a need for the finished goods orders by customers. Therefore, noted that the involvement from the purchasing department to manufacturing department and finally until Sales and Marketing departments are greatly needed and proved that JIT system covers all aspects of the production process.

Activity Based Costing

Currently, business environment is changing due to the development of technology. The company’s management accounting system should find out a right accounting tool to dispose of an optimum cost control. The Activity-Based Costing (ABC) is known as the most popular management accounting tool of last twenty years and it is also known as the revaluation of managerial accounting in the circumstance of the development of techniques (Hoozée & Hansen, 2018).

This is because it could give more accurate, traceable cost information and simply by growing the number of cost drivers used in costing system while the traditional cost accounting system represent product cost distortion and it could lead to inappropriate strategic decisions.

The components of company-A’s management accounting system include; reports of income expenses and income, and sales analysis. These components are based on Activity costing that is determined by the organization production activities. In addition, the components provide an organization with the required information useful for making decisions and planning.

In addition, the company uses the components of a management accounting system to delete or add information from its product portfolio (Watts, Yapa & Dellaportas, 2014). Further, the company incorporates the components of the system to make a decision of the best production process or line that can be used for various products. The managers of the firm use these components to make an analysis of the major manufacturing processes in the organization. The components of the management accounting system for Company-A include budgets, reports about investments, and reports of standard costs.

According to Watts, Yapa & Dellaportas (2014), the firm uses these components to perform organization decision such as financial management, organization spending, total cost evaluation and many others. The company incorporates these components to estimate their total costs of production. The management calculates its cost values by measuring the rate of an activity and its drivers.

The components help an organization to overcome overhead expenses in business operations which may limit their labor input. Also, the organization incorporates the components with the intention of diversifying its products tastes. In addition, these components of management accounting systems help Company-A to obtain factual information or data that is in line with the organization’s budgeted and actual figures thereby allowing the managers and owners of the organization to incorporate the appropriate measures of controlling risks.

In addition, these components help an organization to attain timely feedback that is in line with the current activities of the organization thereby helping it re-evaluate its operational decisions. Therefore, these components of management accounting systems help the organization to make its financial decisions to monitor its business operations during the production processes.

ABC is especially useful for the complex environment organization. In this case, Company-A has nine divisions with different strategies. Therefore, ABC is a best management accounting tool for Wesfarmers in order to obtain their target. Based on the Wesfarmers’s strategies that was discussed above. The ABC model could have many benefits that could help the company to achieve their strategies. First, it could assist the top management of Company-A, in pricing, deleting and adding the products, selecting outsource and in-house items.

In this case, the ABC model is primary to support management decision or it is known as the strategic tool to help Wesfarmers to obtain the competitive advantage. This is because it could help the company identifies the elements that impact on the cost dynamics in long term and minimum the cost for particular job to improve Company-A’s competitive position (Watts, Yapa & Dellaportas, 2014). Subsequently, it will reduce the cost product due to better design and improvement of product process. Furthermore, it is easy for ABC to determine which overhead cost should be assigned in the product to minimum the price of product. Then, the buyers can be benefited from this strategies.

Additionally, ABC model can help Company-A in distribution cost. For example, the managers may rely on this model to choose the profitable channels or alter the distribution channels due to the overhead allocation. Another advantage of ABC is that it could help the top management of the company to identify the unprofitable product lines and accurate costs. Hence, it could improve the efficiency of operation as well as the profitability to build in competitive cost advantage and add value to its stakeholders and its customers.

Management Accounting Systems are relevant to contemporary organizations citing evidence from the case company

When the term MAS are mentioned most people think of manufacturing companies. This is because of their long association with giving management explanations for the intrinsic management functions, specifically in the manufacturing zone. This may have narrowed its utilization in the utilities industry as a tool to be used to improve financial performance where intrinsic and extrinsic trade advice could be required for strategic planning.

Other purposes of MAS in the contemporary organizations include organizing, controlling, motivating and decision making. Current ingenious MAS practices for example total quality management, performance evaluation furnish beneficial management accounting explanations for customer management and the improvement of a competitive advantage for an organization as it is revealed in Company-A. According to Karpova, Serikova & Tyschenko (2019), some MAS practices equip firms with strategies so that it can make a variety of clients to have eternal preference for an organization’s products and utilities.

The adoption of MAS practices and approaches can furnish an organization with continuous performance and growth. MAS’ practices in the contemporary organizations include ABC, total quality management, budgeting, variance analysis, advice for decision-making, strategic analysis, balance scorecard, among many others (Karpova, Serikova & Tyschenko, 2019).

In order for an organization to ensure effective creation of information and better organization, it is supposed to transmit new information by implementing management accounting systems. These management accounting systems contribute to t innovation process in a number of ways depending on the organization. First, owners of Company-A prompted to hire mid-career managers who can be in the position to ensure effective creation of information by creating diversity or counter-cultures within an organization.

By doing so, the company has been in the position to attain internal development of products. This has been as a result of making a “policy of hiring mid-career personnel from other firms” who recommend a firm to make diversification in various field such as “Plain paper copier”. Second, management accounting system helps Company-A proposer again with increased average growth of about 20 percent. With the help of management accounting system, the firm has become well equipped to overcome various challenges in the projects of product development as a result of using diverse and large staff.

Therefore, by using management accounting systems, the organization is in the position to ensure effective interaction and accumulation of this personnel with different technology potentials. In addition, management account provided Canon Inc. an environment that addressed tension in the business operation hence resulting into creation and synthesis of new information. For example, Company-A employs SAP in decision making process in regards to accounting operations. Also, Apple Incc. Has utilize MAS to come up with new products that are cost effective.

Comparison of this finding with one other journal article about management accounting systems in another real-life company or companies

From the findings of Watts, Yapa & Dellaportas (2014), MAS has helped the managers of Company-A to obtain information about their technological trend. By training information ion an organization, the company is in the position to prepare its self for battle with its competitors in the market. This helped the organization to build a new production line as an organizations innovation.

In addition, by adopting management accounting system, the company was in the position to make use of different features which supported their computer machines which were faster, expensive and smaller(Watts, Yapa & Dellaportas, 2014). Therefore, management accounting helped Company-A to realize its competitors and mistakes thereby designing new innovation processes such as designing new computer features.

In comparison to Nwogugu (2015), that highlights Apple Inc. management accounting system. MAS has enabled Apple to realize many business ideas which were very important were ignored as a result of limited information transmission. With the help of management accounting system, the company is in the position to understand vital business jobs that were not considered earlier.

For example, “in the decision regarding the use of the 5.25 inch or 3.5-inch floppy disk, Jobs wanted the slower, lower-capacity 5.25-inch floppy disk, even though the engineers insisted that the 3.5 inches would be better (Nwogugu, 2015).” The outcomes of the 2 articles provide similar findings on how the companies employ MAS in decision making and product invention. However, the second article emphasizes more the invention aspect of MAS while the first one provides the MAS techniques and their application in manufacturing thus, differing a little on the deeper side.

Conclusions about the relevance of Management Accounting Systems in today’s competitive and (in most cases), uncertain business environment

MAS avails schemes for both manufacturing and utilities zones. Utilization of MAS practices not only increase e management competency but it also increases employees’ competency. It also facilitates aim determination, helps in plan preparation, and facilitation of better services to customers, it makes it easy to take judgment, enhance performance measurements, furnish effective management control, and make it possible to maximize profits, safety and security from trade cycle. All of which are important in ensuring that the companies thrive exceptionally well in their processes.

Management accounting systems keeps advancing and its involvement in the management of the organization has increased. It is therefore essential that management accountants comprehend not only how to account for MAS practices for example ABC, but also how to be aggressive in their implementation and management in order to achieve maximum benefit for the organization. In their study they investigated if the thirty finance managers of the Company-A knew of the significance of adopting the MAS practices.

The study also sought to establish the type of link between strategic initiatives and advancement in the manufacturing sector. Any firm should aim to obtain and enhance financial benefits and having empiric facts of the effectiveness of MAS practices should be vital for any organization. The findings indicate that twenty six point eight per cent of the manufacturing firms use a minimum of one of the MA practices. Furthermore the evidence shows that there was a higher consciousness level of the value of using the MAS practices among the finance managers, although the high level was not liked with the usage level of those practices.

Their study revealed a strong affirmative association between using MAS practices and advancement in organizational performance. From the above the articles, it is clear that MAS practices affect the organizations in one way or the other. However, the variables considered are not similar for every organization. Internationally, the lack of adoption of advanced MAS practices as reported by the studies, but incompatible with respect to single techniques. Therefore, a strong affirmative alliance between using MAS practices and organizational activities results in innovation and maximum production.

Specific outcomes or lessons learned from each of the two articles’ research findings that will be useful for management accountants in Australian companies to learn from

According to the first article by Watts, Yapa & Dellaportas (2014), management accounting systems are important tools in the creation of new information in an organization that arises from social interaction. In addition, the article indicates that the firms are responsible for creating a process which provides their structure. The article also indicated the interactive nature of the two firms in project development composed of different people from various backgrounds operating in intense continuous communication.

Watts, Yapa & Dellaportas (2014), indicated that companies develop different products. In this case, the four major lessons or outcomes from the research findings of management accounting are explained below in accordance with every organization. First, the research on Company-A, indicated that an organization’s management is based on syntactic data or information like profit analysis and ROI which create meaning or emergency in the information.

In addition, this system is supposed to create an organization’s meaning made up of stagnant bureaucracy. Further, the research indicates that different channels that are created for syntactic information communication are not recommended for transmitting semantic information. Therefore, research indicates that “In a syntactic channel, semantic information is interpreted as merely “fluff” without pragmatic use.” This implies that Australian companies should have a well-visualized structure that helps in the flow or transmission of an organization’s information without meeting barriers. By doing so, companies will be confined as being Number One (or Two) in every business we are in” or “keeping ROI above some arbitrary number”(Watts, Yapa & Dellaportas, 2014).

 Second, the research on Company-A Watts, Yapa & Dellaportas (2014), indicated that synthetic rules should not be miss taken by employees in an organization so as to achieve the business objectives and motivation of leaders. In case, Australian companies don’t put this issue into consideration, they will not be in the position to fix or minimize the risks that may arise in an organization’s rank and file. In addition, the situation may lower down an organization’s breakeven point hence limiting the creation of information which may affect the growth of a company. Therefore, Australian companies should consider these two findings obtained from the research concerning Company-A.

According to the other article by Nwogugu (2015), an organization’s leader helps in maximizing the creation of information for an organization. In addition, Nwogugu (2015), indicated that the leader of an organization not supposed to behave like a military commander but instead be a catalyst for better business performance. Further as per Nwogugu (2015), a leader in an organization is supposed to create a way of selecting useful people in an organization by at times making arguments with them and also assisting them to overcome different barriers thereby helping them attain their vision.

Therefore, leaders in Australian companies should be in the position to effectively perform their roles in the organization so as to ensure effective information transmission (Nwogugu, 2015). Finally, Nwogugu (2015), indicates that a small group of managers in an organization can create up a difference in the innovation processes. For example, Apple computing Inc., incorporated a small number of people to integrate the company’s software and hardware systems so as to ensure effective operations. With the help of intense interaction, the company was in the position to ensure effective information transmission. Therefore, Australian companies are supposed to ensure intense interaction between its members as a way of exhibiting their commitment.

References

CONG, Z., 2017. Discussion on the Rationality of “Accounting Standard for Business Enterprises No. 3 – Investment Real Estate”. Destech Transactions On Economics, Business And Management, (emem).

Hall, M., & O’Dwyer, B., 2017. Accounting, non-governmental organizations and civil society: The importance of nonprofit organizations to understanding accounting, organizations and society. Accounting, Organizations and Society, 63, 1-5.

Hoozée, S., & Hansen, S., 2018. A Comparison of Activity-Based Costing and Time-Driven Activity-Based Costing. Journal Of Management Accounting Research, 30(1), 143-167.

Karpova, V., Serikova, T., & Tyschenko, V., 2019. Management of the development of the accounting and tax accounting system for forward and futures contracts. Development Management, 17(2), 17-25.

Laureani, A., & Antony, J., 2016. Leadership – a critical success factor for the effective implementation of Lean Six Sigma. Total Quality Management & Business Excellence, 29(5-6), 502-523.

Nie, L., Bai, Y., Jiang, X., & Pang, C., 2014. An Approach for Level Scheduling Mixed Models on an Assembly Line in a JIT Production System. Applied Mechanics And Materials, 697, 473-477.

Nwogugu, M., 2015. The Case of Apple Computers, Inc.: Failed Strategic Alliances, Corporate Governance and Risk Management. SSRN Electronic Journal.

Prakash, J., & Chin, J., 2014. Comparison between production controls in multi-stage multi-product manufacturing environments: two case studies. Production & Manufacturing Research, 2(1), 477-500.

Skipworth, S., 2018. Empower employees to step away, with the greater goal of enhancing leadership. Enrollment Management Report, 22(2), 8-8.

Watts, D., Yapa, P., & Dellaportas, S., 2014. The Case of a Newly Implemented Modern Management Accounting System in a Multinational Manufacturing Company. Australasian Accounting, Business and Finance Journal, 8(2), 121-137.

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Corporate Finance and Governance

Corporate Finance and Governance

Title: Corporate Finance and Governance. Merger refers to the legal act of combining of two preexisting corporations to form a new company. Acquisition is the absorption of one company by another through the purchase of its assets. Bankruptcy, on the other hand, refers to an entity’s legal status of being unable to service the debts it owes to creditors (Boone, 2002). It occurs when the debtor files a petition with the bankruptcy courts. The petition can be filed by an individual or a corporation.

The Birds Limited Company, it can adopt various approaches to avoid the scenarios above. The business can avoid merger by reducing costs by consolidating departments within the firm. Streamlining and departments and responsibilities can help cut costs and prevent a possible merger. The company can avoid a potential acquisition by using the staggered board of directors’ approach (Clayman, Fridson, & Troughton, 2011). A group of directors is elected at different times for multiyear terms which can delay a possible takeover. The business can negotiate with its creditors to delay filing for bankruptcy and come up with a plan to settle their debts.

Business failure is caused by a range of factors that emanate from either the macro or the microenvironment. Bankruptcy is one cause of business failure. The fact that a business is unable to service its debts leads to the insolvent liquidation. A company cannot access financial assistance from the banks if declared bankrupt. Bankruptcy can seriously derail a company’s credibility.

Poor management can lead to business failure. Enterprises that are poorly managed suffer from mismanagement of funds. Issuing credit services to such corporations is hard, and the businesses end up closing down. The banks refrain from issuing credit services to such companies, and this has a telling effect on the banking sector. Operating a business in an industry that is not profitable can lead to business failure. High-profit businesses benefit the banking sector as much as the companies benefit from the banks. Such companies can boost the banking sector since they make up part of the key stakeholders in the industry.

Unprofitable businesses cannot have the spending power or the ability to acquire massive loans from the banks. The inability to acquire and service loans stagnates the development of the banking sector.

Corporate Finance and Dividend Policy

The dividend policy contains a set of guidelines a company applies to decide on the amount to pay the shareholders. Clayman et al.  (2011) acknowledge that the business has to consider a range of factors before settling on the appropriate approach when formulating dividend and capital structure policies. Business risk is one of the fundamental risks that put a company’s operations in jeopardy. The optimum debt ratio is lower in firms with a greater risk level. For instance, the risk level in a retail apparel company is much higher than that of a utility company. Therefore, the retail apparel company would have a lower optimal debt, a strategy to make the business attractive to the investors.

The company’s tax exposure is a determining factor in the formulation of the dividend policy. Debt payments are taxable. If a company’s tax rate is high, financing projects using debts is attractive because the tax deductibility of the debt payments helps the business shield some of the income from taxes (Clayman et al., 2011). Market conditions also impact the company’s capital structure condition. In a struggling market, investors may limit the company’s access to capital due to market concerns. The interest rates may be higher, and it would be advisable to wait until the market conditions return to a more normal state.

Corporate Finance Dissertation Titles
Corporate Finance Dissertation Titles

Financial flexibility is the company’s ability to raise capital in bad times. When raising capital in good times, a company must remain prudent to keep the debt level low. The lower the company’s debt level is, the more the financial flexibility it has. The growth rate also determines the approach the business uses (James Sunday, 2014). Growing businesses finance that growth through debts, their revenues are unstable and unproven. High debt loads are usually not appropriate. Established companies need less debt to finance their growth, and their incomes are stable. The established companies generate cash flow that can fund projects whenever they arise.

The board of directors is critical to the corporate finance governance and leadership in organizations. The BOD is the highest governing authority in the management structure at all publicly traded companies (Anand, 2008). The board of directors directs the company’s business. Good corporate governance is primarily based on the board’s leadership structure, board size, composition, director ownership and the roles and responsibilities. The board oversees the governance and the management of the business and to monitor the senior management’s performance closely. The BOD evaluates and approves the suitable compensation for the company’s CEO and approves the attractiveness of the dividends.

Among other core responsibilities of the board, it selects individuals to board membership and assess the performance of the board, board committees and other directors. The board reviews and approves the corporate finance and governance actions. The board also reviews and approves financial statement and financial reporting of the company (Anand, 2008).

It monitors the corporate performance and evaluates the outcomes by comparing them with the strategic plans and other long-term goals. The BOD controls the implementation of the management’s strategic plans. The Board reviews and updates the corporate finance practices to cater for developments within the micro and the macro environment. The BOD ensures that the business complies with internationally recognized governance standards. This has the implication that the BOD must be committed to upholding the best practices in corporate governance.

References

Anand, S. (2008). Essentials of corporate finance governance. Hoboken, N.J.: John Wiley & Sons.

Boone, A. (2002). Corporate finance policy. North Chelmsford, Mass.: CEO Press.

Clayman, M., Fridson, M., & Troughton, G. (2011). Corporate Finance. Hoboken: John Wiley & Sons, Inc.

James Sunday, K. (2014). Capital Structure and Survival Dynamic of Business Organisation: The Dividend Approach. JFA2(2), 20.

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FDI Policy – Foreign Direct Investment

FDI Policy – Foreign Direct Investment in the Mining Industry

FDI policy in the mining industry – Foreign Direct Investment (FDI) in economic terms refers to the investment that an investor makes in a foreign country in which the investor has a significant control of the business or company invested in. It applies in many sectors of the economy, including the mining industry. Different governments have varied policies that seek to govern and regulate the application of foreign direct investment in their respective countries. This exploration evaluates the situation of FDI in the mining industries in Nigeria and Argentina. In the analysis, the paper incorporates the Dickens’ framework to evaluate the impact that foreign direct investment has on the mining industry and determine whether the adopted FDI policies in the two countries, that is, Argentina and Nigeria serve in the best interest of the investors.

FDI policies in Mining

It is very important to consider a deeper understanding of the effects that mining activities will have in the country, both social, economic, political and environmental impacts before developing policy to regulate FDI in the mining sector. With the advent of globalization, each country tries as much as possible to engage in trade and allow trade in within their borders. This has led to global competition and the growth of Multinational Enterprises (MNE) and the Transnational Corporations (TNC). Many countries, especially the mineral rich countries have business opportunities within their borders to exploit their resources, but do not have the financial muscle to invest in such explorations. Due to the need for exploitation of the business opportunities within the borders amid limited resources to exploit them, governments enact policies that either encourage or restrict foreign direct investment in their respective countries (Johnson 2005, p. 15).

One aspect of the FDI policies that is very critical is the aspect of quality. The term quality in this regard refers to the foreign direct investment’s ability to enhance the welfare of the host country’s citizens in terms of social, economic, political and environmental wellbeing. Based on this requirement, governments, therefore, have to assess the impact of allowing FDI in the mining industry to take place within their countries and to device mechanism of mitigating the possible negative impacts of FDI policy, for the benefit of the citizens’ welfare (Vazquez-Brust et al. 2013, p. 2).

The impact of mining activities and the subsequent social conflicts depend on an array of factors, including the type of mineral mined. Some minerals when mined leave more devastating effect on the environment than other minerals. Secondly, is the technology, the technology used will determine the extent of destruction the extraction of minerals will have to the environment. Thirdly, the level of involvement by the MNCs in the mining activities will determine the impact it has on the economy. The fourth condition is the strategies of the mining companies; some companies involved in the mining business may want to optimize profit at the expense of the host country’s economic development. Finally, the culture of the host nation and its level of economic development among other conditions may also lead to conflict in the mining activities (Stiglitz 2007, p. 134).

In this respect, therefore, it is incumbent upon both the host nation and the international agencies to collectively evaluate these aspects of conflict and make decisions that are desirable and specific to every mineral extracted and the respective location of extraction. On the same breath, the researchers too have a responsibility to choose a theoretical framework, which encompasses all the conditions necessary for evaluation in order to address all research concerns (Gibson 2006, p. 19).

FDI policy in Argentina

Considering the FDI policies in Argentina, since the year 2001, Argentina has been encouraging huge foreign direct investment, especially in the mining industry. This policy followed the massive reforms that the country made in the mining code. Argentina is a developing economy having a substantial amount of mineral resources. At present, Argentina’s third most significant product for export is Gold. Gold has attracted many investors from outside the country to come and exploit the opportunity.

Nevertheless, since the government put these policies in place in 2001, with the government encouraging foreign direct investment, the mining reforms in Argentina have not fallen short of challenges. In many parts of the country, there has been an uprising resistance to the mining activities. Those who persistently resist FDI policy claim they are doing so based on the social and environmental factors. Today, about six provinces have succumbed to this public pressure to introduce legal bans on open-pit mining within their provincial zones. This public resistance has been growing and rapidly spreading manifesting lack of consensus between the government and the public on the mining policies (Auty 2001, p. 36).  

This conflict between the Multinational enterprises and the public in Argentina is a clear manifestation of varied perception about the quality of FDI policy, especially in the mining sector. Whereas the companies consider boosting the local economy as an improvement of the welfare of the citizens, citizens, on the other hand, consider the effect mining activities have on their environment and the subsequent effects these negative externalities to the environment extend to affect the society. Even though there is a need for the alignment of quality of FDI between the local community, the government and the respective MNEs, it is not easy to reach a common ground on the quality of FDI, which is a relative measure that depends on other aspects of the prevailing welfare standard. This is also because, the perceptions of welfare of the citizens vary from time to time and from individual to individual depending on their expectations, level of knowledge they possess and the overriding cultural values of the community (Ali 2003, p. 70).  

One case in point that supports the gap in perception of citizens about the quality of FDI policy is the Esquel case. In this case, Meridian Gold, which is a Canadian multinational corporation, secured rights to mine a gold deposit in Esquel, a town in the province of Chubut at a cost of investment of over 200 million US dollars. The provincial government approved all the standards and environmental impact assessment reports for a potential mine. The provincial government gave the project a green light terming it as a high quality FDI, being environmentally friendly and useful economic development in the province.

Nevertheless, the community had a completely different perception. According to the community, the project was low quality FDI, dangerous to the environment, economically weak and if implemented would divide the society. The subsequent social unrest that followed compelled the provincial government to organize a referendum in 2002 in which, 80% of the citizens overwhelmingly voted against the mining activities. In the year 2003, as the social pressure continued to pile against mining activities, a judge ruled against any mining project in the province, forcing the Meridian Gold to drop the project (Mutti et al. 2012).

FDI policy in Nigeria

 Similarly, the FDI policy in Nigeria as well has had a long journey. Before the year 1988, the Nigerian government was still skeptical about allowing FDI into Nigeria on grounds that it deemed FDI as a scheme for economic and political control. In 1972, the government outlined a regulatory policy on FDI by establishing the Nigeria Enterprise promotion Decree (NEPD). This declaration was meant to regulate rather than promote the foreign direct investment in Nigeria by limiting foreign equity participation in some sectors to a minimum of 60 percent. By the year 1977, the government again made a declaration further limiting the participation of foreign equity to 40 percent in Nigeria’s business. These declarations implied that Nigeria had a restrictive FDI policy between 1972 and 1995. By the year 1988, the Nigerian government made some structural reforms that initiated the beginning of eliminating the restrictive policy on FDI. The government established the Industrial Development Coordination Committee to act as an agency responsible for the facilitation and the attraction of the flow of foreign investment (UNCTAD 2009, p. 89).

Subsequently, in the year 1995, the government repealed the restrictive NEPD and made a new one known as the Nigerian Investment Promotion Commission, with an aim to encourage foreign investors to come to Nigeria and set up businesses, which they could have 100 percent control. The only condition was to provide relevant documents and the NIPC would approve the application for a business permit within fourteen days. Other declarations followed thereafter promoting and encouraging FDI into Nigeria with some having free regulations on dividends accrued from foreign investment. In addition, the Nigerian government adopted an Export Processing Zone to enable interested investors establish businesses and industries within certain zones (Ayanwale 2007, p. 24).

The FDI friendly policies adopted by the government of Nigeria saw a steady rise in the foreign direct investment flow into Nigeria since 1995 in different sectors. There was also a rise in the foreign direct investment in the mining industry in Nigeria, which followed the putting up for sale of the Nigerian national petroleum corporation together with its branches. The civilian administration that began in 1999 also inspired the deregulation of the oil industry, subsequently opening up the mining sector for more FDI inflows (Albaladejo 2003, p. 43).

The Dickens’ Framework

Having looked at both the Nigerian and Argentina’s policies on FDI, it is evident that both countries have had their challenges in the implementation of these policies. Considering the Dickens’ framework, the manifestation of conflicting interests and perception between citizens and the Multinational in the execution of mining projects is a confirmation of a dynamic collaboration and conflict between TNCs and the government agencies. According to Dickens (2003, p. 275), in the foreign direct investments both the TNCs and the host government need each other.

However, they admit that the ultimate objectives of the host government and the MNEs significantly differ. For example, the aim of a host government is to ensure an increase in the gross domestic product (GDP), while the MNCs principal aim is to maximize profits and increase the value of shareholders in the investment. In his framework, Dickens admits that in the foreign direct investments, multinational enterprises can have both positive and negative impacts on the host country’s social, economic, political and environmental conditions. They may exploit or expand national economies, distort or improve economic development, create employment opportunities or destroy jobs, introduce and spread new technology or prevent the wider use of new technology. The MNEs can also contribute to the destruction of the environment through pollution and destruction of the landscape through mining activities, or participate in the reconstruction and the creation of a sustainable environment through initiatives aimed at sustaining the environment (Dickens 2003, p. 277).    

According to Dickens (2003, p. 278), there are six major areas in the host country’s business environment that MNEs may have an impact on, and these include the area of technology, employment and labor related issues, industrial structure, capital and finance, trade and linkages and the environment. In the area of environment, the impact could be increased soil, water and air pollution, effects on urban settlement, change the extent of natural resources use among other impacts. On the trade and linkages, the effects may include changes in the propensity to export and import resources and changes in the use of local suppliers.

On the employment and labor issues, the effects could include changes in the volume of employment, type of employment in terms of skills and gender, wages and recruitment levels, labor relations and affect the stability of the labor market. On capital and finance, the impact could include changes in the initial inflow of capital, changes in the capital raised locally, profits retained locally and transfer pricing among other impacts. In the industrial structure area, the impact could be effects on the industry concentration, changes in the competitiveness of the local companies and impact on the creation of new local companies. Finally, in the area of technology, the impact could affect the extent of technological transfer, determination of appropriate technology and may lead to additional cost on the host nation (Yakovleva 2005, p. 45).

FDI Policy Dissertation

Dickens’ framework also has a mechanism for assessing the extent of impact of MNEs activities in the host nation’s economy. In assessing the impact of MNEs, Dickens looks at the level of control that MNEs have on the host, the increase or decrease in the general welfare, the overall macroeconomic conditions, receptivity, cultural, social and political conditions, capital mobility technology and stage development, and the extent of natural resources availability among other factors (Gibson 2006, p. 18).

The framework as elucidated by Dickens is quite relevant to the two scenarios presented both in Argentina and in Nigeria regarding FDI policies. In Dickens’ assumptions are in three perspectives, first, he assumes that in FDI deals, the government always represents the community and mediates the relationships between the MNEs and the Citizens. However, in most developing economies, this might not be the case because the community always are directly involved in the affairs deemed to directly affect their livelihood and environment (Epstein 2008, p. 113).

Several environmental studies reveal that the conflict arising when FDI deals are negotiated is because of the adamant tendency by the state and the MNEs to ignore the role played by the communities in this process. This leads to a direct involvement between the government and the MNEs, which most of the time leads to environmental and social inequalities (Martinez 2002, p. 19). In order to eliminate any conflict arising from the community, it is imperative for all the stakeholders to engage collectively in the assessment of the quality of the FDI policy in terms of scientific, MNEs, Community and government assessment. Any gap that continues to exist between the projects’ evaluation will make conflict resolution among these parties very difficult.  

The second assumption by Dickens is that the ultimate objective of the MNEs is to maximize their profit and increase the value of shareholders. This assumption overrules the fact that some firms may also aim at strategic and ethical undertakings to do more proactive activities with the aim of maximizing their profits, as well as reaping benefits to the community and the environment (Vazquez-Brust et al. 2013, p. 7).

To bridge the gap between the divergent interests of the parties involved in the FDI arrangements, the government together with other stakeholders can develop a code of ethics to govern the conduct and activities of the MNEs. Similarly, the MNEs have a good avenue of mitigating the ill perception of the community by participating in the corporate social responsibility practices to give confidence to the community that their interests are considered. Corporate social responsibility is a very significant tool that firm can use to develop the businesses in the host country. By taking part in solving the societal problems, firms will not only build the confidence of the local people, but also create a sustainable environment in which they guarantee and secure the future of their businesses (Elliot & Cummings 2006, p. 87).

The third assumption Dickens is making in his framework is the existence of two variables that depend on each other, that is, the truncation effects and the increase/decrease in welfare. Truncation effects refer to cultural, economic and institutional aspects of the FDI policies that negatively affect the host country. The international economic analysis indicates that it is possible to reconceptualize truncation effects as institutional effects of the foreign direct investment, which contain robust effects on the welfare of the host country. They should be considered as influencing the welfare too rather than being treated separately from factors that increase or decrease the welfare (Stieglitz 2007, p. 43).

According to Mold (2004), the truncation effects can have an impact on the host country in two forms, that is, governance and social cohesion. Wealth and income distribution is one area where MNEs have a potential to bring social cohesion because research indicates that there is a strong connection between MNEs activities and the increase in the inequalities. This understanding of the inequalities has informed the engagement between the governments of Argentina and Nigeria and the MNEs in the FDI projects, in order to boost economic development and reduce the adverse effects of social and economic inequalities in their countries.

This analysis reveals remarkable undertakings of both Argentina and Nigerian government in trying to facilitate foreign direct investment in their respective countries. The policies the two countries encourage FDI in their mining industries with a view of exploiting the opportunities available and bringing in capital to their economies to the benefit of their citizens. However, there is still need to involve the citizens in the decision-making process and in the evaluation of the quality of the FDI in order to reduce the conflict arising from the community. The FDI projects could be good for the economic growth and development and may be well intended for the public, but failure to involve them in the evaluation of such projects is a recipe for misconception of the projects leading to resistance (Ali 2003, p. 72).

The mining industry is a very delicate industry in that its activities directly affect the natural environment before such activities benefit the society. This calls for a delicate balance between approval of mining projects and the execution of the same considering the need for a sustainable environment that will accommodate the citizens and the business for posterity. The bottom line of every government as representative of its citizens is to protect their interest of its citizens, which is what the government of Argentina and Nigeria is doing in their FDI policies.

Conclusion

The global economy is becoming more competitive and every nation intends to have a competitive edge in the market. Emerging economies such as that of Argentina and Nigeria with the massive endowment of the natural resources, but no capital to invest in exploitation have a responsibility to create an enabling environment. The enabling environment includes developing policies that encourage foreign direct investment to bring in foreign capital and help exploit the natural resources for economic development.

Similarly, in order to have a successful FDI policy, all the stakeholders affected by such policies such as the community, the government and the MNEs need to engage collectively in trying to develop a common perception of the impact of any project before its implementation. By doing so, conflict of interest and varied perception on the quality of FDI will definitely be resolved. The MNEs too have a responsibility to embrace corporate social responsibility in order to protect the environment for a sustainable business.

References

Albaladejo M 2003, Industrial realities in Nigeria: from bad to worse. QEH Working Paper, Number 102, Queen Elizabeth House, London.

Ali, S.H 2003, Mining, the Environment and Indigenous Development Conflicts. The University of Arizona Press, United States

Ayanwale A.B 2007, FDI Policy and Economic Growth: Evidence from Nigeria. AERC.

Auty, R.M. (2001). Resource Abundance and Economic Development. Oxford University Press, Oxford.

Dicken, P 2003, Global Shift: reshaping the global economic map in the 21st century, 4th ed., Sage Publication, London.

Elliot, M., & Cummings, G 2006, Exploring the risks: attitudes to risk in the global mining sector. Ernst & Young.

Epstein, M.J & Buhovac, A 2008, Making Sustainability Work: Best Practices in Managing and Measuring Corporate Social, Environmental and Economic Impacts.

Gibson, R 2006, Sustainability assessment and conflict resolution: reaching agreement to precede with the Voisey’s Bay nickel mine. Journal of Cleaner Production , vol. 14, no.3-4, p. 334-348.

Johnson, A 2005, Host Country Effects of Foreign Direct Investment. The Case of Developing and Transition Economies. JIBS Dissertation series

Mold, A 2004, “FDI Policy and Poverty Reduction: A critical reappraisal of the arguments,” Région et développement, vol. 20, p. 92-120.

Mutti D., Yakovleva N., Vazquez-Brust D., & Di Marco M.H 2012, “Corporate social responsibility in the mining industry: Perspectives from stakeholder groups in Argentina.” Resources Policy, vol. 37, no. 2, p. 212-222.

Stiglitz, J 2007, Making globalization Work, Sage, London

UNCTAD 2009, Investment policy review Nigeria. United Nations: New York and Geneva.

Vazquez-Brust D., Yakovleva, N., & Mutti D 2013, Mining FDI in Argentina: perceptions and challenges to sustainable development. University of Manchester, England.

Yakovleva, N 2005, Corporate Social Responsibility in the Mining Industries. Corporate Social Responsibility Series. Ashgate Publishing Limited . England.

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Cryptocurrency Financial Operations

Consumer Perception of the Effectiveness of Cryptocurrency in Day To Day Financial Operations – Dissertation

Cryptocurrency has not received that much attention from IS (Information Systems) and as a consequence of this, there is still a gap in the literature with a great potential for research, specifically how the technology fares within the consumer context. Most notably, this dissertation is interested at the traction Cryptocurrency is gaining in today’s economy and how consumers are responding to this innovation. This dissertation will broadly present the evolution of Cryptocurrency, its financial characteristics, and what factors influence its value formation. The focus will then shift at the underlying models that are used both in a practical and academic setting to illustrate the factors that contribute to the acceptance and diffusion of a new technology. The conceptual model will be based on the Innovation Diffusion Theory of Everett Rogers.

Using a specifically designed questionnaire, consumer opinions are quantified in order to ascertain current attitudes and beliefs. Furthermore, after examining specifically designed hypothesis that deal with technology adoption, it was discovered that pivotal factors such as complexity, relative benefits and education play a distinct role in the uptake of Cryptocurrency. This is important because as a new technological instrument, Cryptocurrency opens the door to a number of opportunities for consumers, but only after overcoming a number of challenges and limitations that might prevent it to be accepted.

Cryptocurrency Dissertation
Cryptocurrency Dissertation

Thus, the aim is to investigate the monetary characteristics of a financial innovation in conjunction with the sociological component. This will lead to a better understanding of the constructs that influence the decision to adopt a novel technology by looking at a number of social and psychological factors. An overview of the leading technology adoption theories is provided that will address a number of cognitive, effective and contextual factors. While the study could potentially draw from all these theories, the Innovation Diffusion Theory of Everett Rogers will serve as a foundation, and all the assumptions will be based on this particular model.

Dissertation Objectives

  • What is the consumer response regarding the use of cryptocurrencies in day to day financial operations?
  • The main objective of this dissertation is to determine the level of consumer awareness, perception and degree of utilisation.
  • What are the main factors that influence the consumer intention to adopt cryptocurrencies?

Dissertation Contents

1 – Introduction
Background and Context
The Rationale for the Research
Research Objectives

2 – Literature Review
The Evolution of Cryptocurrency
What Is Cryptocurrency And What Is It Based On?
What Gives Cryptocurrencies Value?
Difference between Cryptocurrency and Traditional FIAT Currency
Cryptocurrency Nomenclature
Advantages and Disadvantages in using Cryptocurrency
Advantages
Disadvantages
Technology Adoption Theories
Hypothesis

3 – Methodology
Research Philosophy
Research Approach
Research Design and Strategy
Sample Size and Population
Ethical Considerations
Data Analysis

4 – Results
Demographics
Familiarity
Adoption Factors

5 – Research Findings and Discussion

6 – Conclusion

References

Appendix
Questionnaire

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Management Accounting Process

Management Accounting Process

Title: Management Accounting Process. Management accounting entails the process of identifying, analyzing, recording, and presentation of informed management information to the different management in entities so as to make informed decisions. The informed decisions are both short and long term ones. The information provided may be wide covering different areas like the sale made in ascertain period and the budgets, the growth in profitability, customer base and payments made. The information being provided relates to the management, is always timely and is useful in making the entity’s decision.

The managerial information is critical in making different strategic decisions, helps in making performance decisions which are involved in creating an area of comparing the profits of the entity with previous periods and coming up with better techniques of improving on the same (Drury, 2013, p.17).The organization is also involved in the creation of risk managing actions on different lines of management whereby this will be through ensuring that the entity ventures in different business through taking risks which may lead to better performance.

The data which is collected by the different management accountants are involved in the process of planning, performance rating and maintaining operational status. Planning enables the different entities to know what to produce and when. This is aided by knowing the amount of the raw materials being needed and the labor force too. The planning process enables the entities to take into consideration performance rating which entails comparing the input rate for the different employees and the resultant profit.

Maintaining the operational status enables the different management to know the cost incurred in the production process and keeping a record of what is occurring in the entity. The costs incurred in the production process can be identifying from the different raw materials and the input in the production process based on the labour force and the time employed. The improvement in the operational status of an entity will hence lead to achievement of different set target which will motivate the different management personnel and the staff too. These goals can only be achieved with good setting of strategies by the management accountants from the initial states and making the different responsible personnel on what to do. The different roles assigned will at the end evaluated and the achievement of the different target evaluated too.

Role of Management Accountants

The traditional management accountants role were mainly geared towards cost control and reduction but the Strategic accountants in the current era are focused on a wide area of activities like ensuring that there is improved competitiveness, identifying new opportunities in different markets and ensuring that the decisions being made are longterm and of benefit to the different organizations (Hilton, 2013,p.39).The roles of the management accountants have hence highly changed in the current period as compared to the past. This has been brought about by the increasing level of technological advancements, increased business sizes and the existence of different opportunities in different areas. The following are the different roles played by the Strategic management accountants in the current world which are quite different from the traditional management accountants.

Keeping a Prospective View in the Entity

The management accounting process management is employed today by the strategic management accountants is of more benefit as compared to the traditional one resulting from the different changes in the global environments. The management accountants today use information which is more broad-based and doesn’t consider only internal information in an organization and is highly prospective. The broad-based information has been made through having a broad information base through the enterprise resource planning systems. The newly implemented systems by the management accountants enable them to be able to keep track of huge amounts of data relating to different parties. The data can be kept for the different customers and suppliers of the entity which will enable them to keep a track of the active and frequent customers and suppliers too. The data enables the different management accountants in ensuring that the make the payments to the different suppliers in time and hence they don’t build up their balances which may lead to the inability to settle them in future.

Keeping this track enables the different suppliers need to be met in time and hence that will also increase and improve on their supply of the different resources to the entities as there will be no fear of losing any amount upon their supply. The customers’ data can have also been kept to track the different purchasing habits and in case some of the customer’s claims of any balances owed to the entity, it can be easily traced (Malmi,2016, p.32).This has enabled the entities to be able to identify the different measures to meet their customers’ needs and overcome competition in their environment.

The use of the prospective data on how the entity may be performing with the different customers and suppliers has enabled the different management accou tan ts to come up with different strategies of maintaining the existing customers and suppliers and acquiring new more ones and hence being able to open up in a wider area which leads to an improvement in their competitiveness.

Management Accounting Create Competitive Focus

The strategic management accountants are involved in creating a competitive focus in their different environments as compared to the manufacturing focus of the tradition alk management accountants. The traditional management accountants were focusing only on the manufacturing process and the monetary value benefit they will get. This made most of the entities produce different products with the concerned of the value they would acquire, while in the new era the management accountants are taking into consideration the value of the different non-financial information in an entity like the predicted sales, the market share, the potential competitiveness.

The environmental concerns which have no direct costs but have a great impact on the public and the future generations are also taken into consideration (Hasniza Haron,2013, p.104).The consideration of the different budgeted sale has enabled different entities performance to be high as they are forced to work on tight schedules to ensure that they meet the different standards. The entities are also involved in ensuring that these deadlines are kept in track and improvements in the quality of the products with far pricing which lead to an improvement in their sales.

Taking into consideration the different aspects of their market share in the market has enabled the different entities to keep information on their performance and hence be able to track on the weak areas where improvement is highly needed. The market share size enables the different entities to borrow more from their competitors in getting to identify the gaps which exist between them and the competitors too. These gaps are core in ensuring that the entities are to out-win the other customers in the wider competitive market. The new strategic management accountants are able to identify the different non-direct cost acts which have an impact on the entity now and in the future.

The management accounts in the current era are involved in ensuring that they meet the different cost acts which are involved in creating good relations with their different stakeholders. These activities are like being involved in the different community development projects and providing incentives to the different customers and suppliers too like providing trips to the customers who made the high purchase in the entity (Malmi, 2016, p.34). These incentives create a good gesture to the different stakeholders and hence the organization can easily be in a line of attracting and maintaining more different customers and stakeholders too.

Management-Accounting-Dissertations
Management-Accounting-Dissertations

Acquiring the different information of stakeholders from the different periodicals, business magazines and newspapers to have enabled the management accountant to be able to keep a track of the potential market opportunities in the different environment. Benchmarking in the different entities which have been performing well in their environments leads to the entity acquiring the different new skills which enable them to be more competitive and hence improve on their performance.

Identifying New Economic Possibilities

The strategic management accountants are involved in learning more of the potential economic possibilities which enable them to create a new marketing area and acquiring more new market. The new possibilities are obtained from the different researches which are carried out by the accountants and the teams in their entities. The strategic management accountants are involved in researching more on the different changes in the accounting and reporting field, the new potential markets and the possibilities of any challenges in the future.

Researching on the different possibilities has hence led to the creation of a wider line of management techniques which are enabling the different organization thrives well in their markets. The researches on the increasing demands of the different products of an entity enable the different manufacturers to come up with more efficient production mechanisms which will not only cut costs but also increase on the quality of the different commodities (Goretzki,2017, p.20). Researches on using the computerized production techniques in different entities has enables the organizations to cut costs on manpower as a lot of data can be easily compiled through the use of computers by only a few individuals.

The cut cost can be employed in different fields like in research or improvement of the production process in the entities. The entities are also able to identify new potential marketing areas in different zones. This will hence lead to more improved production process by the different entities which will mean that there will be a high level of increasing quality to attract more customers. The new marketing areas will also lead to more researches on how to target supply over a wider market scope which will lead to more research in the area of the population growth with demands of the different products. This leads to the opening of different branches by the different organizations in the different parts so as to be able to efficiently supply to their potential customers (Malmi,2016,p.38).

Management Accounting Decision Making

The strategic accountants are involved in creating an environment of tracking the past and ensuring that they focus on improving on the same. This has been enabled through having different lines of sequence and pattern analysis in the different entities. The different entities are hence employing the use of the Target cost techniques in planning their different daily operations. This technique includes the use of patterns in terms of customer growth, growth in sales and profitability.

These are carried out on a monthly basis and the trend of the movements are extrapolated over the other years and the final amounts are compared to the budgeted ones (Puyou,2018, p.13). The use of the sequences and patterns has enabled the different entities in creating a room of potential improvement in performances are the different operation lines are considered while carrying out this.

The strategic accounts considered the possibilities of improving on the past sequences and patterns since the different cycles like increasing more technologically advanced production machines which will cut staff costs. The accountants are also involved in creating an environment in which the different patterns which have been existing can be employed in making decisions on the future performance of the entity which will be through ensuring that the past weakness is sealed. The accountants are also involved in enabling the management know the area where more cost is being incurred in the running of their business and hence come up with new techniques on how to cut on the same while maintaining or improving on their values. The sequence of the decisions being made are all long term and are of great impact on the entity.

Identifying New Opportunities

The strategic management accountants are involved in making decisions of relative positions as compared to the traditional management accountants who were only focused on a single entity. The strategic management accountants are hence involved in creating a decision on different entities which involves coming g up with plans on how to come up with new entities in different areas. Making decisions for a wider scope has hence enabled most of the strategic accountants to come up with new plans of creating a new potential business in different areas.

Decision making on a wider scope leads to the increase in the level of acquiring more new techniques in running the entity which leads to more improvements in the different areas of management (Puyou, 2018 ,p.22) Making decisions on different areas enables the accountants to learn more on different line businesses which are of advantage to the whole entity. this will hence mean that the final decisions will be of great importance as this will lead to more borrowings on the different areas which lead to better performance. Making decisions in the different entities leads to the creation of more opportunities in identifying new business opportunities which will be of great importance to the different operations in the entities.

Creating Linkages With Management Accounting

The management accounts take into consideration of creating different linkages. The creation of linkages is made through creating new market opportunities in the different business areas and also in meeting different accountants globally. There have been different conferences which are held for the different accountants globally which lead to the creation of linkages in sharing the different management techniques by the different accountants. Traditionally, the different accountants were not able to create linkages in their operations as they were overlooking them. The creation of the linkages creates an opportunity for different accounts in acquiring more new skills in learning their different management roles (Janin, 2017, p.16). The creation of the linkages makes the different accounts to be in the line of making new opportunities in their operations and hence be able to know the different changes which have occurred in the new management positions. Creation of linkages in different matters in an entity leads to the creation of more room for embracing different changes in an entity.

The linkages enable different accountants to link different acts to an entitled cause. This will hence create a room for the different accountants to know the cause of different challenges in an entity and also come up with the solutions to the same challenges.

 The management accountants are hence core in running the different entities as they are considered when there is an arising in a challenge in the management in terms of operations and in determining the performance of the entity in future. The strategic management accountants are hence core in ensuring that the different entity operations are running efficiently while ensuring cost-cutting measures and quality of the different products. The accountants are hence core in ensuring that the different set targets are achieving and helping in guiding on how the same should be achieved.

Conclusion

Management accountants are very core in the running of an entity and their contributions towards the performance of an entity should always be appreciated as they are core in guiding on the planning, decision making and implementation of the different processes too.

References

Drury, C. M. (2013). Management and cost accounting. Springer.

Goretzki, L., & Strauss, E. (Eds.). (2017). The Role of the Management Accountant: Local Variations and Global Influences. Routledge.

Hasniza Haron, N., Kamal Abdul Rahman, I., & Smith, M. (2013). Management accounting practices and the turnaround process. Asian Review of Accounting21(2), 100-112.

Hilton, R. W., & Platt, D. E. (2013). Managerial accounting: creating value in a dynamic business environment. McGraw-Hill Education.

Janin, F. (2017). When being a partner means more: The external role of football club management accountants. Management Accounting Research35, 5-19.

Malmi, T. (2016). Managerialist studies in management accounting: 1990–2014. Management Accounting Research31, 31-44.

Maskell, B. H., Baggaley, B., & Grasso, L. (2016). Practical lean accounting: a proven system for measuring and managing the lean enterprise. Productivity Press.

Otley, D. (2016). The contingency theory of management accounting and control: 1980–2014. Management accounting research31, 45-62.

Puyou, F. R. (2018). Systems of secrecy: Confidences and gossip in management accountants’ handling of dual role expectations and MCS limitations. Management Accounting Research40, 15-26.

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