Vid # 3 BUSINESS MANAGEMENT ACCOUNTING Module 2 Part 1

Summary

The video script emphasizes the evolving role of management accounting in today's dynamic business environment. It highlights the importance of analyzing economic, social, political, technological, and environmental factors to support strategic decision-making. The script discusses the expansion of management accounting beyond financial reporting and cost management to include strategic planning, performance management, risk management, sustainability reporting, and leveraging digital transformation. It also touches on contemporary management techniques like Agile, Lean, Six Sigma, and Knowledge Management, and the impact of technology, globalization, and new business models on the field.

Takeaways

• 📊 Management accounting is essential for organizations to navigate the business environment and make informed decisions, considering economic, social, political, technological, and environmental factors.
• 📈 A key role of management accounting is to provide financial information and analysis to support strategic decision-making, including market trend analysis, demand and supply forecasting, and financial scenario evaluation.
• 💰 Management accountants help identify opportunities for growth and the necessary investments to capitalize on them, focusing on profitability and financial impact assessment.
• 🔍 Cost management is critical in a competitive environment, where management accountants analyze cost behavior, implement cost reduction strategies, and monitor performance to control costs effectively.
• 🛡️ Management accounting plays a role in risk management, identifying, assessing, and implementing strategies to ensure risks are effectively managed, including the analysis of internal controls and business processes.
• 🌐 The role of management accounting is evolving due to technology, globalization, and changing business models, requiring a broader and more strategic approach.
• 📝 The script highlights the expansion of management accounting into areas such as strategic planning, performance management, sustainability reporting, and leveraging digital transformation for improved operations.
• 📈 Agile, lean, and Six Sigma are among the contemporary management techniques that management accountants can use to improve organizational efficiency and quality.
• 🌟 Management accountants are increasingly seen as strategic partners, providing insights to senior management and being involved in decision-making processes.
• 🌍 Globalization has led to new challenges for management accountants, who must understand different accounting standards, tax regulations, and cultural norms across countries.
• 🏛️ Ethics and transparency are crucial for management accountants, who are expected to operate with high ethical standards and ensure financial reporting transparency to stakeholders.

Q & A

What is the essential function of management accounting in an organization?

Management accounting is an essential function of any organization that plays a crucial role in analyzing and interpreting various factors impacting an organization's operations and performance, helping to make informed decisions and remain competitive.

What factors does the business environment include that can impact an organization's operations and performance?

The business environment includes a wide range of factors such as economic, social, political, technological, and environmental factors that can influence an organization's operations and performance.

How does management accounting support strategic decision making?

Management accounting supports strategic decision making by providing financial information and analysis, which includes analyzing market trends, forecasting demand and supply, and evaluating the financial impact of different scenarios.

What is the role of management accountants in cost management?

Management accountants play a vital role in cost management by helping organizations identify and manage costs effectively. This involves analyzing cost behavior, implementing cost reduction strategies, and monitoring performance to ensure costs are under control.

How does management accounting assist in risk management within a business environment?

Management accounting assists in risk management by identifying and assessing potential risks, implementing risk management strategies, and monitoring performance to ensure risks are effectively managed.

What is the impact of technology on the role of management accounting?

Technology has expanded the role of management accounting, allowing it to play a broader and more strategic role in organizations. This includes leveraging digital technologies to improve operations, develop data analytics capabilities, and ensure data security.

How can management accounting contribute to sustainability reporting?

Management accounting can contribute to sustainability reporting by integrating sustainability considerations into decision-making processes, developing environmental and social metrics, and establishing reporting frameworks to analyze and report on sustainability performance.

What are some contemporary management techniques mentioned in the script?

Some contemporary management techniques mentioned include agile management, lean management, Six Sigma, total quality management (TQM), performance management, digital transformation, and knowledge management.

How is the role of management accounting changing due to globalization?

The role of management accounting is changing due to globalization as accountants must understand different accounting standards, tax regulations, and cultural norms to operate effectively in different countries.

What are the expectations from management accountants regarding ethics and transparency?

Management accountants are expected to operate with the highest ethical standards and ensure transparency in financial reporting, which includes complying with regulatory requirements and disclosing all relevant financial information to stakeholders.

How are new business models affecting the role of management accountants?

New business models, such as the sharing economy and subscription-based services, are creating new challenges for management accountants. They must now track revenue and expenses in non-traditional ways and adjust financial models to accommodate new revenue streams.

Outlines

00:00

📊 Management Accounting in Business Environment

This paragraph discusses the critical role of management accounting in the modern business environment. It emphasizes how management accountants analyze various factors like economic, social, political, technological, and environmental influences on an organization's performance. The summary highlights the provision of financial information and analysis to support strategic decision-making, including market trend analysis, demand and supply forecasting, and financial impact evaluation of different scenarios. It also touches on cost management, risk management, and the importance of adapting to the business environment for competitive advantage and long-term success.

05:03

🛠 Expanding the Role of Management Accounting

The role of management accounting has evolved beyond traditional financial reporting and cost management. This paragraph explores how technology enables management accounting to play a broader and more strategic role. It outlines the ways in which management accounting can contribute to strategic planning, performance management, risk management, and sustainability reporting. The summary underscores the importance of adapting to technological advancements and integrating sustainability considerations into decision-making processes, while also leveraging data analytics to improve business operations and performance.

10:21

🌐 Digital Transformation and Modern Management Techniques

This paragraph delves into the impact of digital transformation on management accounting and the integration of contemporary management techniques. It discusses the use of data analytics, cloud solutions, and ensuring data security to improve operations. The summary highlights the potential benefits and risks of digital technologies, the importance of agile management, lean management, Six Sigma, and Total Quality Management (TQM) in enhancing organizational efficiency and quality. It also touches on the conservative attitude towards digital transformation and the need for management accountants to adapt to these changes.

15:24

🌟 The Changing Landscape of Management Accounting

The role of management accounting is constantly evolving due to technological advancements, globalization, and changing business models. This paragraph examines how these factors are reshaping the profession. The summary points out the increasing use of automation, big data analytics, and artificial intelligence in management accounting, as well as the challenges posed by globalization, such as understanding different accounting standards and cultural norms. It also discusses the emergence of new business models and the strategic role of management accountants as partners in decision-making processes.

21:08

🌍 Globalization and Ethics in Management Accounting

This paragraph focuses on the challenges and expectations of management accountants in the context of globalization and ethical standards. It discusses the need for management accountants to understand international markets, tax regulations, and cultural norms, as well as the rise of new business models that require tracking revenue and expenses in non-traditional ways. The summary emphasizes the strategic partnership role of management accountants, the importance of ethics and transparency in financial reporting, and the expectation to operate with the highest ethical standards and ensure compliance with regulatory requirements.

Keywords

💡Management Accounting

Management Accounting is a critical function within an organization that involves the provision of financial information and analysis to support strategic decision-making. It is integral to the video's theme as it highlights the evolving role of management accountants in analyzing market trends, forecasting demand and supply, and evaluating financial scenarios to aid organizations in remaining competitive. The script mentions management accountants' ability to interpret various factors impacting an organization's operations, such as economic, social, political, technological, and environmental factors.

💡Business Environment

The Business Environment encompasses a wide range of external and internal factors that can influence an organization's operations and performance. In the context of the video, it is crucial as management accountants need to analyze and interpret these factors to help organizations make informed decisions. The script discusses how the business environment includes economic, social, political, technological, and environmental factors, emphasizing the importance of understanding this environment for strategic planning and risk management.

💡Strategic Decision Making

Strategic Decision Making refers to the process by which organizations select key actions that determine the nature and direction of the organization. The video underscores the importance of management accounting in providing financial information and analysis to facilitate this process. For example, the script mentions evaluating the financial impact of different scenarios as part of strategic decision making.

💡Cost Management

Cost Management is the process of planning, controlling, and reducing costs within an organization. The video discusses its significance in the context of increasing competition and the pressure to reduce costs, where management accountants play a vital role in identifying and managing costs effectively. This includes analyzing cost behavior and implementing cost reduction strategies, as illustrated in the script.

💡Risk Management

Risk Management is the identification, assessment, and prioritization of risks followed by coordinated efforts to minimize, monitor, and control the probability or impact of unfortunate events. The video script highlights the role of management accounting in this area, including implementing risk management strategies and monitoring performance to ensure risks are effectively managed.

💡Sustainability Reporting

Sustainability Reporting involves the process of measuring, disclosing, and being accountable to internal and external stakeholders for an organization's effects on the environment, society, and economic dimensions of sustainability. The video mentions the role of management accounting in integrating sustainability considerations into decision-making processes and developing environmental and social metrics.

💡Digital Transformation

Digital Transformation refers to the integration of digital technology into all areas of an organization, fundamentally changing how an organization operates and delivers value to customers. The video discusses how management accounting can leverage digital technologies to improve operations and performance, including the development of data analytics capabilities and the implementation of cloud-based solutions.

💡Agile Management

Agile Management is an iterative approach to project management that emphasizes flexibility, collaboration, and rapid response to change. The video script mentions this as one of the contemporary management techniques, which can be related to the adaptability required in the dynamic business environment that management accountants operate within.

💡Six Sigma

Six Sigma is a data-driven approach to process improvement that focuses on reducing defects and improving quality. The video script refers to it as a technique that requires intensive data collection and analysis, which is relevant to the precision and accuracy needed in management accounting for process improvement.

💡Performance Management

Performance Management is a technique that involves setting goals and objectives for employees and tracking their performance against these metrics. The video script discusses its importance in ensuring that employees meet expectations and contribute to the organization's success, which is directly related to the management accounting's role in monitoring and improving organizational performance.

💡Knowledge Management

Knowledge Management involves capturing and sharing knowledge and expertise within an organization to improve decision-making and problem-solving. The video script mentions this as a technique that can enhance the strategic role of management accountants by providing insights and ensuring informed decision-making.

Highlights

Management accounting is essential for providing financial information and analysis to support strategic decision-making.

The business environment includes economic, social, political, technological, and environmental factors impacting organizations.

Management accountants need to analyze and interpret business environment factors to help organizations make informed decisions.

Key roles of management accounting include analyzing market trends, forecasting demand and supply, and evaluating financial impacts.

Cost management is crucial, and management accountants play a critical role in identifying and managing costs effectively.

Management accounting helps organizations identify opportunities for growth and necessary investments to capitalize on them.

Risk management involves identifying, assessing, and implementing strategies to manage risks in the business environment.

Management accounting plays a critical role in helping organizations remain competitive and achieve long-term success.

The role of management accounting has evolved beyond traditional financial reporting to include broader strategic roles.

Strategic planning in management accounting involves developing and implementing strategic plans with financial analysis.

Performance management helps organizations monitor and improve performance using financial and non-financial metrics.

Sustainability reporting integrates environmental and social metrics into decision-making processes.

Digital transformation leverages technologies to improve operations and performance, emphasizing data security.

Contemporary management techniques include agile management, lean management, Six Sigma, and total quality management.

The changing world of management accounting is driven by advancements in technology, globalization, and evolving business models.

Automation, big data analytics, and artificial intelligence are transforming management accounting practices.

Globalization requires management accountants to understand different accounting standards and cultural norms.

New business models like the sharing economy and subscription-based services present new challenges for tracking revenue and expenses.

Management accountants are now seen as strategic partners providing valuable insights for decision-making processes.

Ethics and transparency in financial reporting are increasingly important for management accountants.

Transcripts

good night guys we're now going to

discuss the management funding and the

business environment so we are now on

our module to

the management accounting is an

essential function of any organization

and its role has become increasingly

important in today's business

environment

the business environment includes a wide

range of factors that can impact an

organization's operations and

performance including economic social

political technological and

environmental factors as such the

management accountants need to be able

to analyze and interpret these factors

to help organizations make informed

decisions and remain competitive

one of the key roles of management

accounting is to provide financial

information and Analysis to support

strategic decision making this includes

analyzing market trends forecasting

demand and supply and evaluating the

financial impact of different scenarios

basically Italian

management all the time to analyze

business markets

are analyzing market trends

forecasting demand and Supply some

demand and Supply production

to make it profitable and evaluating the

financial impact of different scenarios

at different

on different scenarios by understanding

the business environment management

accountants can help organizations

identify opportunities for girls and

meet the necessary Investments to

capitalize on them

another important aspect of management

accounting in the business environment

is cost management

so with increasing competition and

pressure to reduce cost management

accountants play a vital and critical

role in helping organizations identify

and manage costs effectively

this includes analyzing cost Behavior

implementing cost reduction strategies

and monitoring performed performance to

ensure that costs are under control

management accounting is more on

maximizing profit and reducing costs

[Music]

um

for additional profit or it minimize

in addition management accounting can

help organization manage risk in the

business environment

this includes identifying and assessing

risk implementing risk management

strategies and monitoring performance to

ensure that risks are being effectively

managed

so partner management accounting I

this assessment business

it's just like

uh venturing into a business it is a

first step to do this is

with the increasing complexity of the

business environment risk management has

become an essential function of

management accounting overall management

accounting plays a critical role in

helping organizations navigate the

business environment by providing

financial information and Analysis

managing costs effectively and managing

risk management accountants can help

organization remain competitive and

Achieve long-term success

foreign

thank you

the role of management accounting has

evolved over the years and there has

been a growing recognition of the need

to expand its role beyond the

traditional focus on financial reporting

and cost management

management accounting because of the

technology

technology

Technologies around

in today's business environment

management accounting can play a broader

and more strategic role in helping

organizations achieve their objectives

and enhance their competitiveness

so here are some ways in which the role

of management accounting can be expanded

strategic planning management accounting

can help organizations develop and

Implement their strategic Plans by

providing financial analysis and

insights that help in that help

inform decision making

Dawn

this includes analyzing market trends

identifying growth opportunities and

evaluating Financial impact of different

strategic options

market trends

um

ordinary

then we have the performance management

management accounting can help

organizations Monitor and improve their

performance by developing the

performance indicators and using data

analytics to track progress and identify

areas for improvement

this includes analyzing financial and

non-finance financial metrics such as

customer satisfaction and employee

engagement to help organizations achieve

their objectives risk management

management accounting can help

organization manage Risk by identifying

and assessing potential risks developing

risk management strategies and

monitoring performance to ensure that

risks are being effectively managed this

includes analyzing internal controls

evaluating business processes and

identifying opportunities to improve

management practices to visit some

risk management

evaluating business processes

Optimum business processes

[Music]

means to improve processes on the next

discussion

agile

Six Sigma yeah

businesses

so that it can minimize those and

increase bracket so um

sustainability reporting that is

a sustainability reports

sustainability reporting but having

handled this management accounting now

in Indiana

sustainability reporting so so

sustainability reporting management

accounting can help organizations

integrate sustainability consideration

into their decision-making processes by

developing environmental and social

metrics and Reporting Frameworks this

includes analyzing the environmental and

social impacts of organizational

activities identifying opportunities to

reduce negative impacts and Reporting on

sustainability performance

I

um

environmental and social impacts

environment at the same time

sustainability reporting Union

corporations

digital transformation management

accounting can help organizations

leverage digital Technologies to improve

their operations and performance by

developing data analytics capabilities

implementing cloud-based solution and

ensuring data security

this includes analyzing the potential

benefits and risk on digital

Technologies identifying opportunities

to improve business processes and

developing strategies to manage data

effectively so when it comes to

accounting as a more on data

preservation time because of the

historical costs no

Marvel

at the

at the speed and accuracy of

um digital technologies that are at the

same time women being

a certain conservative attitude towards

a future

um occurrences

and digital transformation new

conservative attitude

hard copies of

um evidences or Source documents

the role of management accounting has

the potential to be expanded Beyond

traditional financial reporting and cost

management to become a more strategic

and value-added while you're adding

function by leveraging its expertise in

financial analysis data analytics and

risk management management accounting

can help organizations achieve their

objectives and enhance their

competitiveness in today's rapidly

changing business environment

management techniques contemporary

management techniques another at present

among a technique

contemporary management techniques are

modern approaches used by managers to

effectively manage their organizations

and the current business environment

some of these techniques include agile

management this is a flexible and in

iterative approach to project management

that emphasize collaboration continuous

Improvement and rapid response to Cheers

lean management this technique focuses

on reducing waste and increasing

efficiency in all areas of the

organization from production to customer

service

Six Sigma this is a data-driven approach

to process Improvement that focuses on

reducing defects and improving quality

so the 16th month

s

[Music]

very intensive

driver research

knowledge because we have to collect

data when it comes to improving

processes Six Sigma always requires they

come

downtown management

counter quality management or tqm is a

comprehensive approach to Quality that

involves all employees in the

organization and focuses on continuous

Improvement Performance Management this

is technique in this technique involves

setting goals and objectives for

employees and tracking their

performances against these metrics to

ensure that they are meeting

expectations and contributing to the

organization's success examples

accomplishment report so many Target

every semester and then they are

accomplished

performance so

digital transformation this refers to

the use of technology to transform

business processes and improve

organizational efficiency

artificial intelligence transformation

Knowledge Management this technique

involves capturing and sharing knowledge

and expertise within the organization to

improve decision making and problem

solving so

that is Knowledge Management

the changing world of management

accountant

was a management appointment the world

of management accounting is constantly

changing due to advancement in

technology globalization and evolving

business models here are some of the

examples of how the role the management

accounting is changing

changes brought about my technology

changes brought about by globalization

because of the internet

limited Filipinos everything about

territoriality has become more and

academic learning territoriality

principles

because of the sovereignty of the state

for all other things these are

globalized now

or an evolving business models

business models

from from transaction from Source

document to the

um to the financial statements

about financial modeling

transactions documents financial

statement to conform in the current

trends and practices and then there will

be investment on that financial

statement even without Source documents

uh

you know

more on Research

Community

financial statement

historical course

foreign

having served the government for more

than 30 years and having uh getting

acquainted with different people

on different status in life

and

then my learning class and

as a mature citizen of this country and

as a mature learner are accounting not

um

so technology there are increasing use

of automation big data analytics and

artificial intelligence is transforming

the way management accountants work they

are now able to analyze large volumes of

data quickly and accurately and more

informed decisions I'm using Ai and then

you know

is tendency structure very young

knowledge history

[Music]

okay globalization

the growth of uh International markets

have led to increased competition which

has created new challenges for

management accountants they must Now

understand different Accounting

Standards tax regulation and cultural

norms in order to operate effectively in

different countries

foreign

[Music]

foreign

the rise of new business models such as

the sharing economy and

subscription-based services has created

new challenges for management

accountants they must now be able to

track revenue and expenses in

non-traditional ways and adjust

Financial models accommodate new revenue

streams

the Strategic role management

accountants are no longer seen as simply

number of branches as a strategic

partner as a strategic Partners who

provide valuable insights to Senior

Management they are increasingly

involved in decision-making processes

and are expected to be able to

communicate financial information to

non-financial stakeholders

ethics and transparency with increasing

scrutiny from stakeholders and the

public management abundance are expected

to operate with the highest ethical

standards and ensure transparency in

financial reporting this includes

complying with regulatory requirements

and disclosing all relevant financial

information to stakeholders

foreign

to the next topic which is the current

purpose of management accounting

God bless everyone wait for the next

video