The Role of Management Accountant to Cost Control and Profit Performance in an Organization
CHAPTER ONE
OBJECTIVE OF THE STUDY
The main objective of this study is the role of management accountant to cost control and profit performance in an organization. But for the successful completion of the study; the researcher intends to achieve the following sub-objectives;
- To determine the relevance of management accountant in organization cost control
- To ascertain the role of management accountant in cost control effectiveness
- To ascertain the impact of efficient cost management and control in the profitability of the firm
- To ascertain the relationship between cost control and profitability of the organization.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
CONCEPT OF PROFITABILITY:
Profitability means ability to make profit from all the business activities of an organization, company, firm, or an enterprise. It shows how efficiently the management can make profit by using all the resources available in the market. According to Harward & Upton, “profitability is the ‘the ability of a given investment to earn a return from its use.” However, the term ‘Profitability’ is not synonymous to the term ‘Efficiency’. Profitability is an index of efficiency; and is regarded as a measure of efficiency and management guide to greater efficiency. Though, profitability is an important yardstick for measuring the efficiency, the extent of profitability cannot be taken as a final proof of efficiency. Sometimes satisfactory profits can mark inefficiency and conversely, a proper degree of efficiency can be accompanied by an absence of profit. The net profit figure simply reveals a satisfactory balance between the values receive and value given. The change in operational efficiency is merely one of the factors on which profitability of an enterprise largely depends. Moreover, there are many other factors besides efficiency, which affect the profitability.
THE MANAGEMENT ACCOUNTANTS’ ROLE IN ORGANIZATION
There have been changes over the last 30 years in the way the management accountant’s role is characterized. From bean counters to business partners (Baldvinsdottir, et.al, 2009 and Malmie, 2001). The main focus of management accountants has always been improving organizations’ performance and profitability. Traditionally, management accountant has been invariably relegated to a role of organizational cost keeping and budgeting and on delights of process costing and budgetary variance analysis. (Misrha, 2011). According to Devie, Tarigan and Kunto (2008) management accountant is intended satisfy top level management need and to motivate in achieving organization’s objectives. Kaplan and Atkinson (1998) also stated that management accountants are no longer mere scorekeepers of past performance but become value adding members of management teams. The management accountant should be highly skilled and important members of management team. (Cooper, 1996). Management accountants today is metamorphosing from bean counters into financial and strategic managers Devie, Tarigan and Kunto (2008) explained that there are four types of management accountant role in an organization, as an administrator, as a doer, as a concept or and as an actor. A management accountant play role as an administrator if he or she does the administrative or bookkeeping tasks such as recording transaction or being a cashier. Management accountant would be a doer if he or she run accounting system in day-to-day operational activities. The next role is as a conceptor. A management accountant can be classify as a conceptor if he or she has higher understanding level of accounting concept but the concept has not become important in the organization. Finally, Devi, Tarigan and Kunto (2008) mentioned that a management accountant can be an actor if he or she concern in strategy level or provide information to top-level manager in doing strategic decision planning and decision making.
CHAPTER THREE
RESEARCH METHODOLOGY
- Research design
The researcher used descriptive research survey design in building up this project work the choice of this research design was considered appropriate because of its advantages of identifying attributes of a large population from a group of individuals. The design was suitable for the study as the study sought to the role of management accountant to cost control and profit performance in an organization.
- Sources of data collection
Data were collected from two main sources namely:
Primary source and Secondary source
Primary source:
These are materials of statistical investigation which were collected by the research for a particular purpose. They can be obtained through a survey, observation questionnaire or as experiment; the researcher has adopted the questionnaire method for this study.
Secondary source:
These are data from textbook Journal handset etc. they arise as byproducts of the same other purposes. Example administration, various other unpublished works and write ups were also used.
CHAPTER FOUR
PRESENTATION ANALYSIS INTERPRETATION OF DATA
Introduction
Efforts will be made at this stage to present, analyze and interpret the data collected during the field survey. This presentation will be based on the responses from the completed questionnaires. The result of this exercise will be summarized in tabular forms for easy references and analysis. It will also show answers to questions relating to the research questions for this research study. The researcher employed simple percentage in the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain the role of management accountant to cost control and profit performance in an organization
In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of management accountant to cost control and profit performance in an organization.
Summary
This study was on the role of management accountant to cost control and profit performance in an organization. Four objectives were raised which included; to determine the relevance of management accountant in an organizational internal cost performance efficiency, to ascertain whether the resent increase in cost of products manufactured in Nigeria is caused by other factors rather than management inefficiency, to ascertain if organizational strategic managers should rely on management accountant information for decision making, to ascertain the relationship between management accountant to cost control and profit performance in an organization. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of Nigeria breweries was selected randomly. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made up shift managers, auditors, technical brewers and production engineers were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies.
Conclusion
The study provided evidence that cost control structure and lines of authority has effect on cost control system and information technology system (control application usage) efficiency. It has provided findings in support of the proposition that integrated cost control system would be moderated by cost control structure and lines of authority efficiency to enhance nonfinancial performance. The modest influence of cost control structure and lines of authority on integrated cost control system observed might be due to the number of firms with undefined internal cost control structure and lines of authority as evidenced from the descriptive analysis.
Recommendations
This study recommends corporate organizations to give a consideration to the functionality of cost accounting system and these organizational factors, since these reflected significantly on the system’s efficiency and non-financial performance. Any generalization of this study should however be done with caution bearing in mind that a combined industrial data has been used. Future research direction could involve specific industry to confirm the findings from this study.
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