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Contrast the traditional role of the management accountant with that of the Business partner. Explain how the role of Business partner has evolved to support the strategic management process?
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The role of the management accountant was traditionally limited to the provision of financial and non-financial information to the management for taking decisions (Aver, Aaver and Cadez, 2009). In the 1980s, there was a lot of criticism of management accounting for being more focused on operational issues and providing no help in the strategic decision-making process. Simmonds Key, a management accounting expert, introduced the concept of strategic management accounting (Botes, 2009) and defined it as the process of supply of expert management accounting information about the competitive environment for use in planning, implementation and monitoring of the strategy. Over the past thirty-five years, the world has transformed into a global economy, and the changing business environment has brought a paradigm shift in the role of management accountant also. Now expectations have moved toward a new position of management accountant in which the contemporary management accountant acts as a consultant, integral to strategic decision making, rather than only acting as a supplier of financial data and controller of business operations (Cooper and Dart, 2013). Most of the literature suggests that instead of acting as a mere bean counter, the management accountant need to become a more proactive business consultant or a business partner to management (Wolf et al., 2010). The traditional role and the contemporary role of management accountant are discussed as below:
There are two descriptors of the role of management accountants – traditional role and modern or contemporary role. The detailed discussion and contrast of these two roles are as follows.
The traditional role of management accountants has been founded on the work of Anthony and Robert N., which describes the role of the management accountant as a book-keeper, information provider and controller. He acts as a channel through which the economic and financial information flows to the top management efficiently and effectively. The focus on this act of providing information depicts another important side associated with the book-keeper stereotype: information is produced and provided, but not used for supporting the strategic decision-making process by the management accountants themselves. The non-involvement of management accountant in the strategic decision-making process can lead to the provision of irrelevant information to the operational managers (Lambert & Sponem, 2012). The basis of the content of this information is historical or past. According to Mishra (2011), bringing improvement in the performance and profitability of an organisation has always been the main focus of a management accountant. He is mainly involved in the task of cost keeping, budgeting and controlling based on variance analysis. According to Devie, Tarigan and Kunto (2008), management accountant is supposed to meet the expectations of top-level management by providing them with the required information and support in achieving the organisational goal.