This research was conducted over a four weeks period using numerous electronic and printed sources. The primary sources of information were retrieved from multiple search engines such as Google, Yahoo, Hotmail and Catcha. Electronic sources included articles, journals, vendor white papers, analyst reports and published materials collected from the internet web sites such as knowledge storm, Emerald- Library, computer world, and business today to name a few. Printed sources included the following journals and magazines such as Computer world, Information System Controls, Internet Magazine, and several others.
Â Based on the data collected, the research framework contained the following objectives to, (a) compare and examine traditional management accounting and management accounting combined with information technology, (b) examine the possibilities of applying IT with management accounting, (c) assess the organizational benefits of adopting IT in management accounting, and (d) analyze the impact applying IT in management accounting.
Â The research explains how the implementation of information technology in management accounting has changed the approach of traditional management accounting. Traditionally accounting has been somewhat stagnant, monotonous and very time consuming. IT on the other hand is continuously evolving and improving daily. Applying information technology with accounting has made management accounting more fundamental to any organization's decision-makers. Management accounting's primary focus is to support the information needs of internal users, while financial accounting supports the needs of external users, today's technologies assist management accounting together with financial accounting. IT has improved the process of gathering, storing, and the manipulation of large amounts of data (also known as data warehousing) making it possible for accountants to present reliable and efficient information to decision makers.
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It is now a prerequisite for the management accounting module to be integrated with information systems. The module package includes systems for budgeting, investment-planning, standard costing and stock control. The IT facilitates management accounting by providing accurate up to date information and analysis that support management decision making which improves business operations. Application of information technology combined with management accounting, has changed the basic role and responsibilities of corporate accountants. Accountants have had to change their way of thinking by being more receptive to new technology and attaining new skills that will enable them to be more resourceful and valuable to their organization. Management accountants need to have advanced computer and data modeling skills; be able to forecast, project, develop assumptions and be strategic, but more importantly, is to be a consultant to the organization's leadership.
Â The results of the study confirms that technology has and will continue to improve management accounting capabilities, an advantage that is available to all organizations big or small helping them to stay competitive in today's global market. Information technology, alongside management accounting has emerged as a system, which provides critical information that is central for organizational growth and smart investment. Management accounting is able to use a process called data mining to extract large amounts of data from various locations or departments throughout the organization. Management accounting can sift through the extracted data to formulate valuable information used to help uncover potential opportunities or weaknesses which management can base their decisions on. This information is deemed accurate and relevant. The management accounting system provides multiple solutions for decision makers. Designed correctly, IT and accounting systems can provide recommendations and remedies to management.
The technology is beneficial to management for planning and forecasting long-term investments. The system is capable of providing historical data and market trends to management, enabling them to more accurately make decisions and solid projections. All these applications of IT in management accounting culminate in the organization's ability to have a competitive advantage. According an article in the International Journal ofÂ Accounting Information Systems, they "find that investors penalize firms most strongly for experiencing events that compromise the availability of IT systems, consistent with their prediction that these events more negatively impact the reliability of financial reporting and the efficiency and effectiveness of operations" (Benaroch, M., Chernobai, A., & Goldstein, J. (2012).
Â The study also determines management should not presume that implementing new information technology in management accounting always results in company profits. The implementation of new IT can be costly and time consuming making it difficult to comprehend the profits associated with the adaption of new technology. "Management and the accountants need to study the feasibility and the functionality of the systems before the implementation of IT in management accounting" (Moorthy, et al, 2012). This will avoid or minimize the risk of choosing inappropriate technology resulting in unnecessary costs and wasted resources.
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Â This article was limited due to the short research period and "only provides studies of general factors affecting IT in management accounting" (Moorthy, et al, 2012). There are not that many details or specific costs associated with the implementation or selection of the appropriate IT in management accounting. It does however; state that, due to the continuous developments technology has made it so that off the shelf management accounting packages are available and reasonably priced, which is an attractive alternative to the cumbersome costs associated with developing similar software internally.
Â The article concludes that companies accept that the application of IT in management is expected, and many of them anticipate the execution of IT in support of management accounting. This is very apparent with the changes in college and university curriculums; "The University of Texas at Dallas launching a new program in management accounting designed to prepare people for careers in the high-tech industries surrounding Dallas" (Kulesza & Siegel, 1996).
Â This student feels that sources used for this study were reliable and indicative of current trends in implementation and use Accounting Information Systems. However, as stated in the article, this student feels that more in-depth research would need to be conducted in order to determine the best IT options available on the market, as well as the appropriate cost or investment needed for the appropriate system both at implementation and sustainment. One of the new benefits of accounting information systems is the availability of historical data that can be used to measure past and predict future performance and risk of the business firm. According to Biondi and Reberioux (2012), this data is critical in disclosing accurate information and to better monitor corporate executives' decisions and compensation packages. Habakkuk 2:2 - And the LORD answered me, and said, Write the vision, and make [it] plain upon tables, that he may run that readeth it.