The management accounting system provides highly useful economic and financial data to the management. A channel is used to transmit the information efficiently and effectively that channel is management accountant.
Who is management accountant?
The management accountant designs the format of the financial and cost control reports. These reports are presented before each level of management with the most useful data at the most appropriate time. Moreover, he/she educates management executives as the ways of using reports. Hence, sometimes, he/she described as the Chief Intelligence Officer of the top management.
Management requires an individual who is expected to gathers information, breaks it down and organizes it into meaningful categories. Moreover, he separates relevant and irrelevant information and then ranks the relevant information according to the degree of importance to management. The first rank information is supplied to management immediately. Likewise, least rank scoring information is presented before management as and when required. The relevant information are getting ranks on the basis situation prevailing within the business organization. In nutshell, management accountant is the person preparing the information according to the needs of the management in an intelligible form and submitted at required time.
Management Accountant is otherwise called as Chief Accountant, Chief Accounts Officer, Controller of Accounts, Finance Controller, Finance Director, Chief Intelligence Officer, Finance Manager and Financial Advisor.
Status or Role of Management Accountant
According to Dr.Don Barker,
“Management Accountants will be presented with many opportunities for innovative actions in the global economic environment. In addition to their role of providing accurate timely and relevant information, management accountants will be expected to participate as business consultants and partners with management in the strategic planning process”.
According to Controller’s Institute Committee,
1. The Controller (or Management Accountant) should be an executive officer at the policy making level responsible directly to the Chief Executive Officer of the concern. His appointment or removal should require the approval of the Board of Directors.
2. The controller should be required by the Board of Directors to present directly periodical reports covering the operating results and financial condition of the business together with such other information as it may require.
3. The controller should preferably be a member of the Board of Directors. And if not, he should be closely associated with all other top policy making people. At a minimum he should be invited to attend the Board’s Meeting with the right to be heard.
Therefore, in practice, the management accountant is asked to work directly under the Managing Director or Chief Executive Officer with access to the Board of Directors as an invitee. The relationship between the top management of the concern and the management accountant is mutual confidence.