Trends in Management Accounting

The Institute of Management Accountants (IMA) has a series of YouTube Videos on Trends in Management Accounting. We will review and discuss some of these trends to learn about developments in this field for discussions in this course.

Listen to the following two videos in the IMA series:

Required:

Comment and expand on a topic discussed in the videos and provide a real world example from the news or your own experience.

Presence during both weeks of the module and a minimum of three postings are expected, one original posting and two responses to colleagues. Minimum required participation does not guarantee a perfect score.

7 Trends in Management Accounting – Introduction. Authored by: IMA. Located at: https://www.youtube.com/watch?v=gRyW2_Ay2Cw. License: All Rights Reserved. License Terms: Standard YouTube License

7 Trends in Management Accounting – Trend 1. Authored by: IMA. Located at: https://www.youtube.com/watch?v=gRyW2_Ay2Cw. License: All Rights Reserved. License Terms: Standard YouTube License

Rubric Name: MBA/MSHRM/MSL Discussion Grading Rubric – Timeliness v1

Criteria	Level 4 – Excellent	Level 3 – Proficient	Level 2 – Developing	Level 1 – Emerging

Quality of Initial Posting (first discussion only)	4 points Initial posting reveals a clear understanding of all aspects of the threaded discussion question; uses factual and relevant information; and demonstrates full development of concepts.	3 points Initial posting demonstrates legitimate reflection and answers most aspects of the threaded discussion question; full development of concepts is not evidenced.	2 points Initial posting demonstrates some reflection and answers some aspects of the threaded discussion question; Limited development of concepts is evident.	1 point Initial posting was not on topic; the response was unrelated to threaded discussion question; and post demonstrated only superficial thought and poor preparation.
Quality of Responses to Classmates	6 points Responded to the required number of students and to the professor, if appropriate, for every discussion. Demonstrated analysis of others’ posts; extends meaningful discussions by building on previous peer posts and offering alternative perspectives.	5 points Responded to almost all of the required students and to the professor, if appropriate, for every discussion. Provided comments and new information to other posts; not all responses promote further discussion of the topic.	4 points Responded to some students and to the professor, if appropriate, for every discussion. Little depth in response; agreed or acknowledged one other classmate’s initial posting.	3 points Did not respond to any student or the professor.
Reference to Supporting Readings/Information Literacy	3 points Refers to and properly cites either course and/or outside readings in both initial posting and responses to peers.	2 points Refers to and properly cites course and/or outside reading in initial posting only.	1 point Makes some reference to assigned readings with some citations or cites questionable sources.	0 points Makes no reference to assigned readings without citations or cites questionable sources.
Critical Thinking	4 points Demonstrates mastery conceptualizing the problem; viewpoints and assumptions of experts are analyzed, synthesized, and evaluated; and conclusions are logically presented with appropriate rationale.	3 points Demonstrates considerable proficiency conceptualizing the problem; viewpoints and assumptions of experts are analyzed, synthesized, and evaluated; and conclusions are presented with necessary rationale.	2 points Demonstrates partial proficiency conceptualizing the problem; viewpoints and assumptions of experts are analyzed, synthesized, and evaluated; and conclusions are somewhat consistent with the analysis and findings.	1 point Demonstrates limited or poor proficiency conceptualizing the problem; viewpoints and assumptions of experts are analyzed, synthesized, and evaluated; and conclusions are either absent or poorly conceived and supported.
Timeliness	3 points Initial post occurs in a timely manner (1 – 3 days into module) allowing ample time for classmates to respond and engage.	2 points Initial post occurs later (4 – 5 days into module) allowing limited time for classmates to respond and engage.	1 point Initial post occurs substantially late (6-7 days into module) allowing minimal to no time for classmates to respond and engage.	0 points Initial post occurs after the first week of the module.
Overall Score	Level 4 18 or more	Level 3 16 or more	Level 2 14 or more	Level 1 0 or more

Response #1

Management accounting is more than a a vital process of preparing management reports and accounts with accurate and timely financial and statistical data. It is also a profession that involves management decision making, devising planning systems and assisting management in the creation and implementation of an organization’s strategy (NJIT, 2018).
A shift from product-centric to customer-centric is a trend in management accounting. This means that customers want to be provided specialized assistance in the means of suppliers giving them specialized or customized ideas, specialized products and specialized services so that they share their unique idea, that should be different from others. We all want our opinion to be valuable and taken into consideration. This thought focus on the awareness that management accountants need to put their efforts on the profitability. Profitability may differ nationally due to the many different cultures of customers are taken into thought.
Presently management accountant allows investors to track the happenings of their accounts and simultaneously guaranteeing that their business remain clear. A customer experience that’s made personally, makes the customers feel the need to work jointly with some businesses as opposed to others, for customer satisfaction. A real-world example of trends in management accounting is Amazon. Amazon is at the top of the market by providing customized options for customers through an online platform which can be access anywhere in the world. Amazon even provide accessibility in 41 different languages to accommodate customers globally.
References

Estopace, E. (2018, April 16). Amazon Singles out Language Service Providers in Neural MT Launch | Slator. Retrieved from https://slator.com/technology/amazon-singles-language-service-providers-neural-mt-launch/

Institute of Management Accountants. (2014, February 18). 7 Trends in Management Accounting – Introduction [Video file]. Retrieved from https://www.youtube.com/watch?v=gRyW2_Ay2Cw

Institute of Management Accountants. (2014, March 6). 7 Trends in Management Accounting – Trend 1 [Video file]. Retrieved from https://www.youtube.com/watch?v=lCj4-gvH1WQ&feature=youtu.be

NJIT. (2018). Recent Trends in Management Accounting | NJIT Online. Retrieved from https://graduatedegrees.online.njit.edu/resources/mba/mba-articles/recent-trends-in-management-accounting/

Response #2

In watching the first video where it talked about management accounting, I heard something that validated how my company has shifted the leadership in letting individuals at lower levels of the company help make cost saving improvements/recommendations. The reason Lean-Six Sigma is so popular is because it enables company employees to question “is there a better way” (“Six Sigma vs. Lean Six Sigma,” n.d.)? With this sort of thinking, employees are employed to find common-sense solutions, and identify waste at all levels of the organization (“Six Sigma vs. Lean Six Sigma,” n.d.). A simple example I remember being recently discussed is that Toyota recently implemented their own improvement process where those on the factory lines didn’t have to stop, walk 5 seconds to the tool set, search for the tool they needed, then walk 5 seconds back. Totally sometimes 15 seconds when they needed something. Upon simply having the tools hung from the ceiling, these employees started saving on average 10-15 seconds per time they needed a tool. Multiplied that by the thousands of employees on the factor lines, and the hundreds of days they work each year, and you find them saving nearly millions of dollars! Simple, low-hanging fruit is sometimes the quick-fix for some of the current marketplace waste we see rampant throughout our companies. I’m thankful I work in a company who identifies this management accounting need, and invests millions of dollars each year into Lean-Six Sigma training to benefit them in the long-run as their return on investment.

Hope you all found this helpful!

Gus

Reference

Six Sigma vs. Lean Six Sigma. (n.d.). Retrieved July 17, 2018, from https://www.villanovau.com/resources/six-sigma/six-sigma-vs-lean-six-sigma/#.W06VF9hKhp8

Module 1 – Background (If applicable)

ACCOUNTING COST SYSTEMS AND COST BEHAVIOR

Modular Learning Objectives

Keep the following objectives in mind as you work through the material in this module:

Define managerial accounting.
Describe the role of managerial accounting.
Differentiate between variable and fixed costs.
Prepare a contribution margin (variable costing) income statement.
Recognize various approaches to categorizing costs.
Prepare and analyze a segmented income statement.

Required Reading

Begin this module by familiarizing yourself with the following sections pertaining to managerial accounting while keeping the above six objectives in mind. Click on the three arrows to explore each topic in more detail.

Check Your Understanding

Check your understanding to make sure that you have a good grasp of the background material. If you are not comfortable with the concepts, review some of the material again or go to the optional resource for more examples.

Click on the quiz icon for an ungraded, 20-question true-or-false self-study quiz to check your progress. If you are not satisfied with the score, review some of the material again. For more in-depth information, review materials listed under optional reading at the bottom of this page.

Final Thoughts

Contribution margin income and absorption income are two distinct approaches to assess operating profit. Many companies use both approaches. The two approaches have benefits and limitations.

Multiple descriptive names exist for the two methods of costing and computation of income. For example, the contribution margin approach is also known as variable costing, direct costing. or marginal costing. Absorption income and costing are also known as full costing, GAAP income, financial accounting income, or traditional costing.

Management mostly uses the information provided by variable costing method for estimates and internal decision-making purposes. Variable costing is appropriate for detailed analysis of a product or service. GAAP is required for publicly released and audited financial statements. Management uses both approaches for internal decision-making.

Cost behavior refers to the way different types of production costs change when there is a change in level of production.

There are two main types of costs according to their behavior:

Fixed Costs:

Fixed costs are those, which do not change with the level of activity within the relevant range. These costs will incur even if no units are produced. For example rent expense, straight-line depreciation expense, etc. Fixed cost per unit decreases with increase in production.

Variable Costs:

Variable costs change in direct proportion to the level of production. This means that total variable cost increase when more units are produced and decreases when less units are produced. Although variable in total, these costs are constant per unit.

Optional Reading

For further detail refer to Dr. Walther’s accounting text and videos.

Walther, L. (2017). Chapter 17: Introduction to Managerial Accounting.

LICENSES AND ATTRIBUTIONS

Discussion Question and 2 responses

Trends in Management Accounting

Rubric Name: MBA/MSHRM/MSL Discussion Grading Rubric – Timeliness v1

Module 1 – Background (If applicable)