With a move toward globalization looming, the change brought about by it may change the way companies in the United States view their accountants. First, there are two types of accountants, financial accountants and management accountants. A definition of financial accounting, borrowed from Merriam-Webster, is the systematic analysis of information about the economic affairs of an organization for use by people outside the organization. Merriam-Webster goes on to explain management accounting as “reporting for planning and decision making” … “Its goal is to provide managers with reliable information on the costs of operations and the standards to which they are used. they can compare those costs, to help them budget. ” The key difference to draw from these two definitions is that financial accounting provides information to people outside the organization, and management accounting aims to help managers within an organization make decisions.
The fact that the United States becomes more globalized will increase competition for companies within the country, making management accountants more valuable to companies. To understand what increased competition will affect American companies and their accountants, one must first look at how American companies view management accountants compared to other countries. In a research article titled “Management Accounting Practices in the US and Japan: Comparative Survey Results and Research Implications (1991)” by M. Shields and C. Chow, the difference in goals is noted. established by American and Japanese accountants. The survey suggests that American accountants “emphasize the use of standards to control ex-post manufacturing costs,” while contrasting Japanese accountants use forward-looking practices. This difference here lies within the objectives set by the companies. While US companies are looking at what they can do now to lower costs, Japanese companies are looking to the future to lower the costs of products that may not yet exist. This kind of thinking for American businesses is not acceptable, and the state that businesses are in now is less than satisfactory because the current state of management accounting is going in the wrong direction.
Management accountants look to the future, set budgets, forecast, and steer companies in the right forward direction. In increased competition, especially for American companies, companies will need managers who make the right decisions for the good of the company. In an article by B. Pounder, “How Globalization is Affecting US Accounting (2006),” Pounder states that one of the main reasons management accounting is obscure in this country is because American managers are more likely to make decisions. “intuitive” (usually for personal gain) rather than making decisions that are good for the company in the long run. This can be related to the Shields & Chow research survey, which looks at companies and their respective goals. It is more common for companies in the US to demonstrate actions for personal gain than in Japan, and in an age of globalization and increased competition, companies cannot survive with that kind of mindset and framework.
A report by N. Miculescu, “Current Trends in Production Cost Accounting (2011)”, Miculescu concluded that companies have an increasing duty to find solutions as quickly as possible to keep up with this increased competition. due to globalization.
The Current State of Management Accounting in the US