Accounting as a Technology of Control

Introduction

Accountancy or accounting functions in today’s world is expected to be competitive because of the impact of the globalization or international markets. Accounting functions are often perceived as the tools for the business leaders to create the sound decisions. Thereto, many experts as well as business analysts congregate the idea that appropriate functions of accounting managers can contribute to the overall efficiency of the company. With due respect to the accounting professions, many successful companies hire more than two accountants which many analysts stated as a strong signal of the organizations effectiveness.

The Representation and Control

The level of understanding of one person in the accounting studies signifies the participation of the control. In this ides, the accounting as a technology of control has been proved in different organization and being well recognized in the accounting literature (Yayla, 2007). Every accounting manager is given a chance to perform his function and the same time with the level of control. Accounting, as a form of transactions, also conceptualized the importance of the relationship or interaction between the control and the trust building. The accounting control being given by the managers is under the organizational structure therewith having the potential in safeguarding the organizations long-term interests. As a technology of control, the accounting enables the leaders or the managers to commit themselves in giving decisions in relation to the calculations and presentation of accounts of the reports. Through the deep understanding of the business corporate, the control can be given which will result in positive behavioral expectations.

Control and Functions in Financial Accounting

The financial accounting has the primary purpose to make the business profitable and make strategies for the organizations to have additional value. Same as the management accounting and other respective accounting associates, the financial management can have a potential of being successful if its component involves the essence of planning. Since financial management is using the financial resources, there should be a strong alignment among the resources which popularly known as budget. Budgets are forecasted of how the company can achieve their aim for profits and other aspects. In the concept of budget, the financial manager have the entire control particularly on how to spend, how many units to produce, or how many customers can be accommodated. The performance of the manager depends on how well he used the allocated resources in finishing the business operation without any additional costs and in a given time (Tanner, 2007).

Control and Functions in Management Accounting

In academic contexts, management accounting involves the process of identifying, measuring, reporting, and analyzing the information with regards to the events happened within the organization. There are four processes are internal information that the business leaders needed to help them guide in the on-going operations and investment decisions. The first function of the management accounting is the operational control in which there are provided feedbacks from the efficiency and quality of the tasks performed. Second is the product and customer costing, this is where the manager place the control of measuring the costs of resource used to produce a certain product or service to be delivered in the market. Management control is the third function that describes on the provided information about the performance of the managers and other operating units in performing their duty. Lastly, the strategic control functions in providing the information about the enterprise’s financial and long-run competitive performance, different market conditions, the consumers taste and preferences, and various technological innovations (Heeren, 2001).

Further Discussion

In the relation of the technology, accounting professionals welcomes the idea of the software that can help them in their everyday tasks. Aside from the computers, the managerial accountants can use different templates or database where they can easily access on the recorded data. Meanwhile, the costing system can be used by the financial manager to help them guide in thorough decision making (Brierley, 2004).

Conclusion

Accounting profession is not really a hard occupation. It only gets tougher when there are misaligned functions and inappropriate controls. Accounting, in every aspect, is also affected by the different external constraints or economic changes that might trigger to the inaccuracy of the reports. Furthermore, the managers are also valued on their companies because of their knowledge and experiences in handling the different financial situations and controls. Therefore, many companies look for the help of the accounting professionals and sometimes seek advises with the intention of gaining advantage and efficiency of the business.

References:

Brierley, J., 2004. An Examination of the Costing Process in a Technology Center: Lessons for Management. International Journal of Management, Vol. 21, No. 1.

Heeren, A., 2001. Management Accounting for Sustainable Development. [Online] Available at: http://www.p2pays.org/ref/26/25585.pdf. [Accessed 09 Feb 2010].

Tanner, D., 2007. Comparison of Management Accounting and Financial Accounting, Introduction to Managerial Accounting. [Online] Available at: http://www.unf.edu/~dtanner/dtch/ch1.pdf. [Accessed 09 Feb 2010].

Yayla, H., 2007. Accounting and Language. [Online] Available at: http://www.cf.ac.uk/carbs/conferences/abfh07/yayla.pdf. [Accessed 09 Feb 2010].