The Contribution of Management Accountants and Management Accounting to Accounting for Sustainable Development
When presenting management accounting information, the management accountant and his team ensure the data availed will enforce changes or ideas to be implemented by the organization, be it in the short- or long-term basis. It will ensure policy formulation is prioritized to address the urgent needs of the organization. Organizations strive to meet both days to day needs and future consumers’ expectations in their operations hence the need for sustainable development. Therefore, management accounting, management accountants and sustainable development are both correlated in a push to attain growth through the following;
- Creation of audit programs to embrace the requirements for ISO certification, which will play a massive role in ensuring quality production and operations are enhanced. In ascertaining environment conservation and firms’ compliance, internal audit programs are adopted fully (Alhelou et al. 2018). Through data collection and enforcing previous audits recommendations, management accountants ensure sustainable development is attained. Additionally, alternative cost management methods are adopted for profit maximization.
- The outcomes of the recent global financial crisis have developed different risk measurability factors. Looking at the Asian financial crisis, firms used management accounting to ascertain new approaches regarding interests on risks. It led to significant improvements in the economies of different countries (Goldstein et al. 2000). The change in management systems that operate on chance is considered vital in safeguarding future expectations. Future consumers expectation is, therefore guaranteed to a certain extent with the organization planning.
- Management accounting has always operated on the principles of cost management, which generally detail the individual costs in a firm and their contribution to profit margins (Satyro et al. 2017). Through strategic formulations, the management accountant ensures that the best cost approaches are implemented to conserve the environment and create an effective cost structure. Although business operations have different regulations, legal obligations have been instituted to ensure a streamlined market with firms aiming for sustainable development.
- With technological advancements, numerous changes have been witnessed regarding operations in firms and the economy at large. New approaches have been embraced to ensure climatic conditions, social-cultural factors, among others, are controlled. Accountants have adopted new costing methods to contribute to the prevention of pollution and push for biodegradable equipment and products in the firms. Sustainable development will be enhanced with the firms’ consideration of new technological approaches that favor humanity and societal goals (Beder, 1994).
- Management accounting and the accountant will also ensure the firms’ approach of operations does not go against set rules and regulations in a quest to maximize profits. Laws are always adopted to ensure limited or no exploitation of both the producer and consumer. For sustainable development to be attained, the firm needs to adhere to all government and financial markets regulations hence the dire need of management accountant input.
References
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Beder, Sharon. (1994). The Role of Technology in Sustainable Development.
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Goldstein, Morris, Carmen Reinhart, and Graciela Kaminsky. (2000) Assessing
Financial Vulnerability: An Early Warning System for Emerging Markets.
Washington: Institute for International Economics, forthcoming
Satyro, Walter & Sacomano, José & Contador, José & Almeida, C. & Giannetti, B.F.
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