The changing role of an accountant

Question 1

Burns and Scapens - Drivers of change

Answer 1

Burns and Scapens identified the drivers for the changing role of the modern management accounting these divers are

Technology - data availability needs have exploded to more detail exploration, enabling the accountant to explain why the business financial results are changing and enabling the accountant to contribute much more to the decision making process.

Competitive forces - rate of change of competition has increased meaning that response has to be nimbler and faster and more flexible. As a result relying on historic financial accounting figures is no longer acceptable and so the role of the management accountant has come to fore.

Management structures - As a result of the above the structure of the organisations have also changed. less transaction recording and more people being involved in the business operations. Accountants are less isolated than they were previously and more involved in decision making rather than involved in recording the consequences. e.g. business partner modern role includes
1. more involved in decision making
2. financial and non financial factors considered
3. More focus on the future
4. more integrated in the business.

Traditional role involved
1. Budgeting and control
2. Focussed on financial consequences
3. Historic reporting
4. Internal focus
5. Located separately

Question 2

Integrated reporting

Answer 2

Annual report produced by companies often include more information these days.

Non - financial performance
Risks facing the business

Providing data, suggesting measures for inclusion in annual statements can be carried out by performance manager.

Different types of capital.
1. Manufacturing capital - reporting the effective and efficient use if machines, buildings and significant tools.
2. Intellectual capital - reporting level of employee knowledge
3. Human capital - employee skills and motivations
4. social and relationship capital - reporting the condition of the relationships the business depends on.
5. Natural capital - reporting on renewal and non renewable resources

Exam angle -
1. should the area be reported on - is it relevant to performance
2. What data would be needed?
3. How could the capital be measured?

Question 3

Exam Slide

Answer 3

1. Be aware of changing role of Management accountant in business
2. This is going to need a different set of sills - data analysis, interpersonal skills, collaboration, decision making
3. Burns and Scapens attempted to explain what the forces for change were
4. Technological change is encouraging data led decision making
5. competition in a much proactive world
6. management structure has changed to force accountant from their office to the wider community
7. Role now more forward looking, data driven, decision oriented
8. Management accountant likely to be involved in development of integrated reporting to discuss relevance to the business, data needed and measures to be used.
9. Areas of interest include business risks, strategies and non financial performance
10. Be aware of different forms of capital and how management accountant can help in their disclosure.