Role of Strategic Management Accounting Essay Example | Topics and Well Written Essays - 750 words

Role of Strategic Management Accounting - Essay ExampleStrategic anxiety accounting (SMA) has been introduced as a field of study in the accounting profession. The core purpose of introducing SMA is to declare on the usual management accounting by giving it a wider scope. The introduction of SMA was due to legion(predicate) requests on the improvement of MA. SMA centers on the internal financial information of the business as well as the external facet of the business operation. Compared to management accounting, SMA focuses more(prenominal) on comparing the business with the enemys, which answers the managers to be more vigilant based on how the competitor is conducting business (Shah, Muhammad & Malik 2011, p.1)The management learns business techniques from competitors and makes appropriate decision. The ability of SMA to allow in non-financial features of business in decision making is a major breakthrough in accounting. In a nutshell SMA plays vital roles in business manag ement such as collecting information that is related to the competing business. It is similarly utilise in helping the accountant and the management make a strategic decision that relates to the business. Also, SMA help in cost cutting measures based on strategic decisions by the management, and finally, Strategic business management, is capable in helping the business gain competitive advantage over the rival businesses. In acting the above roles, authors of strategic business management have been encouraging accountants to use analytical tools developed and used in the area of strategy. and marketing which are now essential in the field of SMA. The first tools of SMA as presented by scholars is the Competitor cost assessment, this involves making a keen analysis of the cost that the business competitor incurs. Such cost, which includes labor, raw materials and production cost, is accessible mainly with the increasing development of accessing information. Analyzing and understa nding this cost go out help the management to cut and manage the business cost. The second tool is attributing be which is costing remains that emphasizes on the products attributes. Such attributes will include the features of the product, purchase agreements and after- sale services. The information analyzed in costing system should have relevance with either the current or future employer (Shah, Muhammad & Malik 2011, and p.3).Another tool is SMA is the exertion of the balanced scorecard (BSC) which was proposed by Norton and Kaplan in 1992. In BSC financial and non-financial measures are amalgamated for strategic feat management purposes. The intention is to create a balance by linking vision and strategy of the business with multi-dimensional points of spatial relation of the customer. Competitor Appraisal Based on Financial Assessment is another crucial tool of SMA. This cast is effective as it allows equation and yard sticking. The process is also fairly cheap in comp arison to others. Strategic costing is also an