Accountants as business partners

Article Abstract:

Managerial accountants can become part of the strategic decision-making process by making themselves integral members of the management team. Obstacles that managerial accountants must overcome to become part of the strategic management team include stereotypes of accountants as rigid, inflexible nerds, unreasonable expectations, business knowledge, and credibility. Accountants can develop themselves as an integral part of the management team by ensuring that the accounting functions are well-run, staffing the department properly, informing the accounting staff of business developments, being a role model, handling conflicting priorities, and utilizing people with the right skills for the management function.

Accounting, auditing, & bookkeeping

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Early warning systems

Article Abstract:

Early warning systems (EWS) are reporting mechanisms that can make management aware of possible opportunities and problems before they affect financial statements. Interviews were conducted with nine financial officers and controllers in four large companies and one state organization to examine how EWS are used. The role and measure of key variables in EWS is discussed. Seven aspects of EWS design are: being realistic, defining the industry, selecting key variables, identifying key variable ratio measures, deciding how and by whom data is compiled, implementing the system, and evaluating the system. The EWS must be tied to an organizational structure and management style.

Corporations, Information storage and retrieval systems

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How challenging should profit budget targets be?

Article Abstract:

One of the tenets of management is that budgets should be both tough but achievable. Budgets with an 80% to 90% level of probable achievement are termed 'highly achievable', but have a degree of challenge. The advantages of using highly achievable targets in the budgeting process are: increased commitment by managers to achieve the budget; decreased organizational control costs; and the maintenance of a high level of managerial confidence. The largest risk in using highly achievable budget targets is that managers may not be sufficiently challenged to perform at their upper limits.

Budget, Budgeting, Budgets

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