Management Accounting as a term lost its relevance.

MANAGEMENT ACCOUNTING AS A CONCEPT EVOLVED FROM THE UNDERLYING PRINCIPLE THAT MERE RECORDING OF TRANSACTION AND PRODUCING PROFIT AND LOSS ACCOUNT AND BALANCE SHEET OVER A PERIOD WOULD NOT HELP BUSINESS PERFORM CONTINUALLY.

Management thus needs accounting that supports decision making at operational and strategic level.Business runs on resources and processes to create value.Resources involve incurring of cost and processes create value for sustenance and growth.

The term management accounting is out of parlance of IFAC(the umbrella organisation)way back i 2002 and they had travelled forward by dispensing this term and literature associated(FMAC and IMAS).The soul of management accounting is not traced but derived from measurement of resources and associated cost to derive beneficial value to the organisation.When we look at this parlance it points clearly that the soul rest in cost accounting with its two analytical dimension namely financial management and cost management.

There is aversion to view management accounting as an assurance function and also to view cost accounting as historical.In fact there was a great debate in India that management accounting is not a function at all.

At the best management accounting is a futuristic dimension of cost accounting, but it would restrict management accounting scope as a current context accounting.Future cannot begin without travelling in the past and uncertainities of the future more often gets revealed in the past data.

Why should one be averse of management accounting as an assurance reporting.Decisions through strategies heavily depend on data that is delivering the necessary confidence level be it for government as a stakeholder or others.

With IFAC moving away from FMAC and IMAS- Governance has replaced the concept of management accounting, specially the triple bottomline-ESG.Governance talks about three thing -accountability, transperancy and ethics.Management accounting if it is not a function has lost its relevance in the field of accounting since it has to draw inspiration every moment from the cost accounting.Management Accounting is also not just elite accounting since one cannot , in reality build castles in air specially when one runs business.

If the deliverables of management accounting is decision support parameters to support futuristic effort of management then it fulfills the criteria of Accountability and thus one part of governance.

Hence management accounting is a misnomer and it should have actually been "management accountability" when it started evolving from cost accounting(through its to dimensions namely financial management and cost management).

Since management accounting is yet to stabilise its term as a function and gradually got replaced by governance(accounting for sustainability) management accounting should be honorably buried as a term and cost accounting should care take its new avatar A4S.Accounting for governance!!!