Management Accounting without Accountants

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‘Management Accounting without Accountants’ by Pierce, B., (2002) has been represented an important dilemma of management accountants and management accounting. During the eighties, the development of management accounting has raised the question whether the management accountants would survive within their career field or their needs would be diminished in an alarming mode. Pierce, B., (2002) has been researched on this dilemma for the previous decade and come to the decision that the achievement of the knowledge of raising management accounting techniques by the management accountants would recover and represent their image as a value added dimension.

The main concern of this paper is to analyse the published articles ‘Management Accounting without Accountants?’ by IFAC1 with concern for developing a proper knowledge and to resolve the dilemma of management accounting with management accountant in order to generate knowledge. Management accounting practices are following the competency standards of IFAC. These standards are followed be the professional bodies, IFAC member and private practitioners. IFAC has been facilitating Governments, IFAC and IPSAS2 and private sectors by take on accounting standards and policies of management accounting. Its strong research and development initiatives have enriched modern accounting practices. Thus, this paper would go to for more IFAC publication to support the content of this paper.

Main Discussion

Pierce, B., (2002) has raised the question ‘Management Accounting without Accountants?’ and with his long deliberated research with the evidence of UK and Ireland has demonstrated that the importance of management accountant not at all ended. The development of Management accounting has been interrelated with the managerial requirements as well as accounting information. Organisation for assembling knowledgeable business decisions by allocating well equipped in control rationales.

Shepherd, N. A. (2006) added that the operations of modern business, management accounting is essential to producing policy on assists including all areas associated with management. Accounting data linked with policies of retention and share with substitution of fixed assets including financial methods, planning of capital structures and requirements of working capital. The standards of costs, sales as well as profit volumes are also involved. In brief, diverse levels in management in different firms are planned to taking decisions as well as control their day- to- day business operations in apposite time.

Shepherd, N. A. (2006) also differentiated financial accounting with management accounting, for example, information is confidentially used by managers, forward-looking accounting system, and using broad information and internal controls with proper accounting standards. According to AICPA3 there are some areas, which are covered by management accounting are as:

  • Strategic Management: When management accounting is performing as strategic partner of the organisation,
  • Performance Management: It relates with the development of practice in business decision making and management of the performances of organisations,
  • Risk Management: It contributes in frameworks and practices in identification, measurement, management, and report the risks associated with the achievement of the goal of the organisations.

Sutcliffe, P. & Ravari, A. H., (2003) mentioned that management accounting is the apposite exercise of answerability in planning, appraising, controlling and decision-making in any organisation. There are some major differences within various aspects accounting sectors, which are described below:

  1. Differences with Financial-Accounting: Financial accounting is concerning on financial information extended in outside parties, for instance, investors, creditors and government, on the other hand, management accounting is concerning in provides information to internal managers in decision making.
  2. Differences with Cost Accounting: There are overlapping areas between cost accounting and management accounting in various cost functions.
  3. Differences with Financial-Management: Financial management is the important disciplines, which deals with financial matters; on the contrary, management accounting is the application of accounting skills in managers in organisations.

IFAC (2006) stated that sustainability for the management accountants present both a challenge as well as an opportunity. The PAIB4 requirements to be familiar with those changing needs of management accounting in aspect of both private and public awareness on environmental, social as well as economic impacts of corporations. Thus management accounts have an escalating responsibility to gathering these apprehensions. The organisation’s success and status are determined by management accountants with the focus of cost accounting, financial planning, and managerial issues. Theses efforts of managers in the accounting system has designed and developed with motivational criteria.

Pierce, B (2002) argued that the increasing demands of management accounting are mounting rapidly. Thus, the cost of management information is perceptibly augmented with identical rate in future with decentralisation in management accounting tasks. Within these difficulties the career is in closing stages with frequently changing business environment. In addition, the innovative management accounting techniques with appropriate accounting information, other than it is not well-matched in the arrangement of management accountants. In IMA practice, the skills along with activities of management accountants are requisite in the early hour’s time.

But later, they embrace the position of valued team member in organisation. At the present they spend less time in methodological sides by means of the help of IT development. They also extend their region of working in decision making further in a straight line with broad focus.

Pierce, B (2002) also added that the most bolts from the blue thing are that, this altering environment of management accounting accumulating values in organisations. For this motivation, it is treasured and optimistic in managers and in most recent evidences of Irish, the task of top managers and management accountants are distinct in MNC as well as other organisations. They go from beginning to end the deep of their functions and top level managers are frequently judge on them. But, they also proved slow because of having many boundaries in regulations.

Pierce, B (2002) argued those in terms of knowledge and skill of management accountants, diverse types of tools and practices to develop new activities properly. But to use the techniques successfully, they should also have knowledge. He also mentioned that senior managers are identified as strengths and weakness according to management accounting roles rather than business functions when the role of management accounting is preferred in producing team work, involving in decision making, and having knowledge of business functions. By these roles any organisation can get advantages to supplying information in timely, broad, flexible and appropriate set-up in organisation.

Sutcliffe, P. & Ravari, A. H., (2003) has presented one more UK study on potential roles of management accountants should be satisfied with knowledge and skill. The chosen studies identified its roles of management accountant’s major drivers, like operation processing, external report progression, enhancement in technology as well as outsourcing. It also highlights business associates and financial controller in put backing by team or process leaning to hold up management accountants.

IAS Plus, (2009) pointed out the demand of management accounting is ever-increasing with the areas, roles, and skill and knowledge are indomitable in background of future conditions in any organisation. The awareness and appropriate actions has achieved by management accounting, where most of the organisations have a preference without accounts it can perform better as accountants, educators as well as professional bodies.

Busco C., et al (2002), argued that every business has to cope-up in the market with complexities, uncertainties, and corporate-strategies. However, new accounting-system can make conflicts according to organisation’s culture. Mentioning two cases Busco C., et al (2002) presented the former one is concern in how it is thinking about the different ways, which escort conflict with production-managers. Though, the production is developing with the information of operating-units depends on the organisation’s present condition in favourable economic circumstance.

The conflicts could start because the production-units are unable to understand the views of accountants, they are not always concern in product-quality, delivery and customer-services, and management accountants are concerned in firm’s ability, quality improvement and customer-services. Thus, production-unit is unable in accounting based view of management accountants. This case of Busco C., et al (2002) has been supported the context of Management Accounting without Accountants.

Garrison, R. H et al (2008) described that management accountants have extended areas and knowledge in every organisation. They have to generate these areas with proper skill in proper ways. But conflicts are arisen when management accountants have to go with these areas with other organisational divisions, like production and operating unit, because it only focuses on increasing productivity in any cost, on the other hand, management accountants have to focus on financial and quality improvement and accountability on managers in the organisation.

Garrison, R.H. et al (2008) addressed that the production and operation units are unable to cope up with management accountants. Management accountants are concerned with quality, not productivity, which is not actually part of management accountants. So, management accountants go in different direction from accounting areas now-a-days.

Herzlinger R., (2001), argued that managerial accountants are moving fast forward in helping global understand, evaluating their firms in profit oriented firms. However, they should provide their skill and knowledge in non-profit organisations and they can play an effective-role here in planning and assessing their activities. In Government organisations, management actions should be taken in quick and specific stock trade in the market and make equalities between shareholders and voters of the organisations. Non-profit organisations are also found their problems in accountability system with public confidences. In these situations, management accounting is focused on the organisation’s improvement and matching with other areas rather than management accounting, as they are now indicated as mangers, not the accountants.

Sharma R., (2000), argued that Relevance lost is using for unsuitable planning, control and decision mechanisms in growing information and capital intensive. By failure in this term, competitors can get advantages in new and powerful management accounting as profession, and help future managers in managerial decision-making by financial accounting information. Here it should important to consider, another aspect is to compare traditional & emergent-practices in management accounting, which represents by following framework:

As the new emergent-practices of management accounting, which is indicating that, management accountants are now extending their view to the strategic and value of the organisations, rather than the financial system of the organisations, which was only measuring the budget and product related themes. So, management accountants are not working as accountants any more.

Sharma R., (2000) has been deliberated to resolve the question of ‘Management Accounting without Accountants?’ With the development of management accounting, the management accountants are not really accountants of organisations now. It is essential for every business, non- profit and Government organisations and gets more priority in any organisations for extending areas of their services, roles in the business and skill and knowledge applicable in the new emergent management accounting practices. So, as the practices, area, skills and views of management accountants’ changes, they are introducing themselves as managers rather than accountants any more.


The exposure of recent management accounting techniques is ready to lend a hand in providing ongoing distinction and memento of the expedition to improving significance of accounting information. It provides scope for management accountants to enrich their knowledge and keep a forward role to add value on their career. The new techniques of management accounting would extend more capabilities for management accountants. Consequently, management accountants get more outstanding position within the organisation. It acquires the possibility to strengthen their pose as a value added associate of the management team where the question for ‘Management Accounting without Accountants?’ would be resolved.

However, the raising demand of management accounting decreased call for management accountants at the opening. There is no evidence of management accountant’s job cut or to running companies without accountant. Raising contribution of IT5 personnel and development of AIS6 has efficiently found the way to bypass the management accounting purpose. At the same time as management accountants have attributed an elevated regularity rating to shaping information in the course of traditional management accounting practice.

The managers are constantly giving more inferior contribution in the concern to the rate of recurrence of information. For non-adoption of new techniques, the management accountants faced the problem to keep themselves far from the information required by the management. The adoption of new techniques shaped the management accountant’s designation into Financial Advisor or Internal consultant, Financial and Economic analyst rather then simple accountant.


Busco, C., Riccaboni, A., & Scapens, R., (2002), Culture vultures, FMAC Articles of Merit, pp. 59-62. Web.

Garrison, R.H., Noreen E.W. & Brewer P.C., (2008), Managerial Accounting, 11th edition, pp-198-217, McGraw-Hill.

Herzlinger, R., (2000), The Outsiders, Management Accountants Have Yet to Make an Impact on Non-Profit and Government Organizations, IFAC: Articles Library, Chartered Institute of Management Accountants pp. 1-5. Web.

IAS Plus, (2009), International Federation of Accountants (IFAC): Description of IFAC. Web.

IFAC (2006), Why Sustainability Counts for Professional Accountants in Business, Professional Accountants in Business Committee International Federation of Accountants, Information Paper. Web.

Pierce, B., (2002), Management Accounting without Accountants, FMAC Articles of Merit, pp. 41-45. Web.

Sharma, R., (2000) Financial and Management Accounting, From Relevance Lost to Relevance Regained: Management Practice in the New Millennium, p. 1. Web.

Sutcliffe, P. & Ravari, A. H., (2003), Report on Review of Interim Condensed Consolidated Financial Statements to The Shareholders of Dubai Bank PJSC, International Federation of Accountants (IFAC). Web.

Shepherd, N. A. (2006), Statements on Management Accounting, IMA Journal vol. V1 April 2007, EduVision Inc., Institute of Management Accountants. Web.


  1. International Federation of Accountants.
  2. Public Sector Committee.
  3. American Institute of Certified Public Accountants.
  4. Professional Accountant in Business.
  5. Information Technology.
  6. Accounting Information system.

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