Management Accountants in Organizations
Management accountants are responsible for the accounting system within the organization.
As discussed in earlier post Opens in new window, the accounting system should be designed to assist in making planning decisions, control decisions, and in financial and tax reporting.
The management accounting function in small organizations is normally performed by a bookkeeper, who records transactions. An outside accountant often assists in the creation of financial statements and tax returns.
The emphasis on financial reporting means that managers may not have relevant information for planning purposes. Control is unlikely to be as important because the manager making the decisions is likely to be the owner.
In larger organizations, someone is normally assigned the responsibilities of a management accountant. That person usually is called the controller.
Role of the Controller
The controller assists managers in making decisions and reports to the president or CEO.
The controller is delegated responsibility for the communication and implementation of an organization’s accounting policies and procedures, and acts as both consultants to and evaluator of other parts of the organization.
The controller may also have assistant controllers who carry out specialized accounting and reporting duties.
The functions of the controller are distinct from those of the treasurer, who deals primarily with financial concerns such as investments, financing, banking and credit policy.
Controllers are more than just compilers of information; they are members of senior management and strategic planning teams and act as interpreters and advisors.
Controllers are expected to provide analytical insights and to add value to the management process.
In large corporations, the controller often reports to the vice president of finance rather than to the CEO.
Larger corporations also have internal audit department. The internal audit department is concerned with the organization’s control system.
Its role is to ensure that financial and operating assets are used efficiently and appropriately to achieve organizational objectives.
The internal auditor monitors the various divisions and departments of the corporation to determine if prescribed operational procedures are being followed.
To maintain its independence and profile, the internal audit department often reports directly to the vice president of finance or to the CEO and the board of directors.