Question

Indeed!

So to summarize, planning involves laying down a path to the desired goal/s, and control involves periodically monitoring activities and outcomes to measure progress towards the accomplishment of those goal/s.

For example, similar to what some of you mentioned, the accountant provides historical information to help make the budget (plan) for the upcoming period, and also reports on the results of the performance for the current period so that management (or administration) knows if adjustments should be made to their assumptions/budget or corrective actions are needed to improve the performance (control).

The role of the accountant in planning and control is to be more than just a "bean counter"...to make useful information available to top managers so that they can make "informed" decisions based on that information. Accountants have transformed themselves from being "bean-counters" to becoming "problem-solvers".

Can anyone give one example of how accountants have turned into "problem-solvers"? Also, do non-profit entities need managerial accounting? Do they have anything to benefit from the wisdom of management accountants?

Answer 1

There has been a substantial degree of research interest in the changing function of management accounting and role of management accountants.

"All of the changes in the business environment have resulted in changes to how organisations operate, trade and are managed. This indirectly affects the function and tasks of management accounting, since management accountants have traditionally provided information which facilitates or supports effective and efficient operations and management. However, some of these changes also directly affect the functions and tasks of management accountants. For example, the rapid progress of information technology means that management have become increasingly aware of the availability of more information (for example, through data warehousing and the Internet) and expect that management accountants will provide this for them (and expeditiously). This has an indirect effect on the management accounting function. However, the rise of new technologies have also meant that management accountants can relinquish much of the ‘bean counting’ and ‘number crunching’ to computerised accounting systems, leaving them more time to analyse and interpret the information produced. Thus, information technology also directly affects the tasks conducted by management accountants."

As per the rating given to the role of management accountants top mean rating was given to Problem solving ability so in the present circumstaces top rated skill is problem solving ability and hence the accountants are said to be turned from Bean COunters/Number Crunchers to Problem SOlvers.

“Managerial accounting is regularly used by for-profit corporations to improve overall efficiency and profitability. Nonprofit organizations, on the other hand, have not traditionally been accustomed to evaluating operations using managerial accounting principles. But the adoption of managerial accounting techniques could be as beneficial to ensuring the longevity of nonprofit organizations as it is to for-profits, provided that nonprofit managers can select appropriate measurements, or benchmarks, that provide practical information for planning, control, and decisionmaking. Both for-profit and nonprofit organizations rely upon planning to forecast the resources needed to achieve goals. The former plans budgets enabling the optimum use of resources for profitability. The latter sets fundraising campaign goals to bring in enough revenue to support the maximum number of programs and services possible. Once planning is completed, however, for-profits continue to apply managerial accounting principles, while most nonprofits do not, despite the fact that control and decision-making could make a profoundly positive impact on their operations.”