Black Friday 2024

Save 15% on all writing services during November. Terms & Conditions apply.

Disclaimer: This essay is provided as an example of work produced by students studying towards a accounting degree, it is not illustrative of the work produced by our in-house experts. Click here for sample essays written by our professional writers.

This essay should not be treated as authoritative or accurate when considering investments or other financial products.

The Importance of management accounting research

Paper Type: Free Essay Subject: Accounting
Wordcount: 2622 words Published: 1st Jan 2015

Reference this

Management Accounting Research is necessary to the healthy development of Accounting Subject and to make information more up to date for the practitioners. On the other hand, majority of actual research are often very academically focused and many practitioners have restricted knowledge or interest in academic papers. This paper will critically assess the previous statement using a specific piece of management accounting research and demonstrate how this could benefit practitioners and evaluate various means how particular research communicate its information to the practitioners.

Accounting practitioners, whether they work in a public or private company, conduct research for their clients. They often assess how to create new accounting or auditing standards, how to illustrate unusual economic transactions in the financial statements and how new tax policies would influence the businesses of their clients or employers. Researches may emphasize solving immediate issues for a single client or group of clients (Gordon & Porter 2009). Peer-reviewed journal articles and latest research papers that emphasize accounting research will assist accounting practitioners in acquiring the latest information about the impact of specific policies, ways to present unusual business transactions, ways to develop new accounting or auditing standards as well as other relevant issues (Informa World 2010). Furthermore, journal articles and research papers themselves might be used by practitioners as their basis on ways how to prepare a professional research.

Moreover, accounting research also emphasizes other broader issues such as how accounting professions would affect capital markets and vice versa. It deals with various concerns regarding financial reporting, systems implementation, auditing, tax reporting and other important concerning within scientific perspective. These studies rely on various sources such as financial statement, stock prices, experiments and even computer simulations and mathematical evidences. Topics in accounting research often varies from immediately valuable aids to enhance existing audit procedures to wider picture situations concerning the future direction of accounting profession. Furthermore, many studies emphasize the use or generation of information. In other words, accounting research makes practitioners aware how accounting influences the world around them and how this world influences their profession. Consequently, accounting research can provide valuable information and insights for auditors, tax consultants, regulators and other accounting practitioners (Gordon & Porter 2009).

Get Help With Your Essay

If you need assistance with writing your essay, our professional essay writing service is here to help!
Find out more about our Essay Writing Service

For instance, one of the accounting researchers’ main objectives is to assess the effectiveness of existing accounting practices in presenting information to stakeholders. They have considered all the aspects involved in this process, from the functionality of managerial accounting to the effectiveness of new audit methods. These researches can provide new insight to accounting practitioners and policymaker specifically when evidence states that present methods are not as effective as they perceived (Gordon & Porter 2009).

Furthermore, accounting practitioners can enhance the understanding of how stakeholders actually employ the information that accountants present. It can also help accounting professionals to search for effective ways of producing information that is more valuable. Other major research topics include: how functions of existing auditing techniques and how to enhance them; how accounting information impact promotion and employment within firms and how amendments in accounting policies will influence capital market and accounting (Gordon & Porter 2009).

As further illustration of the importance of research, this paper will discuss a selected article called “Management accounting practices in the British food and drinks industry” by Robert Luther and Magdy Abdel-Kadel. It aims to present accounting practices in the British food and drinks Industry. It presents a unique detailed evaluation of actual management accounting techniques and some suggestions concerning future trends. This paper also serves as evidence the gap between accounting practices provided in textbooks and actual accounting practices (Luther & Abdel-Kadel 2006). The researchers selected the food and drinks industry because of being the dominant sector in the country (Food and Drink Federation 2010).

Accounting practitioners, who are interested in practicing their skills within food and drinks industry, will clearly benefit to this research. First, it explains how accountants in that industry practice different accounting processes. One good example is the costing systems. These systems served as the foundation for the internal information systems for managers. It gives information that the administration needs to develop and supervise organisation’s activities and make decisions in the future. Examples of information often included in costing systems are actual unit costs for the most recent period, actual expenses of operating a department for the most recent period and predicted costs. Since every economy consists of different industries, there has been an exhaustive list that is given by a costing system (Walker 2007 p. 4).

The article suggested accountants’ practices in costs systems of British food and drinks industry. Forty eight percent of the company often or very often distinguish between variable/incremental expenses and fixed/non-incremental expenses for decision making purposes. Majority of the respondent believes that separation is very important. In contrary, only few companies employ three techniques for allocation overhead to cost objects such as plant-wide, multiple-rate or ABC. In other words, variable costing is the trend in foods and drinks industry and not those forms of absorption costing. However, most of them believe that those three techniques are important but it should not be implemented frequently (Luther & Abdel-Kadel 2006).

Another example is in terms of budgeting. Management accounting literature stated that budgeting serves as a valuable technique in controlling and planning activities within an organisation. The said study asked the respondent to give rating on the usage and significance of budgeting for strategic planning, zero-based budgeting, budgeting with “what if” consideration and budgeting for handling costs. The study suggested that budgeting is oftentimes employed for planning and controlling expenses and considered important by 90 percent of respondents. In this sense, it can be considered that companies within the foods and drinks industry considers budgeting as important for planning and control (Luther & Abdel-Kadel 2006, National Center for Education Statistics 2003).

Majority of the respondents employs flexible budgeting oftentimes and consider it as valuable. However, only 29 percent do not apply this principle at all. “What if” analysis is considered important but employed in case to case basis. ABB is somewhat important for these companies. However, when the researchers cross-tabulated ABB and ABC, they realized that all firms that have high usage rates for ABC has similar case for ABB. One could assume that firms within the food and drinks industry began implementing ABC and then they employed the activities analysis conducted during the implementation of ABC to plan for their budgets. On the other hand, it is also significant to note that ABB is considered as more important and oftentimes employed than ABC. It suggests that budgeting is considered more important than costing. Zero-based budgeting, although employed frequently is considered insignificant. Lastly, majority of accounting practitioners within the food and drinks industry consider budgeting as an important component of long-term strategic planning (Luther & Abdel-Kadel 2006).

Moreover, the research paper has their own mechanisms of communicating the value of its study to accounting practitioners as well as to research. First one is citing the importance of food and drinks industry to the overall economy of United Kingdom yet they receive less attention from the scholars not until 1996 when the “Benchmarking and Self-Assessment Initiative” was introduced. The said initiative was launched in order to improve the competitiveness of the industry and search for more practical and effective management techniques (Luther & Abdel-Kadel 2006). In other words, the scarcity of accounting related articles about food and drinks make this study itself valuable.

Second, it also suggests that similar to other industries, food and drinks sectors also require an attention so that they would be able improve its competitiveness. This could only be done through searching for practical management techniques (Luther & Abdel-Kadel 2006). However, no one would ever develop better management techniques if practitioners and researchers are unaware of existing techniques used in food and drinks industry. Once they have realized existing management technique (e.g. accounting practices) as well as its strengths and weaknesses, practitioners and scholars would be able to create better and more appropriate practices than those existing ones (Narasimham & Reid 2002). Clearly, Luther and Abdel-Kadel’s study serves as an important tool to explain to the practitioners and scholars existing accounting practices within the food and drinks industry.

Third, the dominance of this sector indicates that many accounting practitioners are employed in this industry but minimal research is provided that would serve as guidance for accountants if they decided to practice in firm that operate under food and drinks industry. Different industries have different accounting practices (Bavishi 1991). In other words, typical practices of accountants who are previously employed in a hospital might not be applicable to the manufacturing firms of beverages. In this sense, if accountants, who were previously employed in a different industry and then decided to be employed in food and drinks sectors, then it would be prudent if they conduct research regarding accounting practices on those sectors and this article clearly serves as a valuable tool for that purpose.

Fourth, this article also suggests its value since it tries to prove how theories presented in books might not be always applicable in the actual practices. Such assumption is perhaps the reason why accountants have limited knowledge or interest in academic papers. It seems they assume that books and journal articles are similar literatures that only present academically focused theories and not actual practices. In this sense, this article would disprove such assumptions.

However, in order to realize that their assumptions are inaccurate, it would be important for accountants to be encouraged to use academic journals if they want to advance in their career. Furthermore, this also requires strong dedication of researches to focus on studying actual practices in different industries. Another assumption is that accountants do not have enough time to check to conduct their own research because of various tasks that they have to fulfil. Clearly, they will use their break time to unwind and not to conduct further research unless they are also working accounting professors (Chartered Accountant: Duties and Responsibilities 2009).

On the other hand, despite the article’s clearly communicated messages and its apparent advantages, due to the limited scope of the paper, this article proves not useful for accountants who do not plan to enter food and drinks industry to practice their skills. Furthermore, since this research is conducted in United Kingdom, such practices might only be limited within that country and no assurance are provided that these accounting approaches are also practiced in food and services industry of other nations such as United States, Australia or Ireland. In this sense, if an accountant resides in Australia and will plan to work in his/her home country within the food and beverages industry, then these articles might not be considered as useful. It will be prudent to search for similar paper but was conducted in Australian territory.

Conclusion

Management Accounting Research is necessary to the healthy development of Accounting Subject and to make information more up to date for the practitioners. On the other hand, majority of actual research are often very academically focused and many practitioners have restricted knowledge or interest in academic papers. Accounting practitioners, whether they work in a public or private company, conduct research for their clients. They often assess how to create new accounting or auditing standards, how to illustrate unusual economic transactions in the financial statements and how new tax policies would influence the businesses of their clients or employers.

Researches may emphasize solving immediate issues for a single client or group of clients. Peer-reviewed journal articles and latest research papers that emphasize accounting research will assist accounting practitioners in acquiring the latest information about the impact of specific policies, ways to present unusual business transactions, ways to develop new accounting or auditing standards as well as other relevant issues. Moreover, accounting research also emphasizes other broader issues such as how accounting professions would affect capital markets and vice versa. It deals with various concerns regarding financial reporting, systems implementation, auditing, tax reporting and other important concerning within scientific perspective.

As further illustration of the importance of research, this paper discussed a selected article called “Management accounting practices in the British food and drinks industry” by Robert Luther and Magdy Abdel-Kadel. It aims to present accounting practices in the British food and drinks Industry. It presents a unique detailed evaluation of actual management accounting techniques and some suggestions concerning future trends. The article tries to prove how theories presented in books might not be always applicable in the actual practices. Such assumption is perhaps the reason why accountants have limited knowledge or interest in academic papers. It seems they assume that books and journal articles are similar literatures that only present academically focused theories and not actual practices. In this sense, this article would disprove such assumptions.

On the other hand, despite the article’s clearly communicated messages and its apparent advantages, due to the limited scope of the paper, this article proves not useful for accountants who do not plan to enter food and drinks industry to practice their skills. Furthermore, since this research is conducted in United Kingdom, such practices might only be limited within that country and no assurance are provided that these accounting approaches are also practiced in food and services industry of other nations such as United States, Australia or Ireland. In this sense, if an accountant resides in Australia and will plan to work in his/her home country within the food and beverages industry, then these articles might not be considered as useful. It will be prudent to search for similar paper but was conducted in Australian territory.

Word Count: 2,263

 

Cite This Work

To export a reference to this article please select a referencing stye below:

Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.

Related Services

View all

DMCA / Removal Request

If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: