Management Accounting And Control Practices In Lean Manufacturing

Discuss about the Management Accounting and Control Practices in Lean Manufacturing.

• Job websites where the positions were found are –

1. gov.au
2. com.au
3. com.au
4. com.au

• All of the above positions for cost accountant or management accountant were found in various industries like health sector, construction sector and finance sector. None of the above mentioned positions were found for government sector.
• Out of the 10 positions found above total 8 positions were for management accountant and rest 2 positions were for cost accountant. Therefore, out of the searched positions maximum were for management accountant post.
• Common requirement were ability to perform annual budgeting, maintenance of monthly performance report, providing strategic analysis. Selection criteria for the posts were professional accountant degree and experience in similar posts. Common responsibilities were to assist the management with the performance based reporting for finance that includes cost management, forecasting, pricing, and strategic financial planning
• Common requirement were ability to perform annual budgeting, maintenance of monthly performance report, providing strategic analysis. Selection criteria for the posts were professional accountant degree and experience in similar posts. Common responsibilities were to assist the management with the performance based reporting for finance that includes cost management, forecasting, pricing, and strategic financial planning and degree in preferably CA or CPA.

1. Cost and management skills

• The most common cost and management accounting knowledge and skills required for the above mentioned positions are Annual budgeting, maintenance of monthly performance report, providing strategic analysis (Alviniussen & Jankensgard, 2015).
• This knowledge is required as through the budget preparation and analysis the company can analyse the performance of the company and can compare it with the actual result. Further, the budget is the planned expenses and revenues that allows to allocate the funds for particular purposes (Eldenburg et al., 2016). This is further required as the financial reports and statements are important for analysing the financial health of the business. These are also crucial for obtaining finance, making proper business related decisions and setting goals. Cost accountant or management accountants are the persons who can make the necessary analysis with the available information and can assist is preparing the financial statement of the company.

1. Less common management and cost accounting skills

• Preparation of Hyperion Financial Management was the less common skills required for the cost and management accounting posts.
• This skill was least required as compared to the other as the Hyperion Financial management provides the financial reporting and consolidation that allows reporting and consolidating the financial results rapidly, reducing the compliance cost, meeting the requirements of global regulations and providing confidence with the numbers. However, the system is not very common and not used by many companies yet. Therefore, this skills requirement are still less as compared to the skills of Annual budgeting, maintenance of monthly performance report, providing strategic analysis

1. Challenges faced by management accountants

Management accounting is the function related to internal business that identifies the internal cost for the purpose of decision making. Production and manufacturing companies frequently use the management accounting for allocating the production cost to services or goods produced by the company (Brooks, 2015). However, the management accounting faces various challenges while performing their responsibilities. They are –

• Facts – challenges involved with management accounting are associated with recording, collecting and reporting the financial information gathered from various departments or divisions. Further, the cost allocation requires information regarding. However, this information is required from various departments and it is not always possible to collect the exact information from all the required sources (Schuster, 2015).
• Features – budgeting is the crucial tool used by the management accountant and it is used for planning the annual budget. However, this is challenging for the management accountants as they have to review the historical information for preparing the accurate budget for the upcoming financial years (Fullerton, Kennedy & Widener, 2013).
• Time frame – while recording the financial information management accountant does not depend on the individual period of accounting. It is the continuous procedures that shall be managed properly by the employees and owners. Further, the financial information shall be separated carefully for ensuring that valid, timely and relevant information is considered for management reports (Hilton & Platt, 2013).

1. Specific topics under ACCT 6004

• Various topics learnt under AACT 6004 are the as follows –
• Explaining the importance and nature of management accounting and the current responsibilities and roles of management accountants
• Analysing and identifying organizational and ethical issues
• Identifying and categorizing the nature of different costs, cost behaviour and cost objectives
• Applying techniques of cost accounting for calculating the cost object and analysing it
• Applying cost information to planning, decision making and controlling
• Critically evaluating qualitative and quantitative costing information for management decision making
• Subject outcomes are entirely aligned with the job requirements as the learning outcomes of ACCT 6004 are completely based on the cost and management accounting and the above mentioned jobs are also found in respect of cost and management accounting.

1. As per my view the crucial requirement of cist management that have not been taught under the course of ACCT 6004 is the cost allocation process like traditional method or activity based costing. According to my knowledge, if the cost accountant or management accountant knows the allocation method of resources they will be in better position to allocate the cost appropriate manner. Therefore, it should have been covered under the subject ACCT 6004

Reference

Alviniussen, A., & Jankensgard, H. (2015). Enterprise risk budgeting: bringing risk management into the financial planning process.

Brooks, R. (2015). Financial management: core concepts. Pearson.

Eldenburg, L. G., Wolcott, S. K., Chen, L. H., & Cook, G. (2016). Cost management: Measuring, monitoring, and motivating performance. Wiley Global Education.

Fullerton, R. R., Kennedy, F. A., & Widener, S. K. (2013). Management accounting and control practices in a lean manufacturing environment. Accounting, Organizations and Society, 38(1), 50-71.

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

Schuster, P. (2015). Cost and Management Accounting. In Transfer Prices and Management Accounting (pp. 1-4). Springer, Cham.

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