Management Accountant is an officer who is entrusted with Management Accounting function of an organization. He plays a significant role in the decision making process of an organization. The organizational position of Management Accountant varies from concern to concern depending upon the pattern of management system. He may be an executive in some concern, while a member of Board of Directors in case of some other concern. However, he occupies a key position in the organization. In large concerns, he is responsible for the installation, development and efficient functioning of the management accounting system. He designs the frame work of the financial and cost control reports that provide with the most useful data at the most appropriate time. The Management Accountant sometimes described as Chief Intelligence Officer because apart from top management, no one in the organization perhaps knows more about various functions of the organization than him. Tandon has explained the position of Management Accountant as follows:
“The management accountant is exactly like the spokes in a wheel, connecting the rim of the wheel and the hub receiving the information. He processes the information and then returns the processed information back to where it came from”.
Recommended reading: Basic concepts of management accounting
Role of Management Accountant
Management Accountant, otherwise called Controller, is considered to be a part of the management team since he has the responsibility for collecting vital information, both from within and outside the company. The functions of the controller have been laid down by the Controller’s Institute of America. These functions are:
- To establish, coordinate and administer, as an integral part of management, an adequate plan for the control of operations. Such a plan would provide, to the extent required in the business cost standards, expense budgets, sales forecasts, profit planning, and programme for capital investment and financing, together with necessary procedures to effectuate the plan.
- To compare performance with operating plan and standards and to report and interpret the results of operation to all levels of management, and to the owners of the business. This function includes the formulation and administration of accounting policy and the compilations of statistical records and special reposts as required.
- To consult withal segments of management responsible for policy or action conserving any phase of the operations of business as it relates to the attainment of objective, and the effectiveness of policies, organization strictures, procedures.
- To administer tax policies and procedures.
- To supervise and coordinate preparation of reports to Government agencies.
- The assured fiscal protection for the assets of the business through adequate internal; control and proper insurance coverage.
- To continuously appraise economic and social forces and government influences, and interpret their effect upon business.
Duties and Responsibilities of Management Accountant
The primary duty of Management Accountant is to help management in taking correct policy-decisions and improving the efficiency of operations. He performs a staff function and also has line authority over the accountants. If management accountant feels that a decision likely to be taken by the management based on the information tendered by him shall be detrimental to the interest of the concern, he should point out this fact to the concerned management, of course, with tact, patience, firmness and politeness. On the other hand, if the decision taken happens to be wrong one on account t of inaccuracy, biased and fabricated data furnished by the management accountant, he shall be held responsible for wrong decision taken by the management. Controllers Institute of America has defined the following duties of Management Accountant or controller:
- The installation and interpretation of all accounting records of the corporative.
- The preparation and interpretation of the financial statements and reports of the corporation.
- Continuous audit of all accounts and records of the corporation wherever located.
- The compilation of costs of distribution.
- The compilation of production costs.
- The taking and costing of all physical inventories.
- The preparation and filing of tax returns and to the supervision of all matters relating to taxes.
- The preparation and interpretation of all statistical records and reports of the corporation.
- The preparation as budget director, in conjunction with other officers and department heads, of an annual budget covering all activities of the corporation of submission to the Board of Directors prior to the beginning of the fiscal year. The authority of the Controller, with respect to the veto of commitments of expenditures not authorized by the budget shall, from time to time, be fixed by the board of Directors.
- The ascertainment currently that the properties of the corporation are properly and adequately insured.
- The initiation, preparation and issuance of standard practices relating to all accounting, matters and procedures and the co-ordination of system throughout the corporation including clerical and office methods, records, reports and procedures.
- The maintenance of adequate records of authorized appropriations and the determination that all sums expended pursuant there into are properly accounted for.
- The ascertainment currently that financial transactions covered by minutes of the Board of Directors and/ or the Executive committee are properly executed and recorded.
- The maintenance of adequate records of all contracts and leases.
- The approval for payment(and / or countersigning ) of all cheques, promissory notes and other negotiable instruments of the corporation which have been signed by the treasurer or such other officers as shall have been authorized by the by-laws of the corporation or form time to time designated by the Board of Directors.
- The examination of all warrants for the withdrawal of securities from the vaults of the corporation and the determination that such withdrawals are made in conformity with the by-laws and /or regulations established from time by the Board of Directors.
- The preparation or approval of the regulations or standard practices, required to assure compliance with orders of regulations issued by duly constituted governmental agencies.